I first read The 4-Hour Workweek by Tim Ferriss sometime in my early 20’s. As much as I hate to admit it, this book - especially the first few chapters - has had a big influence on my life outlook of life, most notably, how I view the relationship between money and happiness.
This book is about defining a new game instead of giving into assumptions. Common sense rules for the real world are often just fragile collections of socially reinforced illusions.
For example, the traditional path of completing your schooling, getting a job, working for most of your adult life, and then retiring, is assumed to be the best path. However, the New Rich (NR) have chosen to abandon the deferred-life plan and live the lifestyle they want to live in the present. The NR value time and mobility over money. The goal isn’t to have millions in the bank, but to be able to live the life that having millions supposedly allows.
“People don’t want to be millionaires—they want to experience what they believe only millions can buy.”
This book is broken down into four main sections:
People often spend their lives working to be able to buy things they don’t really need. Avoid being a deferrer - saving it all for retirement. Avoid pursuing money for the sake of money, and instead pursue what you really want to do. For example, it often costs less to travel and have adventures than most people think.
Money is multiplied in practical value depending on the number of W’s you control in your life: what you do, when you do it, where you do it, and with whom you do it with. This is called the “freedom multiplier”. Freedom and having options is more valuable than money - it’s about creating options with the least amount of effort and cost.
With this in mind, you can be more wealthy by doing less of what you do now. There are strategies for doing 90% of the work in 1 tenth of the time, and for having control over your schedule, such as delegating mindless work and focusing on high-value work.
Aim to replace your assumptions and redefine success. Know the rules and look for loopholes. Assume that everything popular is wrong, ask yourself what the opposite is, and decide if that is better. Keep in mind that trying to please everything will leave to failure.
There is a difference between challenging the status-quo and being stupid. The following are fundamental differentiators:
Retirement is worst-case-scenario insurance, not the final goal
Interest and energy are cyclical
Less is not laziness
The timing is never right
Ask for forgiveness, not permission
Emphasize strengths, don’t fix weaknesses
Things in excess become their opposite
Money alone is not the solution
Relative income is more important than absolute income
Distress is bad, eustress is good
Most people choose unhappiness over uncertainty, and tend to inaction rather than doing and taking a risk. There is no difference between a pessimist that takes no action because there is not point and an optimist that takes no action because everything will turn out fine. Things will not improve on their own - action is required.
Defining your fears through fear-setting will help you to conquer your fear and take action:
Define your nightmare
What steps are required to repair damage
What is the probable scenario
If you were fired today, what would you do
What are you putting off out of fear
What is inaction costing you
What are you waiting for
Test your comfort zone - for example, contacting three people that seem impossible to reach. Doing the unrealistic is often easier than doing the realistic, as others may avoid doing what they think is unrealistic, giving you a better chance.
A good question to ask yourself is “what excites you”, and make plans for what activities you will do once you have more free time from a reduced workload. Dreamlining is an exercise that can be done where you create a plan for realizing your dreams with a timeline. The following are some important questions to ask:
What would you do if there were no way you could fail? If you were 10 times smarter than the rest of the world?
What does “being” entail doing?
What are the four dreams that would change it all?
Determine the cost of these dreams and calculate your Target Monthly Income for both timelines.
Determine three steps for each of the four dreams in just the 6-month timeline and take the first step now.
To have an uncommon lifestyle, you need to develop the uncommon habit of making decisions, both for yourself and for others.
Be more efficient (i.e. doing something as economically as possible) and effective (i.e. doing things that get you closer to your goals) with your time in order to be more productive. Don’t try to do more in one day or to be busy, but to do the most high-impact tasks, eliminating everything else.
Doing something unimportant well does not make it important
Requiring a lot of time does not make a task important
What you do is infinitely more important than how you do it.
Pareto’s Law (also known as the Pareto Distribution or the 80/20 Principle) states that 80% of the results result from 20% of the effort and time. This can applied in many scenarios.
Parkinson’s Law dictates that a task will swell in perceived importance and complexity in relation to the time allotted for its completion.
To increase productivity, define a short to-do list and a not-to-do list, and apply the following:
Limit tasks to the important to shorten work time (80/20)
Shorten work time to limit tasks to the important (Parkinson’s Law)
Go on a low-information diet and cultivate selective ignorance. For example, avoid the news - you can ask people what is going on in the world instead, and the important stuff will come up. Ignore or redirect all information and interruptions that are irrelevant, unimportant, or unactionable. Decrease your input, and increase your output.
Avoid interruptions - anything that prevents the start-to-finish completion of a critical task:
Time wasters: anything that can be ignored with little or no consequence, such as email and meetings
Time consumers: repetitive tasks or low-level tasks that need to be completed but interrupt high-level work - try and batch tasks where possible
Empowerment failures: instances where someone needs approval to make something small happen - give people responsibilities and trust
Automate your income and delegate your tasks. This allows you to remove financial concerns and free your mind to focus on other things - things that you would do if you didn’t have to think about money.
