As far as personal finance goes, I am a Mustachian through and through. Make decent money, live frugally, invest wisely, and you can be fairly sure you’ll end up financially secure—even if not necessarily retired at 35, as many dream of. The entire logic behind building wealth is simply a matter of the income-to-spending ratio. The math is easy enough: if you spend every euro you make, you will inevitably never accumulate any wealth. However, if you only spend a small portion of your income and invest the rest, eventually the returns on these investments will grow enough to sustain your frugal lifestyle indefinitely.

Of course, this is something not many can do. If the average Hans, with his average income and average spending, wants to hop on the FIRE train, he will have to manipulate both sides of the equation drastically by increasing his income while reducing his spending. The higher the income-to-spending ratio, the shorter the time it will take to accumulate enough money. To retire early, he may need to achieve, for example, an 80/20 income-to-spending ratio. This means he would have to increase his income by a factor of 2.5 while cutting his spending in half—or quintuple his income without increasing his spending. Then, he would have to sustain this strategy long enough to fill the piggy bank sufficiently. And even then, success is not guaranteed; luck is still involved. If he loses his invested money for whatever reason, he will have to start over again.

I am not convinced many people can actually do this, simply because maintaining the necessary income-to-spending ratio for early retirement is difficult. To make good money from a job, Hans will most likely have to live in a big city. Big cities come with high living costs. One side of the equation is not completely independent of the other, and, in this sense, the game is rigged against him. As a result, most who try probably end up with a lower income-to-spending ratio—one that ensures financial security but never grants them full financial freedom.

Unless they jump onto The Millionaire Fastlane, as M.J. DeMarco argues in his book of the same title. In essence, DeMarco’s approach does not contradict Mustachianism, even if he presents it as a unique strategy distinct from those of many other financial gurus. Instead, his approach builds upon Mustachian principles, shifting the focus to the income side of the equation. DeMarco’s core argument is that Hans cannot cut his spending enough to achieve early retirement. He must first increase his income significantly—unless he wants to survive on breadcrumbs for twenty years. And how does he do that? By disconnecting his income from his time.

If Hans works any sort of job, he has limited control over his income. In a very good circumstances, he could negotiate a 50% salary increase, learn a new skill or find a better-paying job, but his options are generally limited to small incremental gains. There is almost no way to achieve exponential salary growth. His income is still tied to his time, of which he has a very limited amount. Whether he makes ten euros per hour or a hundred makes a difference, but it’s unlikely he’ll ever make a thousand. Such jobs exist, but competition is fierce, and even if he’s perfectly qualified, his chances of securing one are low. It’s essentially a popularity contest in which he has very little control over the outcome.

DeMarco argues that employment isn’t the only problem—most types of businesses would also keep Hans stuck in the “slow lane.” Whenever there is a direct link between his income and the time spent performing the job, his leverage is low, and so is his earning potential. However, if he disconnects time from income, he unlocks virtually unlimited potential, creating a straightforward path toward a high income-to-spending ratio.1

There is undeniable logic in this, and DeMarco is probably right that a typical job won’t pay for early retirement for most people. Yet, there’s something very American and consumer-focused about his reasoning. For him, having a high budget to spend on material possessions is a given, and this high spending justifies the need for ever-increasing income. DeMarco even suggests starting with the spending side—imagining the desired lifestyle, calculating the money required to sustain it, and then finding a way to fund it. While this approach is logically sound, it also feels somewhat unsettling, as if there’s something inherently wrong with frugality—as if the joy of driving a “crappy Hyundai” is objectively inferior to driving a shiny Lamborghini. Yes, a Lamborghini is objectively a better car than a Hyundai2, but how we enjoy the ride is ultimately a matter of perception.

Rather than imagining an ideal lifestyle and reverse-engineering a way to finance it, I find it much more logical to focus on achieving high day-to-day happiness. Maybe Hans’ job won’t pay for a Lambo and a condo in the mountains, but if he enjoys it and it provides him enough money to ensure financial security (if not total freedom) while giving him enough time for his family and hobbies, it might be better than spending years chasing business ventures, working 24/7, and straining relationships—all in pursuit of a golden future where he would be the one who “made it.” On the other hand, if if he’s twenty and ready to take risks, DeMarco provides a solid starting guide and a motivational pep talk as good as any.

  1. M.J. DeMarco - The Millionaire Fastlane: Crack the Code to Wealth and Live Rich for a Lifetime!
  2. Mr. Money Mustache

Footnotes

  1. DeMarco delves into great depth about which types of businesses qualify for high-income potential. My takeaway is there are two key factors: control and scalability. Control—because if you don’t own the brand, you don’t own your customer relationships and can be cut off at any time. Scalability—because if you can only serve as many customers as your time allows, your business is merely a slightly better job. This section of the book is quite insightful and could serve as a useful Business 101 for many aspiring entrepreneurs. ↩

  2. Although this could be debated, I’d personally rather drive the new Hyundai IONIQ 5 N than any impractical supercar. ↩