Table of Contents<\/h2>- What Wealth Isn\u2019t<\/a>
- Uncontrollable Factor #1: The Value of Your Education<\/a><\/li>
- Uncontrollable Factor #2: The Time You Spend Working<\/a><\/li>
- Uncontrollable Factor #3: The Economy<\/a><\/li>
- Uncontrollable Factor #4: The Markets<\/a><\/li>
- Uncontrollable Factor #5: Your Health and Well-Being<\/a><\/li>
- Financial Outcome: You Might Get Rich but You Won\u2019t Be Able to Enjoy It<\/a><\/li><\/ul><\/li>
- The Real Definition of Wealth: Value<\/a>
- Value Is Subjective<\/a><\/li>
- How to Create Value and Wealth<\/a><\/li><\/ul><\/li>
- Explore More<\/a><\/li><\/ul><\/div>\n\n\n\n
What Wealth Isn\u2019t<\/strong><\/h2>\n\n\n\nIn The Millionaire Fastlane<\/em><\/a>, MJ DeMarco defines false wealth as: job + market investments = restricted income and a mediocre retirement<\/em>. According to him, hopeful accumulators follow popular methods touted by financial advisors as a guaranteed path to a comfortable retirement: Get an expensive education, work hard for 40 to 50 years, sacrifice pleasures, budget every cent, buy a house, and funnel all surplus money toward pensions, safe investments, and savings accounts.<\/p>\n\n\n\nDeMarco argues that this formula for wealth severely limits your chances of creating real wealth because it\u2019s entirely dependent on a number of factors that you can\u2019t control: the value of your education, the time you spend working, the economy, interest rates, and your health and well-being. Let\u2019s explore these factors in detail:<\/p>\n\n\n\n
Uncontrollable Factor #1: The Value of Your Education<\/strong><\/h3>\n\n\n\nDeMarco claims that investing time and money in an expensive education limits your freedom in two distinct ways: First, it forces you to work so that you can pay off your debts\u2014while your education may increase your salary by 20%, the debts you incur will take more than 20 years to pay off. Second, it shackles you to a specific type of work that \u201cjustifies\u201d your education. This limits your financial freedom, as the value of your education depends on the opportunities in your field\u2014if there are no opportunities, your education has no value. <\/p>\n\n\n\n
Uncontrollable Factor #2: The Time You Spend Working<\/strong><\/h3>\n\n\n\nDeMarco explains that relying on an hourly wage or salary from your job or business puts a cap on how much you can earn because time is limited: For hourly wages, you can\u2019t work more than 24 hours a day to increase your income. For annual salaries, you can\u2019t work above your life expectancy to accumulate more money.<\/p>\n\n\n\n
Uncontrollable Factor #3: The Economy<\/strong><\/h3>\n\n\n\nDeMarco notes that the economy is volatile\u2014an unexpected downturn can significantly impact your ability to receive a consistent income. If you lose your job or business, you won\u2019t be able to make regular contributions to your pension and investment accounts, clear your debts, or pay your mortgage. <\/p>\n\n\n\n
Uncontrollable Factor #4: The Markets<\/strong><\/h3>\n\n\n\nDeMarco argues that the compound interest you earn on investments relies on three factors to effectively increase your net worth: time, regular contributions to your account, and a high rate of return<\/strong>. He explains that in theory, investments create wealth by providing a predictable and healthy rate of return over the course of decades. <\/p>\n\n\n\nIn reality, however, the rates are too low to make a significant impact on the small, capped sums of money the government allows you to contribute to your investment accounts. You also can\u2019t guarantee that financial managers won\u2019t make poor decisions that lose you money or that the rate of inflation won\u2019t reduce the value of your hard-earned money by the time you retire. <\/p>\n\n\n\n
Further, DeMarco argues that you can\u2019t rely on your home equity to increase your net worth because real estate values don\u2019t always rise. <\/p>\n\n\n\n
Uncontrollable Factor #5: Your Health and Well-Being<\/strong><\/h3>\n\n\n\nDeMarco warns that working long hours for the hope of a prosperous future negatively impacts your health, relationships, and feelings of freedom. Even if you\u2019re happy to make these sacrifices for now, you can\u2019t guarantee that they\u2019ll pay off. You may not be healthy enough to work for your income until retirement, or, by the time you retire, you may feel<\/em> too old or have too many health problems to enjoy your money.<\/p>\n\n\n\nFinancial Outcome: You Might Get Rich but You Won\u2019t Be Able to Enjoy It<\/strong><\/h3>\n\n\n\nDeMarco argues that committing to lifetime employment, delaying gratification, and waiting decades for compound interest to accumulate won\u2019t guarantee a wealthy retirement<\/strong>\u2014the plan relies on numerous factors that are out of your control. Further, he asserts that sacrificing your time, freedom, and pleasures isn\u2019t worth the effort since you\u2019ll be too old to enjoy your wealth, and inflation will reduce the value of any money you do manage to accumulate.<\/p>\n\n\n\nThe Real Definition of Wealth: Value<\/strong><\/h2>\n\n\n\n![\"A](\"https:\/\/www.shortform.com\/blog\/wp-content\/uploads\/sites\/2\/2025\/12\/real-wealth-infographic-1024x684.jpg\")
