Hey everyone, Happy New Year! I hope everyone had a safe and enjoyable holiday season, but now it’s time to get back at it. I apologize for any typos or grammatical errors in advance, but I’m tired and fat from too many delicious treats over Christmas.
I’ve spent the last 4-5 days driving my wife totally bonkers. Why? Because I’ve been reading the 4-Hour Workweek again by Tim Ferris. I read the book when it was first introduced, and I immediately implemented some of Tim’s recommendations. But now Tim is back with an Expanded & Updated version of the book which was just released last month. I believe 2010 is the year to truly put Tim’s methods into action.
So first things first – I’ve found that when I mention The 4-Hour Workweek (4HWW) it can instantly turn some people off just based on the title. My wife being one of them… She can’t imagine why I would only want to work 4 hours per week or how it would financially feasible to do so….So we better get something out-of-the-way, right away…The 4HWW isn’t really about working 4 hours per week. On a deeper level it’s about living and creating the ultimate life for yourself during this very short time we have here.
Many people hear the title and react as if you’re holding some sort of scam or get rich quick scheme. Maybe the title is a little off… Tim suggested he tested the title of the book and I believe with some it turns them off and with others it invokes some serious curiousness.
There’s a whole lot more going on here and I want to briefly explain to you some of what you’ll find.
I also want to mention that the 4HWW is currently my #1 reading recommendation for everyone looking for a plan in 2010. I’ll be implementing various aspects of the teaching and documenting them along the way.
The newly expanded and updated version has 4 sections or steps that give you a guideline for achieving the 4-hour workweek.
- Step 1: D is for Definition
- Step 2: E is for Elimination
- Step 3: A is for automation
- Step 4: L is for Liberation
The DEAL is the core of what makes up Tim’s step-by-step training plan to living the life of the New Rich (NR).
Tim constantly refers to the NR as those who realize that there is more to life than materialist possessions and retirement planning or as I would say, working to “buy stuff.” We all have so much “stuff.”
Here’s how we classify the NR versus Old Rich (OR)
To be considered NR you value
I’d put an emphasis on time because with all the money in the world and no time, the money really means diddlysquat.
“The NR are those who abandon the deferred-life plan and create luxury lifestyles in the present using the currency of the New Rich: Time & Mobility” – TF
The OR spend a lifetime building wealth and buying things along the way with the hopes of living and experiencing only if and when enough money is acquired and they can finally retire (i.e. granting themselves time)
The NR understand that all three can be had right now. Just reading the above sentence and the OR sounds like such a backwards way of thinking.
Tim says “Retirement planning is worst-case scenario insurance.” Suggesting that we should view planning for retirement as the life insurance against the absolute worst-case scenario. Diligent savers and the OR will also scoff at such a suggestion.
But Tim isn’t suggesting not to save, (he’s maxing out his own retirement savings every year) rather he’s suggesting that a life of working with retirement as the end-goal is flawed and he gives three reasons why:
1) It’s predicated on the assumption that you dislike what you are doing during the most physically capable years of your life.
2) Most people won’t be able to maintain their current quality or standard of living.
3) Most hardworking people get so bored one week into retirement they begin looking for a new job. Tim notes, “kinda defeats the purpose of waiting.”
Let’s break down each section of the book.
Step 1: D is for Definition
Definition is truly a great way to start the book. This chapter is about letting it all hang out. It’s about defining what your dream life looks like.
You’ll find similar aspects in various business books. Most goals in life will never come to fruition unless you can totally define exactly what it is you want in life.
Maybe it’s a Ferrari…
Maybe you want to spend 6 months of every year living in Patagonia fly fishing…
Maybe you want to learn new languages…or study the martial arts….or become a chef…
Whatever it is, this step is crucial for the NR. It’s about figuring out what it will cost to live your dream life. Tim does suggest a limit on material possessions when planning your dream life but it’s OK to include them if they are truly part of your dreams.
Tim wants you to nail it down, actually putting a dollar amount on it. He even suggests calculating it right down to the daily cost of living your dream life.
But aside from dreaming up your ultimate life, this chapter is also about defining your fears and nightmares or conquering pessimism in your life.
We’ve talked about fear of taking chances before. Tim wants you to define all your fears and challenges getting in the way of your dreamlining.
Step 2: E is for Elimination
This chapter is about time management. Many of Tim’s suggestions on just about everything in life are summed up using the Pareto Principle of 80/20.
The Pareto Principle states that 80% of effects come from 20% of the causes.
Tim asks us to consider the following
1) Which 20% of sources are causing 80% of my problems and unhappiness?
2) Which 20% of sources are resulting in 80% of my desired outcomes and happiness?
One of the things I really enjoyed about this chapter was Tim’s look at 9-5 work. I worked 9-5 in an office environment for a few months and I totally get it. Tim suggests that society has agreed to shuffle papers between 9-5 and much of that time is wasted (80/20). Yet society has deemed this the time when things get done and we do somehow manage to accomplish all the required tasks during this time even if we’re only working 20% of the day. Tim believes the concept of 9-5 is a totally arbitrary one and I tend to agree.
The ultimate goal of elimination is to find the 80% of distractions and eliminate them.
We then take the 20% of sources and use various techniques to even further optimize our output and eliminate time required.
Step 3: A is for automation
This is where things start to get interesting.
Outsourcing life and taking advantage of Geoarbitrage.
The NR take advantage of outsourcing.
