The 4-Hour Workweek (2009) shows the life of the New Rich, people who’ve freed themselves from the slavery of office work and built a life focused around happiness in the here and now. If you want to commence such a life too, you’ll have to start by being more productive and finding a source of constant – and almost entirely passive – income.
About the author:
Tim Ferriss is a successful investor and advisor to technology startups. He was associated with creating companies like Uber, Facebook, Alibaba, and many more. He is also the creator of a renowned podcast series, The Tim Ferriss Show. His other books include Tribe of Mentors and Tools of Titans.
For the New Rich, fortune equals immediate luxury:
Many people sacrifice their whole life awaiting retirement. They go to work every day and sit in an office for eight hours, anticipating the day when they’ll have served their time and can finally relax under the golden sun and a beach view with a cocktail.
The writer calls those people deferrers because they basically postpone life. Instead of living in the moment, they work tirelessly to save some money for the future. True, they may have collected a considerable amount of money eventually, but no money can compensate for a lifetime of struggle.
Consider the author’s experience with a man, Mark, on a flight from Las Vegas. Mark appeared to be the epitome of success: a man who had run casinos, gas stations, and convenience stores, and who now wore a large diamond ring and spent more than $500,000 on trips to Vegas regularly. On the other hand, however, he was empty on the inside. He hated every job he’d ever had, and his two ex-wives had given him as little happiness as his current wife. Instead of enjoying a happy life, he’d postponed it for 30 years in a miserable job so that he could live like a superstar. Well, here is the thing: It is not necessary to be a millionaire to live like one.
The New Rich (NR) have recognized that now is the best time to pursue one’s aspirations. They understand that many people associate with millionaires — extended travels, fancy hobbies, perhaps a butler – all boil down to two things: more freedom and more free time. Having those items is feasible even if you don’t have a million-dollar bank account. In truth, both are relatively simple to achieve.
A luxurious lifestyle necessitates mobility and flexibility. They’re both necessary for being able to do everything you want, whenever you want. Neither can be attained by working a conventional 40-hour week.
Make your own rules and cast out any negative notions:
The NR are against working-class norms. Instead of slaving away in an office, they use the DEAL formula to raise their earnings while reducing their working hours.
To begin, you must redefine your approach to work to join the NR. This entails adjusting your objectives. Your current aspirations are most likely better compatible with common deferrer goals, but if you want to join the NR, you’ll need to adjust that.
Let’s commence with the topic of retirement. For most people, retirement is the anticipated day of freedom at the end of the tunnel. Instead, the NR alternate between heavy periods of work and mini-retirements – short vacations of two weeks to two months, during which they either entirely relax or do something enjoyable, such as learning to fence.
Deferrers also make the error of starting small instead of setting high, “unrealistic” goals. The battle is most challenging at the ground level because everyone starts little. However, it is poorly populated at the top; few individuals dare to dream big, which is why it is sometimes simpler to reach the “unrealistic” rather than the “realistic.”
For instance, raising $1,000,000 for your company will be simpler than raising $100,000 because more rivals will aim for the “realistic” amount.
The author once challenged a class of Princeton University undergraduates to complete an allegedly difficult feat. Whoever found the most innovative method of contacting a well-known figure – such as Beyoncé or Barack Obama – and having them answer three questions would receive a free round-the-world vacation.
Twenty skilled and intelligent students showed an interest. And they were all screwed. But here’s the thing: they didn’t even try. Thus they failed. They were all so terrified of the work that they didn’t even attempt it. Because those were the terms he’d set, if one of them had delivered the author a scrap of paper with some scribbles on it, he’d award the prize to that student. Due to the lack of competition, this “unrealistic” aim was unexpectedly easy to attain, as was the case with many other similar projects.
Last but not least, don’t wait for the ideal opportunity to quit your job and join the NR — it will never arrive. To wait is to be terrified of stepping into the unknown, of the seemingly unattainable. However, if you want to live the unhindered lifestyle of a millionaire, you’ll have to trust yourself and take the leap.
“What we fear doing most is usually what we most need to do.”
Less is more when it comes to actual productivity:
Vilfredo Pareto, an Italian economist, noted something interesting about the pea plants in his garden in the late 1800s: around 80% of the peas were grown by 20% of the pods. He’d observed this ratio in other places as well – approximately 80% of the land in Italy was occupied by 20% of the population, who also owned about 80% of the country’s wealth.