You will need to find your muse: a business that you own that generates cash that you spend very little time on. Many successful companies do this - they outsource their work to other companies and make a profit. It is important to think about cash flow and time spent to generate that cash flow.
To find your muse, you will need a product to sell. You can convert expertise into a shippable hard good to escape the limits of a per-hour-based model, although in the beginning constant customer contact makes absence difficult.
Find your market (define your customers) and then find or develop a product for them. Try to find a narrow niche.
Brainstorm or find products with your niche market in mind. Come up with well-formed product ideas and spend nothing. Be able to encapsulate the main benefit in one sentence. It should cost the customer $50 - $200 in the high-end price range. It should take no more than three to four weeks to manufacture. It should be fully explainable in a good online FAQ. There are two options:
Resell a Product
License a Product
Create a Product
Information products are a great option. Being an expert in this case just means knowing more about the topic than the purchaser. Some considerations:
What skills are you interesting that you and others would pay to learn? Become an expert in this skill and crate a product to teach the same.
Do you have a failure-to-success story that could be turned into a how-to product for others?
How to become an expert in 4 weeks:
Join two or three related trade organizations
Read the three top-selling books
Give one free one-to-three hour seminar
Optional: Offer to write one or two articles for trade magazines
Use inexpensive advertisements to test consumer response to a product prior to manufacturing. Ensure that your product can beat the competition and offer a superior product or guarantee. Test your advertisement. Once you find a good combination of product and advertisement process, you can choose to continue to invest more money and sell your product.
Design a self-correcting business architecture that runs itself so that you don’t have to worry about managing people. Start with the end in mind. The goal isn’t to create a business that is as large as possible, but a business that bothers us as little as possible. The architecture should place us out of the information flow instead of putting us at the top.
This can be done by contracting outsourcing companies, and ensure that all outsourcers are willing to communicate amongst themselves to solve problems. Give them written permission to make inexpensive decisions without consulting you first. Determine common questions from customers and create an online FAQ.
The more options you offer the customer, the more indecision you create and the fewer buyers you will get. More options also results in more complexity when managing your business.
Once you have some cash flow, carefully vet your customers. Try and do business with good customers that are low maintenance, and avoid bad customers that demand too much. Remember the 80/20 principle. Those that spend the least and ask for the most will do the same after the sale. Those who spend the most complain the least. Make your customer base an exclusive club, and treat the members well once they’ve been accepted.
Utilize lose-win guarantees, where you remove the risk for the consumer. Although it increases financial risk, it ends up being a net positive.
The following are ways to appear like a Fortune 500 company:
Don’t be the CEO or founder
Put multiple email and phone contacts on the website
Set up an interactive Voice Response remote receptionist
Do not provide home addresses
Free yourself from having to be location-dependent. Having unrestricted mobility is a power. The following are steps on how to do this with your job:
Prove increased output offsite
Prepare the quantifiable business benefit
Propose a revocable trial period
Expand remote time
Being able to quit things that don’t work is integral to being a winner. Investing a lot of time and effort into something does not make it worthwhile. It’s easier and less painful than you think - it’s just a matter of ripping off the bandaid.
Self-imposed suffering can be avoided. There are two types of mistakes: mistakes of ambition and mistakes of sloth. The first is encouraged, and the second should be avoided.
There is no need to wait for retirement to enjoy your life. There is no reason to spend most of your life working to make a lot of money so that you can live comfortably and do what you plan to do when you retire, when you can do that right now. Traveling is a lot cheaper than people think.
As an alternative to binge traveling where you squeeze in a lot of travel into a short period of time, mini-retirements entail relocating to one place for one to six months before going home or moving on. This is not an escape from your life but a re-examination of it. Aim to experience the world in a way that changes you.
True freedom is more than having financial, time, and location freedom. It also includes freedom from material addictions, envy, and other negative emotions. It usually takes two to three months to unplug and become aware of how much we distract ourselves with constant motion. Learn how to slow down and be more intentional. More is less in many cases when it comes to things that you own - try clearing clutter.
The biggest risk in life isn’t making mistakes, but regret: missing out on things.
Once you subtract work, you will need to add life back in. It’s normal to feel strange and even depressed after you have more time, as you may feel like you have too much idle time being unfulfilled. The goal is to ultimately live and become more.
Once you live all of your external fantasies, you may start to feel bored and unfulfilled. You are not alone - ensure you are around people and making new friends. Be wary of outdated comparisons of having to have more money or more things than others - this was what caused the problems to begin with. Instead, fill your time with being completely focused in the moment on something external: someone or something else.
Life exists to be enjoyed and the most important thing is to feel good about yourself. To live is to learn.