Most people want to be millionaires so they can quit their day jobs, travel, buy nice things, spend time with the people they care about, and pursue a hobby or a passion. However, in The 4-Hour Workweek, entrepreneur, consultant, and life coach Tim Ferriss argues that you don’t need a million dollars to have a millionaire lifestyle. We’ll describe each of his steps to creating this life, examine why some of his recommendations are particularly effective, and explore alternatives and counterarguments to other suggestions.
Ferriss says there are two ways non-millionaires attempt to live the retired millionaire lifestyle:
1. Postponers follow the conventional system of working for 30-40 years and then retiring. However, they use up the prime physical years of their life working, then either run out of money or lose the ability to enjoy their money while they’re traditionally retired.
(Shortform note: The average age of retirement is trending up, so postponers might find themselves delaying retirement even longer than expected. A Gallup poll from 2021 found that the average retirement age was 62—Gallup’s 2020 poll reported that the average retirement age was 61, and its 1991 poll reported the average retirement age was 57.)
2. Lifelong retirees live the millionaire lifestyle throughout their lives, alternating brief periods of work with lengthy pseudo-retirements. Their goal is to spend as little effort and time to make as much money as possible. The 4-Hour Workweek teaches you how to become a lifelong retiree by building a business that makes you enough money to live on, while not taking much of your time.
What if You Don’t Want Your Own Business?
Ferriss’s advice in this book is, essentially, to create a strong source of passive income so that you can afford to quit your day job. He suggests doing so by creating your own company and then automating it, but there are other methods for earning money without having to work continuously.
For example, in Rich Dad’s Cashflow Quadrant, Robert Kiyosaki says that financial independence comes from investing: In other words, putting your money into things that you expect to provide ongoing returns. Common examples of investments include retirement accounts, stocks, and rental properties. According to Kiyosaki, the goal of investing is to eventually live entirely on those returns so that you’re never forced to work again.
Ferriss says that you can achieve a millionaire lifestyle by following a four-step process, which he illustrates with the acronym DEAL: Define, Eliminate, Automate, Liberate. Each section of this guide will explore one of those four steps.
First, we’ll discuss how to decide what you want to do. In other words, if you were freed from your time-consuming obligations, what would you do with your time? Next, we’ll explore how you can streamline your schedule—figure out which time-consuming activities you can get rid of now to make your day job less onerous. Third, we’ll show how to use your newfound time to create your own business (what Ferriss calls your “muse”). It’ll be a lot of work at first, but eventually you can automate that business to provide passive income. Finally, once your business is earning enough money and no longer needs much input from you, you can retire and start living like a millionaire.
The first step in Ferriss’s process is to identify what you would do if you didn’t have to spend your time working. This step also involves identifying—and overcoming—the fears that hold you back from living your dreams.
To begin, picture what your new lifestyle will look like. Ferriss says you should imagine your dream lifestyle, then put those dreams on a timeline of three, six, or 12 months. He calls this process dreamlining.
First, list five items for each of the following: things you want to have, things you want to do, and things you want to be. Make these as specific as possible. For example, don’t say that you want to “travel”—write down the actual places you’d like to visit and what you want to do there. Once you have your 15 dreams written down, go back over the list and choose your top four.
(Shortform note: As Richard Rumelt explains in Good Strategy/Bad Strategy, having a limited number of clear and specific goals narrows your focus, which helps you direct your attention and resources effectively. If you have too many goals, or if your goals are too vague, then your efforts to reach those goals will be unfocused and ineffective—it would be like trying to get stronger by doing a dozen different exercises one time each. While Good Strategy/Bad Strategy is a business guide rather than a lifestyle guide, the principle of focusing your efforts applies whether you’re trying to build a business or improve your personal life.)
Next, calculate how much money you’d need per month in order to do all four things you chose, then increase that number by 30%. This will give you your target monthly income, with a built-in buffer against unexpected expenses.
How Much Do You Really Need?
Ferriss is urging you to live a balanced life: Instead of pushing to make as much money as possible, figure out how much money you need and how you’ll enjoy your life once you have it. Robin Sharma’s fable The Monk Who Sold His Ferrari illustrates the difference between a workaholic, money-obsessed lifestyle and a balanced one using the character Julian Mantle.
At the start of Sharma’s book, Julian is a high-profile lawyer who makes enormous amounts of money. However, he works so hard that he never takes the time to enjoy what he has, and the stress of his job leads to health problems that culminate in a heart attack.
Later in the story, Julian sells nearly all of his material possessions, trains and meditates with the (fictional) Sages of Sivana, and thereby finds inner peace and balance. In short, by giving up his obsession with wealth and professional success, Julian finds a much different and—according to Sharma—more meaningful kind of success: health and happiness.
