I bet you must have heard that “Money does not grow on trees” at any point in your life. But what if I tell you, that money does and can grow on trees, figuratively speaking?
And that’s the main spirit of one of my favorite book – The Millionaire Fastlane by MJ DeMarco. And before we get into the summary of Millionaire Fastlane I would like to say that the book is really nicely written, not overly complicated but provides a good base for becoming a Millionaire fast by building Money trees.
In this Millionaire Fastlane summary, I would like to focus solely on the idea of Money trees. What are they and how you can build one. Let’s dive in!
What is a money tree?
Money trees are business systems that survive on their own. They require periodic support and nurturing but survive on their own, creating a surrogate for your time-for-money trade.The Millionaire Fastlane
The main premise of this is that how much wealth this “money tree” business generates is not directly tied to the time we put into it. In this book, you can find five of these businesses, and we will summarize each one.
You simply plant a seedling of this tree — this of course requires some of your time. But later on, it can and will, if you do it right, grow into a beautiful “money tree” providing you with passive income, ideally forever.
When I was doing my research for the purpose of this summary I was looking for a quote that would capture the whole idea of the Money Tree. And I think I found the one.
Money doesn’t grow on trees, but grows on intelligent minds.Matshona Dhliwayo
And that is also mentioned in the book. You will need to come up with an idea, with something that will grow you the money. And the best part is that everybody has the ability to do that.
Now let’s look into each one of the five different Money Tree businesses. For the purpose of this article, I won’t go into too much detail with each category, but I’d like you to read the book if you like these ideas.
Individual categories are graded from A to C. The grade doesn’t reflect businesses’ income potential, but a higher grade means a higher potential for passivity.
1. Rental Systems
The first one is a rental systems with grade A. Rental system consists in renting something you already own. Do you own a bunch of real estate? Great, you can rent them. I admit that if you have a few real estates you are probably already a rich person, but there is always a space for more money trees!
But a rental system can come from a variety of other sources if you do not wanna get involved in real estate. Especially licensing. You can do music, take pictures, create any kind of digital art, and collect money from others using them.
2. Computer/Software systems
This comes with the grade A-. You make software once and then you charge people. Your software can be paid, you can charge monthly subscription fees, or you can be paid from ads inside your software (mainly on phone apps, but you can still make a second YouTube, Facebook…).
Once you write your code it has nearly unlimited growth potential.
3. Content Systems
Grade B+. The idea is that you create content. This is something I am doing at this moment — creating content, a blog post. You can write a book, make a YouTube video, online course, or an article for your blog.
As DeMarco said:
Content also survives time. This book might have taken me years to write, but it also survives years. If someone buys this book five years from now, I will earn a small profit on a time investment I made years earlier.
Again, as with software systems, it takes some effort to create content once but then you can still earn money five, ten years from now. This won’t you make rich fast but has a great potential of scaling.
This is my favorite money tree. You don’t need any special knowledge and skills to create content. Just write a blog post and let your money grow on the tree of content.
4. Distribution Systems
Grade B. You can become a middleman, who connects people who want something with people who are supplying that thing. Or become a part of it. Amazon is a distribution system, that connects buyers with sellers. You can create a product and sell it to wholesale distributors, who then sell it to retailers like Target. In this case, you are not the middleman, like amazon, but you are on the side of the SUPPLIER.
This is greatly interbreeding with other systems. You can make an app, but chances are you won’t sell a single copy of this app without the App Store or Steam, etc.
5. Human Resource Systems
Human Resource systems come as the last one of the 5 money trees mentioned in the book, and the last money tree in this Millionaire Fastlane summary. Human resource Systems come with a grade of C. This money tree is easiest to explain but hardest to run.
When you hire employees for your business part of it will be the human resource system. To make a million-dollar business, you can’t avoid this.
Your employees are the money tree. They work so you can make money basically, your money grows on trees then. I know it sounds harsh but it is what it is.
In this Millionaire Fastlane summary, we focused solely on the idea of money trees.
Now purely from my opinion, no one is claiming that creating such a “money tree” will be easy. The whole book is focused on getting rich fast, not easily. If you want something like that you have to put the hours and hard work into it. Respectively, from my point of view, it is possible to run rental systems despite the fact that you have never dealt with a guide on how to get rich quickly before. After all, everyone even if they don’t care about finance usually if they invest, and build money tree, they invest in real estate which they then rent out. My grandfather also has several apartments that he rents out. And there were no internet options (licensing, software, or even this book) when he was young. But he got it to have some extra money in retirement, and because real estate holds its value.
But after all, it is important to do the first step and do the jump. You can start small and go big. For example with micro-job sites like Picoworkers. You can check different ways to implement money tree to your everyday life with 20 ways to make money while sleeping.