Do you want to work eight hours a day, five days a week, until you hit that magical retirement age? Most adults believe that they will be too old to enjoy their retirement by the time they are ready to retire. Wouldn’t it be great if you could work four hours a week, from anywhere in the world, and earn as much in a month as you currently do in a year?
Yes, you too can work only 4 hours a week!
The author insists that you can reduce your workweek down and that it is not a pipe dream. In fact, the author Tim Ferriss did just that and stated that you could too. Now, I will be honest. I read this book about 12 years ago. I was longing to retire from my 9 to 5 job and live a comfortable life. However, I knew that I could not realize this dream while working for the Government and would be foolish to give up my retirement. So, I ended up retiring at the age of 56 through proper financial planning. Now, I know many people are jealous that I could retire at such a young age. However, it was not without a lot of sacrifices.
Old Money vs New Money
According to Tim Ferriss, there is a subculture that is characterized by mobility and financial freedom. Unlike the rich of old, who were locked to a location, the new rich are wealthy jet setters who control their time. Now don’t think for a minute that these people were born into money. They were not. They did, however, manage to achieve wealth by automating their income and developing a popular product.
Tim lays out the recipe for attaining this lifestyle. You will also find out:
- How to use the Pareto principle to your advantage;
- How to establish a passive income stream; and
- How to organize mini-retirements in the here and now.
For the New Rich, wealth means luxury in the here and now.
Many people sacrifice their lives to the idea of retirement. They go to work every morning and work for 8 hours while dreaming of the day that they can finally kick back with enjoying their retirement.
Tim refers to these people as deferrers because they postpone life. Instead of living life today, they work themselves to the bone and put aside money for tomorrow. I know that I did just that. Tim did say they saved up a lot of money, but he felt that no amount of money is worth a lifetime of work.
Just consider Mark, who Tim met while on a flight from Las Vegas. Mark seemed successful. He managed casinos and gas stations, and convenience stores and worked a massive diamond ring. Mark regularly spends over $500,000 on trips to Vegas. But Mark is dead on the inside. He did not enjoy his jobs, nor his two ex-wives. Instead of living an enjoyable life, he’d deferred, suffering through 30 years of hateful employment so he could live like a big shot.
You don’t have to be a millionaire in order to live like one.
The New Rick (NR) discovered that the right moment to realize one’s dreams is now. They know that the things most people associate with millionaires – extensive travels, extravagant hobbies, maybe a butler- add up to two things: more freedom and more time. But let’s face the fact that it is impossible to have those things without a million-dollar bank account. According to Tim, anyone can have a million-dollar bank account and traveling the world.
Flexibility and mobility are crucial to a life of luxury. They are the prerequisites for doing whatever you want to do, whenever you want to do it. But neither can be achieved by working a standard 40-hour week.
Define your own rules and throw negative beliefs overboard.
The new rich believe in increasing the money they make and reduce the hours they work through a formula called DEAL.
- Definition
- Elimination
- Automation
- Liberation
Step 1: Define
You must first redefine your approach to work. To do this, you have to give a new definition of your goals. Your current goals are most likely aligned with your common deferrer goals. To join the new rich, you must change this.
Retirement is the Light at the End of the Tunnel
For most, retirement is the light at the end of the tunnel—a day of promised freedom. The new rich reject his idea; instead, they switch between intense phases of work and mini-retirements. These mini-retirements can last between two weeks to two months long. During these mini-retirements, they completely relax or do something fun, such as learning how to fence.
Setting the Wrong Goals
The second mistake deferrers are in goal setting. Deferrers set small goals whereas the new rich set big, “unrealistic” goals. The belief is that since everyone starts small, the competition is fiercest at ground level. However, up at the top, the competition is sparsely populated. Few people dare to think big, which is why it’s sometimes easier to achieve the “unrealistic” than the “realistic.”
For example, you have an easier time raising #1,000,000 for your business than the $100,000 because there are more competitors at the $100,000 level.