While The 4-Hour Workweek is hardly urging you to sell everything you own and become a monk, Ferriss’s question is similar to Sharma’s: How much do you really need to be happy?
Finally, come up with three actionables for each dream: One you can do today, one you can do tomorrow, and one you can do the day after tomorrow. Do the first action for each of your dreams right now.
(Shortform note: Doing something today to start working toward your dreams can help overcome procrastination and boost your motivation. In The Subtle Art of Not Giving a F*ck, Mark Manson says that most people think motivation comes before action, but in reality motivation and action create a positive feedback loop. Manson believes that taking a step toward a goal—no matter how small that step is—inspires you to keep working.)
Now that you’ve figured out your dream lifestyle, it’s time to identify what might hold you back from achieving it. Ferriss says that most people hold themselves back out of fear of the unknown—they choose to be unhappy in a familiar situation rather than take a chance on an unfamiliar one.
If your fears are holding you back from making a change, Ferriss suggests examining them by asking yourself the following questions:
(Shortform note: Ferriss is advising us to gain control over our fears by examining them rationally. Therefore, it might be helpful to know why we experience fear in the first place. In Radical Acceptance, Tara Brach says that fear is a natural response that warns us of danger and prepares us to react. However, she adds that fear responses often go far beyond what’s necessary to keep us safe; we’re constantly tense and on guard, even when there’s no threat nearby. Her solution to fear is to recognize it, accept it as a natural but unnecessary feeling, and allow it to rise up and fade away in its own time—a practice called mindfulness.)
Ferriss’s second step to becoming a lifelong retiree is to eliminate things that take up time you’d rather use for something else. To free up time, reduce the time you spend on emails, calls, and meetings, and remove unimportant commitments from your schedule.
Most of us probably approach our chores and tasks by managing our time, prioritizing, and finding efficient ways to get things done. However, Ferriss says the best way to save time is to do only things that matter, and stop doing everything that doesn’t. To do this, keep two principles in mind: The 80/20 rule and Parkinson’s Law.
The 80/20 rule (the Pareto principle): This rule states that 80% of your results come from 20% of your effort. Therefore, you can greatly reduce your efforts without having a large negative impact on your outcomes. For example, imagine that you sell magazines, and that 80% of your orders come from 20% of your customers. If you completely ignored any customer who wasn’t in the top 20%, you would lose customers, but you’d still retain 80% of your orders. You’d also save a great deal of time, which you could use to do something more profitable.
(Shortform note: In The One Thing, Gary Keller suggests taking the Pareto principle to its extreme: Once you’ve whittled down your activities or ideas to the most important 20%, do it again to find the most important 20% of those activities. Repeat the process until you’re left with only the single most important activity you do: the titular “One Thing.”)
Parkinson’s Law: This law states that a task will take as much time as you give it; a corollary states that the more time you devote to a task, the more significant that task seems. For example, if you give yourself five days to write an essay, it’ll take you five days and feel extremely daunting; if you start two hours before the essay is due, you’ll get it done in two hours and feel like it was no big deal.
(Shortform note: Even if you understand Parkinson’s Law, it can be helpful to have someone else set the deadline for your work. Many people find it hard to set their own deadlines and keep themselves on task without external motivation.)
In order to stop doing things that aren’t important, apply both laws—only do the 20% of your tasks that give you the greatest return, and give yourself short deadlines for each of those tasks.
Ferriss says when you work a day job, there are three categories of work that take up your time unnecessarily: busywork, routine work, and work that requires input from someone else. He explains how to identify these time wasters and offers suggestions for minimizing the time you spend on them.
Busywork happens when people pile unimportant tasks onto you, either because they don’t want to handle those tasks themselves or because they want you to “look busy.” Therefore, Ferriss suggests avoiding busywork by limiting people’s access to you.
He says that people will try to access you in three ways, and he offers suggestions for limiting each:
Practice Rejection
Ferriss’s advice to say “no” to people who try to take up your time—to reject them—can be difficult to put into practice. In The Subtle Art of Not Giving a F*ck, Mark Manson says that people fear rejection—both being rejected and having to reject others—because rejection is unpleasant no matter which side of it you’re on. However, Manson argues that rejection is an important skill that everyone should practice; if you say “yes” to everyone and everything, you’ll end up stuck in situations that make you unhappy, and unhappiness is what you were trying to avoid in the first place.
This ties into Ferriss’s points about people taking up your time because modern culture (and especially modern workplaces) often set the unhealthy expectation that anyone can contact you at any time for anything and expect you to respond. Ferriss is urging you to reject those expectations and the people who set them; instead, set clear rules regarding when and why you’ll give people your time.