What connection does this have to you? Around 80% of your work production should come from only 20% of your effort if you’re anything like the author.
The usual eight-hour workday obscures this truth because most employees are required to work for eight hours. They prioritize activity over output. They organize their inboxes, play with their phones, and stroll from cubicle to cubicle with a sense of self-importance. And, in most workplaces, time spent at work is the only measure for performance, so the individual who appears to be the busiest typically gets the raise.
However, around 80% of the everyday commotion is essentially meaningless. People generally prefer efficiency — the most cost-effective completion of any work, no matter how insignificant – to effectiveness, which is the efficient execution of primary jobs. A door-to-door salesperson may be efficient, but he will never be productive; he can sell his wares via mail or email while focusing on other, more important activities.
Keep in mind that putting in a lot of time at work doesn’t always imply that you’re tackling the proper tasks or executing them well. On the contrary, according to Parkinson’s law, the more time we have to finish a task, the more time we’ll spend doing it. So, if we only have an hour to complete our project’s final report, we’ll do it in that time, but It will take four hours if we have the whole afternoon.
The NR identify and prioritize the 20% of work that will provide 80% of the results, and they accomplish these duties in the shortest amount of time possible. This allows them to enhance effectiveness, reduce useless activities, and, in many cases, boost revenue.
Eliminate distractions and go on an information diet to save time:
Now that you’ve applied the Pareto principle and started focusing on that critical 20% of work, it’s time to move on to the DEAL formula’s next step: elimination.
One technique to focus your efforts is to assess the value of each task by asking yourself, “Would I be fulfilled if this task were the only one I completed today?” This will assist you in eliminating time-consuming disruptions that hinder you from finishing a task without interruption. Time wasters, or things that you may postpone without negative consequences, are perhaps the most damaging type of interruption. The most usual is browsing the web, responding to meaningless emails, and making phone calls and meetings.
Let’s talk about meetings. A meeting should only be held when a significant decision needs to be taken, and even then, there should be a plan and a precise time limit. Moreover, if you believe your attendance is unnecessary, then avoid the meeting.
In the same sense, business talks should not devolve into needless ranting and raving; instead, they should adhere to the topic at hand as fast as possible. Replace “How are you doing?” with “What can I do for you?” to attain this. or “Sorry, I barely have two minutes to spare” to start a conversation.
A rigorous information diet is yet another technique to prioritize critical tasks. Because media usage can be very distracting, try adopting selective ignorance – absorbing only information relevant to your work or well-being.
The most accessible approach to getting started is going on a week-long “media fast,” where you don’t read any newspapers or magazines and use the internet. Instead, during your lunch break, have a well-informed coworker give you a five-minute update on current events, or ask your partner to update you on the day’s news in the evening.
You also don’t have to read every book on a particular topic. Instead, choose an expert who can explain complicated content in a brief conversation and promptly answer your concerns. Because the knowledge will be simplified and presented clearly, you will save time and get better outcomes.
Self-discipline is necessary to be productive:
What is your regular workday routine? You probably check your inbox first thing if you’re like most people. As it turns out, this is a huge oversight, as most emails are time wasters.
So, what are you supposed to do instead? As you’ve learned, being productive is accomplishing as much as possible in as little time as possible while focusing on projects that are valuable to you – that is, projects that help you achieve your own aspirations. You should only be left with tasks that satisfy this condition once you’ve eliminated all time wasters.
These tasks should be given top priority because they are so significant. You should start working on the first thing every morning without even checking your email. All of the main chores should be completed by midday on an ideal weekday.
Reading and responding to emails twice a day, once in the afternoon and the evening is a smart method to start detoxing yourself off email. If you can do that, consider taking it a step further, and you’ll soon be handling emails only once a week. Set up an auto-response to let your friends, family, and coworkers know about your new habit, emphasizing that you’re restricting your email time to serve them better and that it may take a while for you to respond. Those around you will adjust and understand that the majority of messages may wait in your email inbox or voicemail while you focus on more essential matters. Truly urgent requests should always be made over the phone or in person.
Allowing a large number of small questions and chores to pile in your inbox will allow you to deal with them all at once, saving you time and allowing you to focus on more essential duties.
Now you know how to operate more efficiently. This does not yet equal a four-hour workweek. If you want to spend more time relaxing in a hammock on a secluded island with a cocktail in hand, you’ll need to break free from the place where your job holds you.