Does this sound like an exaggeration or simply nonsense?
Experiments
Tim challenged a classroom of students at Princeton University to undertake a seemingly impossible task. Whoever came up with the most ingenious way to contact a very famous person and have them answer three questions would win a free trip worldwide.
Twenty students expressed interest, and they all failed. Why? They all failed because they did not even try. They were intimidated by the task. If one of them had sent the author a scrap of paper with some scribbles on it, he would have had to give the student the prize because those were the rules he set.
Unrealistic Goals
The “unrealistic” goal was easy to achieve due to the lack of competition and is the same for many other goals.
Don’t wait for the perfect money to quit your job and join the ranks of the new rich. Why? It will never come. To wait is to fear leaping into the unknown. But if you want to live the unhindered lifestyle of a millionaire, you have to trust yourself and take the plunge.
Pareto 80/20 Rule
An Italian economist named Vilfredo Pareto noticed something about the pea plants in his garden. About 80% of the peas were produced by 20% of the pods. He then noticed this ratio in other places too. About 80% of the land in Italy was owned by 20% of the population. This same 20% who owned the land were the same to own 80% of the country’s wealth.
What does this have to do with anything? Well, 80% of your work output results from a mere 20% of your effort.
Busy Work
The standard eight-hour workday hides this fact. Most employees have to work for eight hours, so instead of focusing on productivity, they emphasize activity. They organize their inbox or goof around with their phone. The person who looks the busiest often gets the raise because most companies’ time spent at work is the only evaluation factor.
Parkinson’s law
But about 80% of this daily activity is useless. Just because you spend a ton of time on work does not necessarily mean that you are addressing the right tasks, nor are you doing these tasks well. This is where Parkinson’s law comes in. Parkinson’s law states that the more time we have to complete a task, the more time we spend on it. In other words, if we have a report due tomorrow with only 1 hour left in the day, we will finish this report in the 1-hour time frame. Whereas, if we had four hours to complete the same task, we would take the entire four hours. The result is maximum effectivity, reduced useless activity, and, more often than not, increase revenue.
Save time by going on Information Diet and Eliminating Interruptions.
Applying the Pareto principle and only focusing on those crucial 20% tasks is time to move on to the next part of the formula.
Step 2: Elimination
One way to determine the important activity you should be doing is asking yourself, “Would I be happy if this task ends up being the only one I complete today?”
This will help you eliminate time0cnsuming interruptions that prevent you from completing a task. For example, surfing the web, responding to unimportant emails, and conducting phone calls and meetings.
Meetings
The only time to hold a meeting is if there is an important decision that needs to be made, and even then, there needs to be an agenda and a time limit. If it does not make sense to attend the meeting, then simply stop going to the meeting.
With this thought process in mind, you can apply it to business conversations. For instance, instead of asking the typical questions of “how are you? You would simply state, “What can I do for you? Or “Unfortunately, I only have two minutes to spare.
Information Diet – Four Hour Work Week
To help you prioritize crucial tasks, consider going on a strict information diet after all-consuming media can be extremely distracting. How do you start? Well, you only consume any information that does not pertain to your work or well-being.
During your weeklong media fast, you do not read any newspapers or magazines and abstain from surfing the web. You can get a concise five-minute summary by asking a coworker to brief you on world events during your lunch break.
There is no need to read every book out there on specialized subjects. Rather, seek out an expert who can present complex content in the course of a short workshop and answer your questions quickly. By seeking out, experts will do two things for you. First, it will save you a ton of time, and secondly, it will give you better results.
Being Productive requires self-discipline and controlling your environment.
The majority of people start their day by checking their emails. This is a big mistake because most emails are time wasters. So, what should you do? It would be best if you spent your time tackling important projects. What do I mean by important? You must work on the projects that bring you closer to your personal goals. After eliminating all time wasters, all that is left is the most critical task.
The first thing you should do once you get into the office begins work on these important tasks. They are your priority. The goal is to finish all important tasks before midday.