Routine work consists of repetitive and time-consuming tasks that need to be done. Ferriss suggests you handle these tasks by doing them all at once, at a scheduled time, instead of handling them as they come up.
(Shortform note: In The Effective Executive, Peter Drucker suggests dividing your time into blocks—making each block as large as possible within your schedule—and devoting each block to a particular task or type of task. In this case, you might create a time block of four or five hours within your weekly schedule, and devote that block entirely to these routine tasks. Drucker argues that by setting aside time and focusing your efforts in this way, you’ll handle tasks more effectively and reliably than if you try to handle tasks in smaller time increments.)
Work that requires someone else to get involved can eat up time for both you and the other party. Ferriss suggests you minimize these interruptions by establishing clear rules that empowers others to act without your input in as many situations as possible.
Empower Employees
Employees who need managerial approval for basic tasks (like taking returns) are disempowered—they can’t do anything beyond what they’re explicitly told or allowed to do. This situation is frustrating for the employees and inefficient for the company.
In The Leadership Challenge, leadership experts Barry Posner and James Kouzes say that there are two aspects to employee empowerment:
Self-determination: They can decide for themselves how to handle situations, rather than waiting on approval for anything even slightly out of the ordinary.
Accountability: With the power to make decisions comes responsibility for the outcomes of those decisions. That means that your employees should accept credit for their good decisions and accountability for bad ones. Note that “accountability” shouldn’t mean “punishment,” but rather responsibility for fixing whatever problems their decision caused.
If you’re the boss, try taking steps to empower your employees. If you’re an employee, try to empower yourself by making your own decisions and accepting responsibility for them; if that’s not possible, quit and seek a job that will let you do so.
Ferriss adds that you can save a great deal of time each week by transitioning to remote work. If you aren’t in a position to work remotely, or to make the previously mentioned changes to your workflow, Ferriss suggests quitting and looking for a less time-consuming job.
(Shortform note: Besides saving time by skipping the daily commute, Ferriss might not have anticipated other benefits of remote work, such as increased job satisfaction and increased productivity. The COVID-19 pandemic forced many companies to transition to remote work—and even when restrictions were lifted and workplaces opened back up, many employees still chose to work from home.)
Ferriss’s third step toward living the retired millionaire lifestyle is to build your own business and set it up to run itself with minimal input from you. That way, you’ll have a reliable source of income without having to spend much time working.
To begin earning without working, start a particular kind of business the author calls a “muse.” The goal of this business isn’t to make the world better or to generate a lot of money so you can sell the company in 20 years. The goal is simply to make steady, reliable money with as little time and effort as possible.
There are three steps to creating an automated business. Ferriss warns you not to start manufacturing anything until you’ve done all three steps:
Step 1: Brainstorm niche markets. Start by choosing a market where there will be demand for your product. Look for a small, niche market where you won’t have to compete with big companies (and their big advertising budgets). Choose a market that you’re personally familiar with and have a means of advertising to—for instance, through magazine or online ads. For example, if you’re an athlete, you might choose martial artists as your market.
(Shortform note: In Blue Ocean Strategy, the authors describe a niche market with little competition as the titular “blue ocean,” a patch of clear and open water where you don’t have to compete for limited resources (customers). Many companies enter “red oceans” instead—crowded markets with fierce competition—because they mistakenly believe that they have to go to where the demand is, instead of creating demand with an innovative new product or service. In other words, they smell the “blood in the water,” but they end up competing with larger and stronger companies.)
Step 2: Brainstorm products. Come up with possible products that would serve the niche markets you brainstormed above. Ferriss believes that your best bet is selling an information product—like a book or online course—that you create yourself. You don’t have to be an expert to create an information product, you just have to know more about the subject than your customers. Such products are ideal for a muse business because they’re cheap and fast to create, can sell at a large markup, and are hard to copy or knock-off.
Continuing the previous example, you might sell a prerecorded, martial arts-themed workout. Once you’ve filmed the workout, it’s cheap and easy to make copies of a DVD or distribute the video online.
Make Something Remarkable With the “Purple Cow” System
It’s not enough to make a product that you can reproduce cheaply—it also has to be something that people will be interested in. Marketing maven Seth Godin says there are so many products on the market today that a product has to be truly exceptional in some way (for example, in quality, price, or appearance) to attract customers. In Purple Cow, he offers a two-step system for creating these “purple cow” products—products that stand out from the crowd as much as a purple cow would stand out from a herd of plain brown cows:
Find the absolute edges of possibility. Brainstorm the most extreme ideas possible for your product. For example, if you’re making a martial arts DVD, you could hire a celebrity martial artist to help you make and advertise it.