<\/figure>\n<\/div>\n\n\nMost people would say someone with a lot of expensive material possessions is wealthy. But most people living high-consumption lifestyles have little accumulated wealth; they spend all they earn<\/strong>. Instead of acquiring material possessions, especially status symbols, the truly wealthy focus on building financial assets that appreciate or increase in value.<\/p>\n\n\n\nNet worth\u2014the current value of your assets minus liabilities\u2014is one way of defining what wealth is.<\/p>\n\n\n\n
In The Millionaire Next Door<\/em><\/a>, Thomas J. Stanley and William D. Danko define wealth in two ways: 1) having a net worth of at least $1 million, and 2) having a high net worth for someone of your age and income. <\/p>\n\n\n\n(Shortform note: at the time this book was published, 3.5% of U.S. households had a net worth of at least $1 million. In 2018, the figure was 3%<\/a>, or 11.8 million U.S. households.) About 95% of millionaires have a net worth of $1 million to $10 million. They are the focus of this book because their level of wealth is attainable by many Americans.<\/p>\n\n\n\nAccording to Gunderson, the zero-sum framework is rooted in <\/strong>an incorrect theory of what constitutes value\u2014namely, that objects <\/em>alone have inherent value. According to this view, objects have some fixed, innate worth that exists independently of human perception. Thus, the world\u2019s total wealth is simply the sum of all these objective values. This line of thinking leads you to believe that the only way to increase <\/strong>your<\/em><\/strong> wealth is by acquiring more of these inherently valuable objects\u2014assets like cash, gold, real estate, and collectibles\u2014from the finite supply that exists. <\/strong>In the sections below, we\u2019ll explore why Gunderson believes this idea is wrong.<\/p>\n\n\n\n
- Uncontrollable Factor #1: The Value of Your Education<\/a><\/li>
- Uncontrollable Factor #2: The Time You Spend Working<\/a><\/li>
- Uncontrollable Factor #3: The Economy<\/a><\/li>
- Uncontrollable Factor #4: The Markets<\/a><\/li>
- Uncontrollable Factor #5: Your Health and Well-Being<\/a><\/li>
- Financial Outcome: You Might Get Rich but You Won\u2019t Be Able to Enjoy It<\/a><\/li><\/ul><\/li>
- The Real Definition of Wealth: Value<\/a>
- Value Is Subjective<\/a><\/li>
- How to Create Value and Wealth<\/a><\/li><\/ul><\/li>
- Explore More<\/a><\/li><\/ul><\/div>\n\n\n\n
What Wealth Isn\u2019t<\/strong><\/h2>\n\n\n\n
In The Millionaire Fastlane<\/em><\/a>, MJ DeMarco defines false wealth as: job + market investments = restricted income and a mediocre retirement<\/em>. According to him, hopeful accumulators follow popular methods touted by financial advisors as a guaranteed path to a comfortable retirement: Get an expensive education, work hard for 40 to 50 years, sacrifice pleasures, budget every cent, buy a house, and funnel all surplus money toward pensions, safe investments, and savings accounts.<\/p>\n\n\n\n
DeMarco argues that this formula for wealth severely limits your chances of creating real wealth because it\u2019s entirely dependent on a number of factors that you can\u2019t control: the value of your education, the time you spend working, the economy, interest rates, and your health and well-being. Let\u2019s explore these factors in detail:<\/p>\n\n\n\n
Uncontrollable Factor #1: The Value of Your Education<\/strong><\/h3>\n\n\n\n
DeMarco claims that investing time and money in an expensive education limits your freedom in two distinct ways: First, it forces you to work so that you can pay off your debts\u2014while your education may increase your salary by 20%, the debts you incur will take more than 20 years to pay off. Second, it shackles you to a specific type of work that \u201cjustifies\u201d your education. This limits your financial freedom, as the value of your education depends on the opportunities in your field\u2014if there are no opportunities, your education has no value. <\/p>\n\n\n\n
Uncontrollable Factor #2: The Time You Spend Working<\/strong><\/h3>\n\n\n\n