The best way to handle your email is only to review it once or twice a day. Once in the afternoon and once in the evening. Once you have managed that, go to the next step of only reviewing your email once per week.
Ensure that you inform friends, family, and coworkers about this new habit by setting up an auto-response explaining that you are limiting the time you send on email to serve them better. This process will let those with urgent matters contact you by voicemail while concentrating on those essential tasks.
You will find that many small questions and tasks accumulate in your inbox will allow you to deal with them all at once. This will save you both time and stop the interruptions that interfere with you completing those important tasks.
Regular office employees can also live the new rich lifestyle.
If you are an employee, there is no way that you jump straight to automation. It would help if you first liberated yourself from the office.
By defining your goals and eliminating all interruptions, you can greatly increase your effectiveness to the point where you can accomplish in ten hours what your coworkers get done in 40. But most workplaces encourage activity, not effectivity, which means that no matter how little time it takes you to complete your work, you will always have to put in 40 hours per week.
The solution is to escape the office. This will allow you to work less and enable you to work from anywhere you want.
Here are the five steps to vanishing from the office:
- Increase your value to the company
- Prove increased output when remotely working
- Quantify the business benefit
- Propose a trial period
- Expand the time you work remotely.
Here is an example from Four Hours Work Week
Bill wants to dedicate more time to his side business of selling sailor shirts on eBay. He starts by making himself indispensable. He talks to his boss about additional training that would help him better serve his clients; the goal is to increase his value to his employer.
Meanwhile, the experiments. He calls in sick on Tuesday and Wednesday, stating that he will work from home. He chooses these days to look like an excuse for a three-day weekend and allow him to test his productivity without the weekend dangling in front of him.
Bill keeps a record of how much work he did with quantifiable records and email trials. He also doubles his output which is easy due to the lack of distractions at the office.
Next, Bill creates a proposal detailing how his working from home will benefit his boss and why he’s more productive out of the office since he does not have to worry about commuting or other office-related distractions.
Bill suggests a trial period in which he will work from home one day per week for two weeks. Bill’s boss accepts the proposal. Bill again ensures that he doubles his productivity when working from home than at the office. This gives him further proof that he’s working from home is beneficial to the company.
Now all he has to do is increase those days away from the office to five, which should be easy considering the added productivity his boss is seeing. In essence, he should be able to work from anywhere in the world.
Automation – Four Hours Work Week
The next step is to create a business that can totally function without your input by establishing automated income sources that are maintainable anywhere in the world. Thereby generating income without spending all your time at work.
Instead of personally managing your product’s distribution, you partner with a company that can do it for you and hires an agency to maintain your website, so you do not have to. Your goal is to read the reports of your service providers and only step in when necessary.
How do you ensure that things run smoothly?
Everyone involved in the business must have the freedom to communicate independently with one another. Secondly, you should give as much responsibility as possible to those you have entrusted with your tasks. This will allow people to solve problems without needing your input or approval. Thus, saving you tons of time and gives your more freedom.
‘Hire Virtual Assistances To Help With Your Four Hours
Considering hiring virtual assistants to manage tasks. If you are worried about the cost, remember to factor in the time you save. If you presently make $25 per hour and the virtual assistant would cost $30 per hour, it only costs you $5 per hour. You could take the entire day off for the cost of just $40.
As with every employee hire, you need to vet the virtual assistant. It may take you a while to find the perfect fit. However, finding the best virtual assistant will be well worth the effort.
However, Tim does not tell you how to manage these virtual assistances so that you know what is happening in your business.
You need a product to sell for your automated income stream.
When creating an automated income stream, you will also need to also construct the supporting architecture around the product you want to sell.
Do you remember Bill, who wanted to spend more time selling his sailor shirts on eBay? The problem will be reselling an existing product is that there are small profit margins. It would be better to design your own product, something that will bring in as much money as possible with minimal effort from you.