Decide which edge of possibility you’ll go toward, and how close you can get to that edge. Study the list of ideas you just brainstormed, and choose the one that’s most likely to get the results you want—for example, giving away your DVD for free would be extreme and remarkable, but it wouldn't help you make money. Next, figure out how close you can get to achieving that idea; you probably couldn’t afford a UFC champion to help make your DVD, but it might be possible to get a retired fighter who’s looking for work.
Step 3: Test your product ideas. Study your competition to find a way to make your product different, then create an ad that highlights those differences. Next, reach out to your target market to see how many people are interested in your product. Finally, figure out if your product will be profitable by comparing your advertising budget to your potential income from selling to the interested people. If the numbers don’t add up in your favor, revise your product or your advertising (or both) and try again.
For example, many martial arts workout DVDs exist, but perhaps yours is the only one that includes specific exercises for increasing the power of your side kick. In that case, you’d make an ad emphasizing your unique exercises, then conduct some basic market research to see if enough people are interested in strengthening their side kicks to make this a worthwhile endeavor.
(Shortform note: There are many free and helpful tools that can help you do the market research Ferriss recommends here. For this issue, a particularly helpful tool is SurveyMonkey, which allows you to create a free account and send surveys to potential customers (also for free). This is a fast and convenient way to reach a large number of people.)
Once you’ve come up with a product and started your own business, make the switch from running your company to having your company run itself. Ferriss says that there are three phases of automation, based on sales:
Phase 1: You’ve shipped 0-50 products in total. According to Ferriss, in this first phase your business is too small and too new to automate. Therefore, you’ll be personally involved in every aspect of the business—including talking to customers, taking orders, packing, and shipping. To upgrade to Phase 2, use what you learn from chatting with customers to tweak your website and advertising, and look into getting a merchant account at a small bank so you’ll be ready for growth.
(Shortform note: While the ultimate goal is to make money, your first priority in this early stage should be learning what your customers want and what they’ll pay for. In The Lean Startup, Eric Reis says that one of the most common reasons new companies fail is because they overlook chances to learn and adapt their business practices—instead, they go into business with a single plan and refuse to deviate from it. If you want your business to grow to the point that it can support your retired millionaire lifestyle, it’s crucial to avoid that pitfall.)
Phase 2: You ship a few products per week. You’re still involved during this phase, but you can bring on a local fulfillment company. Ideally, look for a fulfillment house that’s willing to respond to order status inquiries from customers, won’t charge you setup fees or monthly minimums, offers net-30 terms (you have 30 days to pay after the invoice date), and has at least three good references.
Choosing a Fulfillment House
A fulfillment house (or fulfillment center) is a warehouse that handles packing and shipping orders for you. In a business where you’re selling physical products, choosing the right fulfillment house is key to keeping your company running smoothly. Forbes suggests a five-step process for finding the best fulfillment house for your business:
Gather your data. Before you approach fulfillment centers, prepare clear, organized, and comprehensive data about how many different products you have, how many of each you sell (on average), and how much each product weighs.
Determine the ideal location that’s reasonably close to where most of your products are going. For instance, if most of your business comes from the East Coast, you don’t want a company whose warehouses are on the West Coast (or vice versa).
Find centers that work in your niche. Some fulfillment houses specialize in products that might not be appropriate for your business. For instance, if you sell books or DVDs, don’t use a center that specializes in construction materials.
Analyze proposals. Once you have a list of fulfillment centers in the right area and the right market niche, examine their offers to determine which one is best for you. Consider not only the cost, but also the speed and quality of their fulfillment services.
Make your choice. Pick a fulfillment center that best meets your current needs. As your business grows and expands, you can always end this contract and switch to a larger company if need be.
Phase 3: You ship more than 20 products per week. Ferriss says that, at this point, you’re ready to remove yourself from the business almost completely. By the time you’re finished with this step, your business should require a few hours of your time each week at most. Furthermore, your company should be profitable enough that you’re ready to leave your day job and live on this income stream.
There are two steps to getting your business fully automated:
1. Research and sign up with a large fulfillment company, a credit card processor, and a call center (if you want to take phone orders). Ideally, choose companies that already work together to avoid any communication hiccups among them.
(Shortform note: As a counterpoint, Chris Guillebeau says in The $100 Startup that outsourcing your business in this way actually increases the amount of time you have to spend managing it, because you no longer have direct control over your products. While that’s still more efficient than trying to process and fulfill a large number of orders yourself, Ferriss’s idea that you can fully disengage from your business may not be realistic.)
2. Decrease interactions with customers and streamline your customer base. Customers buy your products, but they also take up your time. Therefore, Ferriss suggests focusing your efforts on customers who order frequently, don’t ask a lot of questions, and seldom return items. Send infrequent and time-consuming customers to your retailers, or just ignore them.