DeMarco explains that relying on an hourly wage or salary from your job or business puts a cap on how much you can earn because time is limited: For hourly wages, you can\u2019t work more than 24 hours a day to increase your income. For annual salaries, you can\u2019t work above your life expectancy to accumulate more money.<\/p>\n\n\n\n
Uncontrollable Factor #3: The Economy<\/strong><\/h3>\n\n\n\n
DeMarco notes that the economy is volatile\u2014an unexpected downturn can significantly impact your ability to receive a consistent income. If you lose your job or business, you won\u2019t be able to make regular contributions to your pension and investment accounts, clear your debts, or pay your mortgage. <\/p>\n\n\n\n
Uncontrollable Factor #4: The Markets<\/strong><\/h3>\n\n\n\n
DeMarco argues that the compound interest you earn on investments relies on three factors to effectively increase your net worth: time, regular contributions to your account, and a high rate of return<\/strong>. He explains that in theory, investments create wealth by providing a predictable and healthy rate of return over the course of decades. <\/p>\n\n\n\n
In reality, however, the rates are too low to make a significant impact on the small, capped sums of money the government allows you to contribute to your investment accounts. You also can\u2019t guarantee that financial managers won\u2019t make poor decisions that lose you money or that the rate of inflation won\u2019t reduce the value of your hard-earned money by the time you retire. <\/p>\n\n\n\n
Further, DeMarco argues that you can\u2019t rely on your home equity to increase your net worth because real estate values don\u2019t always rise. <\/p>\n\n\n\n
Uncontrollable Factor #5: Your Health and Well-Being<\/strong><\/h3>\n\n\n\n
DeMarco warns that working long hours for the hope of a prosperous future negatively impacts your health, relationships, and feelings of freedom. Even if you\u2019re happy to make these sacrifices for now, you can\u2019t guarantee that they\u2019ll pay off. You may not be healthy enough to work for your income until retirement, or, by the time you retire, you may feel<\/em> too old or have too many health problems to enjoy your money.<\/p>\n\n\n\n
Financial Outcome: You Might Get Rich but You Won\u2019t Be Able to Enjoy It<\/strong><\/h3>\n\n\n\n
DeMarco argues that committing to lifetime employment, delaying gratification, and waiting decades for compound interest to accumulate won\u2019t guarantee a wealthy retirement<\/strong>\u2014the plan relies on numerous factors that are out of your control. Further, he asserts that sacrificing your time, freedom, and pleasures isn\u2019t worth the effort since you\u2019ll be too old to enjoy your wealth, and inflation will reduce the value of any money you do manage to accumulate.<\/p>\n\n\n\n
The Real Definition of Wealth: Value<\/strong><\/h2>\n\n\n
\n<\/figure>\n<\/div>\n\n\nMost people would say someone with a lot of expensive material possessions is wealthy. But most people living high-consumption lifestyles have little accumulated wealth; they spend all they earn<\/strong>. Instead of acquiring material possessions, especially status symbols, the truly wealthy focus on building financial assets that appreciate or increase in value.<\/p>\n\n\n\n
Net worth\u2014the current value of your assets minus liabilities\u2014is one way of defining what wealth is.<\/p>\n\n\n\n
In The Millionaire Next Door<\/em><\/a>, Thomas J. Stanley and William D. Danko define wealth in two ways: 1) having a net worth of at least $1 million, and 2) having a high net worth for someone of your age and income. <\/p>\n\n\n\n
(Shortform note: at the time this book was published, 3.5% of U.S. households had a net worth of at least $1 million. In 2018, the figure was 3%<\/a>, or 11.8 million U.S. households.) About 95% of millionaires have a net worth of $1 million to $10 million. They are the focus of this book because their level of wealth is attainable by many Americans.<\/p>\n\n\n\n
According to Gunderson, the zero-sum framework is rooted in <\/strong>an incorrect theory of what constitutes value\u2014namely, that objects <\/em>alone have inherent value. According to this view, objects have some fixed, innate worth that exists independently of human perception. Thus, the world\u2019s total wealth is simply the sum of all these objective values. This line of thinking leads you to believe that the only way to increase <\/strong>your<\/em><\/strong> wealth is by acquiring more of these inherently valuable objects\u2014assets like cash, gold, real estate, and collectibles\u2014from the finite supply that exists. <\/strong>In the sections below, we\u2019ll explore why Gunderson believes this idea is wrong.<\/p>\n\n\n\n
- How to Create Value and Wealth<\/a><\/li><\/ul><\/li>
- Uncontrollable Factor #2: The Time You Spend Working<\/a><\/li>