Even regular office emloyees can live the NR lifestyle:
So you’ve implemented half of the DEAL formula in your working life: you’ve set goals and eradicated time-consuming tasks. However, if you’re an employee, you can’t just go directly to automation; you’ll need to get out of the office first, so the formula becomes DELA.
How? You may dramatically boost your effectiveness by establishing your goals and removing all interruptions, to the point where you’d be able to complete in ten hours what your colleagues do in 40. But keep in mind that most organizations promote activity rather than effectiveness, so no matter how little time it takes you to finish your work, you’ll still have to put in 40 hours every week.
The only way out is to leave the office. Not only will you be able to work less, but you will also be able to work from wherever you desire.
To leave the office, follow these five steps:
Boost your company’s value by increasing your own.
Demonstrate higher productivity when working from home.
Calculate the business benefit.
Make a proposal for a trial term.
Increase the amount of time you work from home.
Consider how Sherwood, who wants to devote more time to his side business of selling sailor clothes on eBay, accomplishes this “vanishing act.”
He begins by making himself as valuable. He discusses more training with his supervisor in order to better serve the company’s clients to increase his worth to his business.
Meanwhile, he runs a test: on Tuesday and Wednesday, he calls in ill and says he’ll work from home. He chose these days so that it doesn’t appear like he’s taking advantage of a three-day weekend and so that he can put his productivity to the test without the temptation of a three-day weekend hovering around him.
He keeps track of how much work he accomplishes with quantitative records and an email trail these days, and he doubles his work output on purpose, which is easy thanks to the lack of distractions at the office.
Sherwood then writes a proposal outlining how working from home will benefit his boss and why he is more productive outside of the office because he isn’t distracted by transportation or other office-related issues. He proposes a temporary trial period at this point, in which he will work from home one day per week for two weeks. The suggestion is adopted, and on these at-home days, Sherwood guarantees that his output doubles as compared to when he is in the office, demonstrating yet again that working from home benefits the organization.
All Sherwood has to do now is increase his away days to five, which should be straightforward given the increased productivity his supervisor is witnessing, and he’ll be allowed to work from any place on the planet.
Create a business that runs on its own, with no effort on your side:
It’s finally time to talk about automation, the A in the DEAL formula, which is critical if you disconnect your working time from your earnings. You, like today’s New Rich, can lead whatever type of life you want by developing automatic streams of income that can be maintained from anywhere in the world because you’ll create income without spending all of your time at work.
Now, if you want to develop an automated money stream, you’ll need to build a business that runs itself without any effort on your side. For example, rather than managing your product’s distribution yourself, team up with a firm that can do that for you and employ an agency to manage your website, so you don’t have to. You should play a minimal role in this configuration. Opt to read your service providers’ reports and intervene only when needed.
So, how can you make sure that things stay on track while you’re away?
First and foremost, everyone involved should be able to interact with one another but not through you. Second, you should delegate as much authority as possible to the people you’ve entrusted with your responsibilities. People will be able to solve problems without your input or consent, saving you a lot of time and giving you a lot more freedom.
But who should be responsible for all of this?
Hiring virtual assistants, or VAs, is one possibility. You may hire virtual assistants from practically anywhere, from Canada to India, and who you hire is entirely dependent on your need. If work necessitates fluency in English, you may choose to hire a native English speaker.
If you’re concerned about the cost, keep in mind the worth of the time you’ll save. Assume you now earn $25 per hour, while an assistant of this caliber would likely cost roughly $30 per hour. This means that for every hour of work the assistant performs for you, the effective cost is only $5, allowing you to take an entire Friday off for only $40. It doesn’t sound half-bad.
Indian VAs are far less expensive and are often as good as, if not better than, their English-speaking Western counterparts. Finding a good VA is primarily a question of trial and error, so ask around about other people’s experiences, and don’t get disheartened if your first one doesn’t work out. Ideal VAs definitely exists, and it’s well worth the hassle to find them.
“Problems, as a rule, solve themselves or disappear if you remove yourself as an information bottleneck and empower others
For your automated earnings, you’ll need a muse:
Of course, you’ll need a product to offer if you want to build an automated income stream and the technology to support it. This could be a previously released product that you opt to resell.
Remember Sherwood, who wanted to spend less time at work so he could concentrate on his side business of reselling sailor clothes on eBay?
The sole drawback to this strategy is that reselling an established product has lower profit margins. So it’s best to create your own product, something that will bring in the most money with the least amount of effort on your part.