(Shortform note: In The $100 Startup, Guillebeau explains that there are two ways to grow your business: horizontally (expanding your customer base) and vertically (deepening your relationship with your existing customers). Dismissing infrequent or “annoying” customers seems counterintuitive when you’re trying to maximize profit, but Ferriss is really suggesting that you grow your business vertically: Focus on creating a small but loyal customer base that will spend a lot of money on your products while not demanding a lot of your time.)
Ferris’s final step to living the retired millionaire lifestyle is to achieve the dreams you defined in the first step. You’ll leave your day job, try out retirement, and settle into your new lifestyle.
Ferriss suggests you take several months to disconnect from your old lifestyle and settle into your new one by taking a “mini-retirement”. If possible, spend time in a different country—if you stay near your home, you run the risk of being drawn back into your old lifestyle.
Ferriss recommends taking this time to learn how to do nothing. Learn that it’s okay not to be busy and productive all the time. Make anonymous donations to break yourself of the need to be recognized and praised for what you do. Learn a new skill, take up a new hobby, or volunteer your time to stave off boredom and find new ways to feel fulfilled.
Finally, when you get back from your mini-retirement, look over your list of dreams and timelines. You might find that you’ve accomplished some of your dreams, or that some were less fun or fulfilling than you imagined. Then, update your dream list as needed.
A New Place for a New Life
Among other benefits, travel can help you reinvent your identity—which is exactly what Ferriss wants you to do with your new retired millionaire lifestyle. There are a few ways that traveling and living in another place can help change the way you see yourself and the world around you:
You’ll learn about different places and people, which might cause you to reevaluate some aspects of your own life and culture. You may find new ways of thinking about familiar concepts or discover cultural values that you’d like to adopt for yourself.
You’ll learn about yourself. Being in strange (and occasionally stressful) situations helps you discover more about who you are. For example, are you the type of person who eagerly drinks in a strange culture, or does it make you uncomfortable?
It provides a clean break with the past. Traveling can help you with major transitions or lifestyle changes—you might find yourself thinking in terms of “pre-travel” and “post-travel,” as if you’re a different person or living a different life.
Most people think they want to be millionaires so they can stop doing a job they don’t like, travel, buy nice cars, spend time with the people they care about, or practice a passion or vocation. However, there isn’t a direct relationship between money and lifestyle. If you have a lot of money but don’t have any control over your time or who you spend it with, you probably won’t be happy.
For example, an investment banker might work 80-hour weeks and make a lot of money but never have any time to use it. A freelancer might work 20 hours a week for a fifth of the banker’s salary, but while she might have less money, the money she does have has more practical value. She’ll be able to use it to do whatever she wants, with whomever she wants, and whenever and wherever she wants (4Ws). You don’t need to be a millionaire to live your dreams—you only need the amount of money they require.
Paradoxically, you can increase your income by decreasing whatever it is you’re doing now. Day jobs and conventional businesses are set up to funnel everyone through the traditional lifestyle—work for three or four decades straight, and then retire for the rest of the years you have left. This is an uncomfortable, inefficient system, and Tim Ferriss challenges it in The 4-Hour Workweek. The book lays out a four-step process for starting a “muse” business that makes you enough money to escape the 40-hour workweek of the rat race. Throughout this summary, this end goal will be referred to as the 4HWW lifestyle. (Shortform note: The 4-Hour Workweek offers suggestions on how to significantly reduce your working hours. The goal doesn’t appear to be to work exactly four hours every week. Ferriss himself works more than this.)
The four steps to achieving the 4HWW lifestyle are define, eliminate, automate, liberate (DEAL). Part 1 will address step D: Define Your Dreams. The other parts will be addressed in subsequent chapters.
(Shortform note: The original edition of this book was written in 2007. This expanded and updated edition was published in 2009 and includes new content such as excerpts from the author’s blog, resource recommendations, and many case studies.)
There are two types of people, Deferrers (D), and the New Rich (NR). Type D people follow cultural conventions. They work for 30-40 years of their life and then retire. Type NR people reject these norms. Instead, they alternate work and periods of rest. The 4HWW lifestyle is a specific version of the New Rich lifestyle.
There are several differences between Deferrers and the New Rich:
For example, Olympic skier Dale Begg-Smith is a member of the New Rich. When he was thirteen, he started an IT company with his brother to finance his ski training. Sometimes, he had to miss practices to help run the business, but in spite of his imperfect attendance, Begg-Smith was just as good a skier as his teammates. However, because his coach succumbed to the status quo, he forced Begg-Smith to choose between the team and his business. Begg-Smith moved to Australia (their team had a more flexible coach) and kept working at both his business and his skiing. At the next Olympics, he won gold in mogul freestyle.