“Becoming part of the NR isn’t just about working smarter by applying the 80/20 rule, it’s about building a system to totally replace yourself.” TF
Think about all those lingering tasks that we constantly put off and procrastinate. Imagine you no longer had to worry about them because your personal assistant in India was handling them.
This chapter seems to get most people’s blood boiling the quickest. “How appalling,” some might say to the thought of hiring a personal assistant in India, paying them far less than you’d pay someone in North America and having them do work for you.
But it’s really quite the contrary. The biggest companies in the world have been outsourcing everything for years and the NR have realized they can do so as well.
For example, if you believe Microsoft has been manufacturing and boxing up xbox’s to ship out, you’re dead wrong. They outsource and the NR apply the same techniques to both our personal lives and businesses.
Many will say, “why would I hire someone to do that when I can do it cheaper?” Tim confirms this…. “You can always do them cheaper but just because you can it doesn’t mean you should”
The book is chalk full of examples of how the NR are using outsourcing to improve their daily lives. I wanted to include a few here for enjoyment.
For the record I use outsourcing from a tech support company in India that handles the support of all the web-hosting clients I deal with. The support is professional and extremely fast. It costs me about $120 per month but frees up and unprecedented # of worry-free hours for me.
Examples of ways the NR have used outsourcing:
1) Finding a parking spot for your car in another city before you make the trip
2) Personal Chef for less than $5 a meal
3) House repairs while you’re out of the country
4) Charting a diet plan and ordering the groceries for you
5) Apologizing to your spouse and sending flowers when you screw up
6) Automatically sending flowers to your mother and spouse on the important days
7) Scheduling interviews
8) Personal daily wake up calls
10) Creation of reports, legal documents, graphic design, marketing
11) Web development, SEO
12) Travel Arrangements
Just about anything you can think of can be automated.
Outsourcing isn’t just about going overseas either. Just because you can get it done cheaper overseas doesn’t make it the right decision. There are certain language barriers that might not be as problematic if working with a Virtual Assistant in the USA or Canada. Either way, the 4HWW provides a ton of tips and strategies for finding appropriate outsourcing.
The main and ultimate goal is freeing up your free time to pursue your dream and dream life.
Relative VS Absolute Income
The NR are interested in relative income over absolute income.
Absolute income refers to the “Old Rich way of thinking” in that that the dollars made is what defines being rich. Your wage per year determines if you’re rich or not….
The NR value relative income and understand both money, time and mobility. The money you make per year is an arbitrary concept much like 9-5.
Here’s the example Tim provides.
Jane makes 100k per year
John makes 50k per year
In absolute terms Jane is wealthier than John. But take a closer look:
Jane works 50 weeks per year and makes 2k per week. She’s a workaholic and ends up spending about 80 hours per week in the office. She eats and sleeps with her blackberry.
In reality she makes $25 per hour.
John works 50 weeks per year and makes 1k per week. John is a member of the NR and works only 10 hours per week to provide 50k. In relative income terms , John is 4 times wealthier than Jane. John also earns $75 more than Jane per hour. Go figure… Yet our society would say Jane is richer.
You must keep in mind, 50K is all John needs to live his dream life he defined earlier. Your dream life will be different.
The rest of this chapter deals with creating a business that can automate the task of making money. When I first read Tim’s book this section was a let down. Tim started a company that sold a supplement and he did extremely well. But he didn’t share much more beyond that and still doesn’t in the expanded and updated version. Tim includes some basics on Google Adwords and testing but otherwise I was a little let down by this chapter. I would have liked to see Tim really break down the process of his supplement company or at least expand on this section.
Many of you who I work with or that read my blog will be at skill levels far beyond what Tim is teaching and I’d consider that a huge advantage…. By implementing the rest of Tim’s training you’re already going to be way ahead. For those who’ve never developed a product to sell on the Internet, Tim’s training will provide a nice base and starting point for you.
Step 4: L is for Liberation
This chapter is really what it’s all about for me and probably the reason I drove my wife completely nuts over the past week or so.
This chapter is all about breaking away from the norms of traditional society and truly embracing the ideals of the NR.
This is about working from home or working anywhere else in the world for that matter. Tim suggests mini-retirements and experiencing the world rather than seeing sections of it in a short 1-2 week vacations. Tim wants us to remove the shackles of the expectations of Western life and develop the rules on our own terms.
For the employee it’s about escaping the office but maintaining your job.
You’ll find it extremely interesting to see the employees who’ve used Tim’s advice to arrange remote work arrangements. I find this chapter most fascinating for those who do actually love their jobs but are looking for more.
Finally, this chapter is about filling the void in your life after you eliminate work.
There is so much more in this chapter but I’ve really gone on long enough.
All in all, this is a really rough take on the 4HWW but I hope I’ve said enough to intrigue you to buy and read it. The book has been on the bestseller list for over 2 years so he must be doing something right.
2010 is a big year for me. I plan to implement many of the ideas in this book and hope to share my journey with you.
Over the past week I’ve been suggesting to my wife the following:
A summer in Tuscany in a rustic old apartment drinking wine (maybe some of which we’ll actually make)
Three months of skiing in the Swiss Alps
An apartment in Paris where we could fatten up on pastries and poutine
Sipping Vodka in Prague
A few months in wine country in Argentina where I could do some world-class fly fishing…
She isn’t convinced yet or sold on the idea but she’s starting to see the light…maybe…….
Once again, Happy New Year and I wish you all the best in the coming year.
P.S. Right now on Tim’s site he has 18 videos and case studies from people who’ve successfully implemented the techniques and strategies found within the 4HWW. I suggest watching them all.