First, consider the markets you’re most acquainted with and develop product ideas depending on your results. Let’s call your best concept your muse to distinguish your company from a traditional startup, which isn’t what you’re aiming for. Your muse, unlike a startup, does not need to be managed by you. After all, you don’t want to be a businessman because you don’t want to devote all of your time to meetings, leadership, or management.
Look for your muse in a niche where you won’t have to devote much time or money to get started. Sherwood’s idea is a good example: he got resale sailor shirts for a profit without investing any money. For example, the author made a fortune with minimal time investment by founding an internet company in 2001 for nutritional supplement BrainQUICKEN®.
On a more practical point, you must exceed the competition and show potential clients that you’re the greatest person to buy from, regardless of what your muse looks like. This might be accomplished by obtaining credible indicators such as a Ph.D.
Alternatively, you can establish your knowledge through other means, such as joining seminars and completing rigorous research using appropriate textbooks and websites. You don’t need a fashion design degree; all you need is more knowledge than your potential customers.
Before launching your product, conduct market research:
Did you know that only about 10,000 of the 195,000 novels released each year sell more than 5,000 copies? Experienced editors and publishers frequently fail to promote their products. Have you heard of WebVan before? Before it went bankrupt, the founder of the bookstore chain Borders invested more than $375 million in a food delivery service.
The moral of the story is that neither experience nor business knowledge ensures success. In fact, there’s only one way to find out if your product will be successful: ask people to buy it. Present your hypothetical product to real customers and observe their reactions.
Perhaps you’re curious as to how Sherwood concluded that his proposal was profitable. He started selling sailor shirts on eBay before he bought his first one. Anyone who clicked on his offer was told they could only “backorder” the item, which was a fraud and a mechanism for Sherwood to measure genuine demand.
He placed his first order after determining how many shirts were likely to sell. Sherwood ordered 24 shirts and sold them in 12 days after selling 12 in five days. He kept a close eye on demand, and his sales kept rising to the point where he considered quitting his other work.
Consider Johanna, a yoga instructor who had a brilliant idea for a muse. She’d seen that more and more climbers were showing up to her session, so she decided to make a DVD with a specialized yoga course for climbers after checking to see whether such a thing previously existed (and found that it didn’t).
She created a website with testimonies from her students and used Google AdWords to run various ads. She could better evaluate demand and decide which search phrases worked best by evaluating click and conversion rates.
She made the DVD and began marketing it once she had gathered all of this information and was reasonably confident that her muse would be a success — and sales were better than predicted. She made back the initial production expenditures and the $250 she had spent on testing in the first week. She’s now selling ten DVDs per week for a profit of $750. For a first muse, it’s not too shabby!
Provide premium membership and make big promices:
Now that you’ve established that your product is in demand, there are a few things to consider when developing it to ensure its success.
To begin, you should be able to sum up, the product’s objective in a single sentence. According to the associated slogan, everybody knew what the iPod was for when Apple debuted it in 2001: “1,000 songs in your pocket.”
Next, make it as simple as possible for customers to determine whether or not to buy your product. Don’t put them in a position where they have to choose from a plethora of possibilities. Because comparing all possibilities is tiring, the more colors and styles your customers have to pick from, the less likely they are to purchase your products.
Third, you should set a high price point for your product to attract the ideal customers: anywhere between $50 and $200. This will not only give your product a high-end appearance but will also boost your profit margins and reduce the possibility of customer complaints. After all, anyone willing to pay such a high price is less likely to complain if the product fails to meet expectations because they are sure to have money to spare and are rarely troubled by minor issues.
Finally, your offering should make a major promise and follow through. Take, for example, Domino’s Pizza, which guarantees delivery in 30 minutes or fewer. If they don’t, you’ll get a free pizza.
Consider the author’s guarantee for the BodyQUICK product. He promised that it would work 110 percent of the time within 60 minutes of the first dose — that is, if you didn’t notice outcomes in just an hour of having your first dose, he’d return the product price and send you a check for 10% of the cost.
Such strong statements demonstrate your commitment to your products and provide your customers with the extra assurance they require to make a purchase.
“The question you should be asking isn’t, “What do I want?” or “What are my goals?” but “What would excite me?”
I haven’t read the book yet, but after reading this summary, it feels like I have read the whole book. Great read, and I’ve learned a lot more in this summary than I could have learned in the book.
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