Why does everyone follow the conventions and “rules” of life when they push us towards an inefficient system (the rat race) and something (deferred retirement) that isn’t actually going to make us happy? If the “way it’s done” isn’t working for you, do it differently. For example, for a long time, high-jumpers jumped over the bar using a straddle technique. Dick Fosbury came up with a new technique of going backwards over the bar. Using this technique, he won the event in the 1968 Olympics. The technique was effective, and eventually, all high-jumpers started doing it. The 4HWW lifestyle may currently be uncommon, but that’s no reflection on its value or effectiveness.
Note, however, that you can take this concept too far. Being different just for the sake of being different isn’t useful. For example, only wearing clothes that are different shades of red isn’t going to achieve anything. You want to look for a new solution only when the current practice isn’t working.
There are ten rules for breaking the rules:
Following these rules will help you adopt the New Rich lifestyle.
The main thing that stops people from living the 4HWW lifestyle is fear. Fear of failure and the unknown are paralyzing, and facing these fears is so intimidating that most people would rather be unhappy.
Additionally, there’s a less-recognizable subset of fear of the unknown that affects many of us—optimistic denial. If your job isn’t absolutely awful, then you pretend it’ll get better or pretend you’ll get a raise and the money will make everything better. You’ll keep on pretending instead of doing something life-changing that would actually make you happier. To figure out if you’ve fallen prey to optimistic denial, think back to a month or a year ago. Are things better now than they were then? If they’re not, there’s no reason to expect them to improve over another year.
The best way to work through your fears is to define them, or “fear-set.” Once you have a better handle on what exactly you’re worried about, it becomes less frightening. Also, once you’ve quantified your fears into specific scenarios, you’ll be able to see ways to avoid negative consequences.
There are six questions to ask yourself when fear-setting. They aren’t simply a mental exercise; actually write out your answers. Go through the questionnaire twice, once while thinking of something you’d like to do, and the second time while thinking about quitting your job. The questions are:
1. What is the worst-case scenario? On a scale of 1-10, one being the lowest, what would be the permanent cost of your actions? How likely is it that the very worst would happen?
2. If the worst did happen, how would you fix it? Consider how you’d get back to where you were before you changed anything. How would you get your finances back on track? Even a temporary fix is a good start.
3. What are the more likely scenarios, and what are their outcomes? Consider both internal (developing your character) and external. On a scale of 1-10, what is the permanent cost of the actions? How likely is it that you would get a positive outcome?
4. What aren’t you doing because you’re scared? Usually, the things that you’re scared of are the things that are the most important to do. (The author believes that one measure for success is the number of uncomfortable conversations we’ve had.) Accept that the worst-case scenario is a possibility, but risk it anyway.
5. What are you losing by not acting? The previous four questions focused on the downsides of doing things; now focus on the downsides of not doing them. Later in life, will you consider this inactive time wasted? Inaction can be the worst-case scenario, because it can create a permanent (once your lifetime’s gone, it’s gone) negative outcome (being unhappy).
6. Why aren’t you acting? There’s a good chance your go-to answer is timing, which isn’t a good reason (recall the nine rules to breaking the rules). Probably, you’re not acting because you’re scared to.
Once we articulate and define our fears, they’re less frightening.
Think of something you want to do but are scared to. If you do this thing, what’s the worst possible outcome?
What are the consequences and how permanent are they? How likely is this worst-case scenario?
If the worst-case scenario did happen, how would you recover? Think of ways to fix all the consequences you listed above.
The worst-case scenario is never the most likely scenario. What are some of the other possible scenarios? What are their positive and negative outcomes?
To fully embrace the 4HWW lifestyle, you need to find something to do with all your upcoming free time. When brainstorming ideas, don’t ask yourself what you want or what your goals are. Instead, ask yourself what you find exciting. The first two questions are too vague and don’t steer you toward the right course of action. You probably want something, or want to achieve a goal, because it will make you happy. But happiness is a vague concept—at different times in your life happiness might be as simple as having a good meal. After a while, happiness can morph into boredom, and boredom is even worse than failure. Excitement is a much more precise objective.
Don’t restrict yourself to what seems reasonable or realistic. Interestingly, it’s actually easier to do really big things than moderate things. First, there’s less competition. Most people don’t think they can do big things, so they aim lower, creating a lot of competition in the low arenas. Second, a big goal with a big payoff gives you more energy and adrenaline. Small goals aren’t very exciting, so you’re not as inclined to put in enormous effort.
For example, when the author gave a lecture at Princeton, he challenged the students to contact three very famous people (such as George Bush) and get them to reply to one of three questions. Whoever got the most impressive result would win a round-trip ticket to anywhere in the world. The challenge seemed so difficult that in spite of the excellent prize, not a single student even tried. If someone had gotten even a half-baked response, they would have won by default.
