Summary: The 4 Hour Workweek
Tim Ferris published this book with an intention to help readers probe their ideas of work and achievement. Represented here are a few of the core ideas, and there is a link below to a much more comprehensive summary for those who would like to explore deeper.
For many, work is a means to an end (money), rather than an end in itself. Tim advocates exploration of our intentions and deeper needs in order to achieve ‘real wealth’.
Readers are challenged to look at pre-conceived ideas such as retirement, which he re-defines as mini-retirements, where one takes low cost, high learning explorations throughout their life, capitalising on the ability available at the time.
This example can be used to explain the difference between ‘deferrers’ and the ‘new rich’. While deferrers will wait for an eventual retirement, the new rich seek to find a piece of that end in the present, and to create conditions that enable that.
He defines ‘real wealth’ as having time, mobility and income to pursue projects of one’s choosing and on one’s terms.
It is hard to break out of pre-existing systems, but as long as it does not harm others, he advocates asking for forgiveness, not permission.
Simplification entails simply understanding what one truly finds important, and eliminating or reducing things that are not.
Complaints of lack of time reveals a lack of priorities.
The 80/20 rule drives this concept, with a brutal application of the principle that 20% of work yields 80% of the results. “What 20% of sources are resulting in 80% of my desired outcomes and happiness?” must be asked frequently.
Tim applies this idea by only checking his emails twice per day, and not reading the news, with the idea that if it is important, he will get to know it.
He advocates managing more efficiently through escalation - try to find solutions first through email, then phone, then in person.
In management he practices delegation, defining a level of responsibility for his staff to make independent decisions. This accepts that there will be some errors of judgment on their part, but that overall they have opportunities to learn, and the organisation becomes more autonomous.
After elimination, there should be a clearer, cleaner idea of tasks that need to be accomplished. It is important that elimination is done well, as resources invested in automation can be directed effectively.
You could split the things you do into two parts, interesting and non-interesting. Non-interesting work should allow you to pursue the things that you find interesting.
Tim advocates working out your hourly rate, and then use geoarbritrage to try to farm out the non-interesting work to lower cost bases around the world.
Income autopilot revolves around the idea of creating businesses that generate cashflow for an individual while requiring very little time to manage.
He suggests picking a niche market, defining your customers and then designing a product around them, explaining the process with 4 ideas:
1. USP of the product should be explained in one sentence.
2. Should retail between $50-200, maximising not volume.
3. Should take less than 4 weeks to manufacture to control inventory.
4. Should be fully understandable with an online FAQ
He advocates testing ideas out for under $500 and using the learnings gained to evolve the idea forward, all the while empowering outsourcing companies to take key decisions.
There is a lot of detail in Chapter 11 that describes his methodology on gathering initial data for the business, to inform product, pricing and management by absence.
The end objective of that work is to create sources of cashflow that can fund your life. “Cashflow first, one time pay day second”
If one is able to achieve a stable cashflow, using geoarbitrage, one can move to a low-cost country to exploit currency differences.
If the business is set up in the US for example, living in a place whose cost of living is 2 times less will effectively double the impact of disposable income.
Relative income is more important than absolute income. Relative income is a measure of both time and money. The person working 10 hours a week and making $10,000 is richer than the person working 80 hours a week and making $100,000.
Now, one is free to pursue continual learning in any way that one desires and has time to hone additional sources of cashflow if required.
Use the time wisely.
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