No matter what product you sell, it is important that you can outperform the competition and demonstrate to prospective customers that you are the best person to buy from. Creditability can be accomplished by attaining indicators of credibility like a Ph.D.
Alternatively, you could establish your expertise by attending seminars and conducting thorough research with relevant textbooks and websites.
Test the Market BEFORE making the Product.
So how did Bill figure out if reselling his shirts was profitable? Before he even purchased his first shirt begins offering them on eBay. Anyone who clicked on his offer was told that it was only possible to “backorder” the product—a lie, ye, but also a great way to test the actual demand.
Once he knew how many shirts were likely to see, he made his first order. After selling 12 shirts in five days, Bill ordered 24 shirts and sold them in 12 days. He kept a close eye on demand, and demand continued to increase until he considered leaving his job altogether.
Four Hours – Offer premium membership and make a big promise
You need to be able to summarize the product’s purpose in one sentence. For example, when Apple released the iPod, everyone knows what it was by the logan: “1,000 songs in your pocket.”
Next, you need to make it easy for customers to decide to purchase your product. It is best not to have a ton of options. The more colors and designs your customers choose from, the more likely they will not buy the product.
The next step is to attract the right customers. You should give your product a high price point, somewhere between $50 to $200. This will give your product a premium image and increase your profit margins, and decrease complaints.
Lastly, make a bold promise to show customers how serious you are about your product and give them the added confidence they need to purchase.
Summary of Four Hour Workweek
Instead of wasting away for the rest of your days in an office, waiting for retirement, start enjoying life today by joining the New Rich and going on periodic mini-retirements in the here and now. Begin by defining bold goals for yourself, then focus your efforts on 20% of the most impactful tasks. Then get yourself out of the office by showing that you are more effective working at home. Stop going to pointless meetings and quit the habit of continually checking your inbox. Finally, automate your income by identifying and testing different products you can sell through your automated system.
Not Sold
While I am not sold on the four-hour workweek, Tim Ferriss is on to something about everyone being busy doing things that don’t matter at the end of the day.
Vacations
Instead of wasting away for the rest of your days in an office, waiting for retirement, start enjoying life today by joining the New Rich and going on periodic mini-retirements in the here and now. Begin by defining bold goals for yourself, then focus your efforts on 20% of the most impactful tasks. Then get yourself out of the office by showing that you are more effective working at home. Stop going to pointless meetings and quit the habit of continually checking your inbox. Finally, automate your income by identifying and testing different products you can sell through your automated system.
Not Sold
While I am not sold on the four-hour workweek for several reasons, as I said before, I first read this book while I was a Government employee. I can tell you firsthand that a lot of his suggestions would not work for me. The manager at the time that I read the book did not embrace working from home. If you were not in the office, then he felt that you were out goofing off. When you were allowed to work from home, you had to write a report on everything that you accomplished during the day. I was fine with that. Even though I proved that I was more productive at home, it did not change the management mindset. Also, highly productive employees were expected to and given additional workload to do. This made it impossible to implement the theory that Time Ferriss mentioned in his book.
Business Oversight
The second reason that I feel that the book fails is that Tim mentions having others manage their businesses daily, allowing you to work only a few hours per week. I can tell you from working with 1000 small business owners who have tried this not to work. The employees tend to do the following: fail to complete tasks due to lack of oversight, steal from the company, or adopt the owner’s philosophy that they don’t have to show up to work. If I am paying someone to perform a job, I need some oversight to ensure that they are actually doing what I hired them to do.
Pipe Dream?
To make the dream of working a 4-hour workweek a reality would require many processes with checks and balances in place. The owner would have to verify that these processes were working diligently. Maybe I am just old school, but I don’t believe you can own a business and sit back and watch the money come in without some oversight.
I believe that Tim’s model is capable if your business model is totally operating on passive income. That is the way I am structuring my business presently. It will be a few years before I get there, but it will happen. You still will have to spend time working on the business. You just will not be working in the business.
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