The next time the author gave a lecture, he told the students about the results of the first challenge. This time, some of the students tried to contact the famous people, and plenty of them received responses.
If we don’t know what we want, we can fall into two traps: adhering to conventions, or trying to buy certainty.
The first trap is adhering to conventions. If we haven’t come up with an alternative to a conventional lifestyle, it’s hard to avoid it. As children, we’re allowed to dream, but as we grow up, people tell us to be practical and realistic. We’re told we should make choices that will allow us to live the conventional lifestyle of holding down a good job, starting a family, and buying a sports car. But you don’t want to be the kind of person who settles for boredom and the status quo. Becoming this kind of person should be scarier than anything else you might do.
The second trap catches us when we don’t know what we want. Until we figure it out, we decide to work until we have enough money to do anything and everything. If you haven’t decided on a use for your money, you’ll keep trying to get more so that when you do figure out what you want, you’ll have enough. You’re trying to use money to buy certainty. For example, the author’s company, BrainQUICKEN LLC, reached a point where it could run itself without any input for him. However, because he hadn’t come up with anything to do with his time, he kept working even though he didn’t need to.
“Dreamlining” is a method for attaching timelines to dreams. It’s similar to goal-setting but differs in these ways:
There are seven steps to dreamlining:
1. Brainstorm dreams. Create two lists, one for a six-month timeline, one for 12-month. (The author sets even shorter timelines for himself, from three to six months, because the farther you try to project into the future, the more likely you are to procrastinate.) List up to five things you want to have, five you want to be, and five you want to do in each of those time periods. Don’t worry about how you would get any of these things; just focus on what you want. And be honest—don’t put things that would make you look good that you don’t actually want (for example, discovering the cure for cancer). If you get stuck:
2. Transform the “to be” list into to-dos by finding a specific action that would demonstrate what you’ve become.
3. Prioritize your dreams. On the six-month list, choose your four most important and exciting dreams from all the columns. Do the same on the 12-month list.
4. Do some math: figure out the monthly cost of each of the four most important dreams (cost for classes, rent, and so on.). Think of things in terms of a monthly cost rather than a total cost. You can use the calculator on the author’s website to help.
5. Do some more math: calculate your “Target Monthly Income (TMI).” Add up the monthly cost for each of your four dreams and add an extra 30% for safety or savings. This number is your TMI. You can also calculate your daily income. Probably, the amount is lower than you think, and it’ll lower further as you choose more things to do rather than things to have.
6. Come up with three steps to achieve each of your four dreams. The three steps don’t have to get you all the way to the goal; they’re simply designed to get you making progress. Your steps should be simple (doable in less than 5 minutes) and clearly defined. Step 1 should be doable right now, step 2, tomorrow, and step 3, the day after. The “tomorrow” and “next day” actions should be completed before 11 am on those days.
7. Do all the first steps right now. If you don’t do this step right now, you’ll put it off, and once you’ve done that, you’ll never do it. Use guilt to make yourself take steps—if you set a meeting with someone, you’ll feel bad about canceling it.
The first step of dreamlining is to brainstorm.
What are some things you’ve always wanted to have?
What are some things you’ve always wanted to do?
What are some things you’ve always wanted to be?
What are some specific things that would demonstrate that you’ve become what you want to be? For example, if you want to be strong, you could specifically want to be capable of doing 30 push-ups in a row.
Choose your top four dreams. Write down the first step that you will do to achieve them. You should do this first step today.
Part 1 covered step D (Define) of the DEAL process and Part 2 will cover step E: Eliminate activities that waste your time. Step E explains how to start making the time to achieve the dreamlines you set in step D.
The 4HWW lifestyle requires you to reevaluate your ideas about time. First, note that unproductive busyness is bad. Busyness takes up a lot of time and it’s a form of procrastination. Doing unimportant things gets in the way of doing things that would actually have a high impact but are uncomfortable.
Second, abandon time management. Time management implies that you have so many things to do in a limited amount of time that you have to tetris things into your schedule. This isn’t a situation you want to be in.
Instead of being so busy you have to manage your time, decrease the number of things you have to do and decrease the amount of time you spend on them. If you want to get more done, you have to do less.
Effectiveness is doing important things that help you achieve results. Efficiency is doing things (regardless of whether or not they’re important) in the fastest way possible.
Even though effectiveness is more productive, the conventional workforce focuses on efficiency because it’s easier to measure. Efficiency can be useful, but only when applied to things that actually matter. Remember that how long you spend doing something, or how well you do it, doesn’t have any effect on its importance.
Italian economist Pareto discovered that, generally, 80% of results are generated by 20% of the effort. (In some cases the ratio can skew even further to up to 99/1.) This rule applies both positively and negatively. For example, the top 20% of your friends probably generate 80% of your social happiness. Your bottom 20% probably generate 80% of your problems. Therefore, you can use this rule to both win yourself time and decrease your problems:
For example, when the author learned about the 80/20 rule, he evaluated his company BrainQUICKEN LLC. Five out of his 120 customers generated 95% of his revenue and they always ordered regularly and professionally. The other 115 customers that generated only 5% of his revenue also generated nearly all his problems.
Realizing this, Ferriss immediately stopped approaching most of his unproductive customers. If they ordered, he’d fill the order, but he wouldn’t contact them. There were two rude companies who did contribute enough to his revenue to be mathematically worth pursuing, but they weren’t worth the toll on his mental health. He contacted both of them to say that if they couldn’t be polite, he wouldn’t serve them anymore. He didn’t really need their money; he just thought he did because workforce conventions told him so. One customer left, and the other changed its behavior.
Finally, Ferriss studied his top five customers and used the commonalities between them to find other, similar customers. He ended up with eight top customers that ordered regularly without him needing to intervene. His income went up and his hours went down.
Parkinson’s Law states that the amount of time you have for a project will dictate how important and difficult you think it is. You’ll use all the time allowed, even if the project doesn’t actually require it. In addition, you might actually do a worse job on the project than if you had less time, because the time pressure forces you to focus.
Employees fall prey to Parkinson’s law all the time. It’s not necessarily their fault—because they have to work 9-5, they find things to do to take up all this time.
Entrepreneurs, however, don’t have a set schedule, so if they’re using more time than they need, or giving themselves extravagant deadlines, they have no excuse. They’re either copying the status quo or caught up in a bad habit.
To gain yourself the most time, you want to employ both the 80/20 rule and Parkinson’s law. Only do important tasks, and give yourself short deadlines to achieve them.
For example, Charney is a technology salesman with young children. To win himself more time to spend with his family, he followed the 80/20 rule. Three times a day he asked himself if he was being productive or just busy. If he was only busy, he stopped doing whatever he was doing and moved on to a task that was actually important. To apply Parkinson’s law, he took Mondays and Fridays off to cut down on the amount of time he had to get his work done. After five weeks, he was working 18 hours a week and being four times as productive as he had been working 40 hours.
There are several questions to ask yourself when learning to apply the 80/20 rule and Parkinson’s law to your job and life. While answering, keep in mind that you want to negatively affect your income as little as possible.
Reading and informing yourself takes up a lot of time. If you want more free time, you need to drastically cut down on the amount of time you spend consuming information. Do this by ignoring anything that’s not important or that you can’t do anything about. For example, the author only reads newspaper headlines as he walks to lunch. He spends only four hours a month reading Inc. magazine and about ⅓ of Response magazine. He assumes that if anything really important happens that he has to do something about, he’ll hear about it from someone. In five years, his “ignorance” has never caused a problem.
The key to this ignorance is that it’s selective. Ignore whatever the world throws at you. When you do need information, seek it out, ideally in a more digestible format than the original. For example, Ferriss learned enough to vote in the last federal election by doing the following:
Not only was this an efficient way to get all this information, it was also free.
If you don’t have friends who can advise you on a particular topic:
There are three steps to starting and maintaining selective ignorance:
1. Ignore all media for one week to demonstrate to yourself that you don’t need to be spending time on it. No news, magazines, books, audiobooks, radio, or TV. No going on the internet unless you absolutely need to complete a task for a particular day (no advance research). You can still listen to as much music as you want, watch an hour of TV for fun, and read fiction for an hour. (And keep reading The 4-Hour Workweek.) Things to keep in mind while doing this step:
2. Make sure that, if you’re going to consume information, you’re going to use it immediately, and on something important. If you’re not going to use it immediately, you’ll forget it by the time you need it, and have to relearn it. Learn things only as you need to know them.
3. Don’t finish things if they’re not helpful. If you start reading a book and discover it’s boring or unhelpful, stop. You’ll save yourself time.
Follow these steps to increase your reading speed in just a few minutes:
If you want to figure out how fast you read a particular book, calculate the average words per line using ten lines. To get average words per page, multiply the average words per line by the number of lines per page. Time how many pages you can read in a minute, and then multiply the page count by the average number of words per page.
Step E (Eliminate) of the DEAL process involves learning to ignore any unimportant or unactionable information.
Think of the last time you needed to learn something. For example, perhaps you were trying to decide which kind of credit card to sign up for. How did you learn? How long did it take you?
Now, think of something new you’d like to learn. Who do you know who could give you an overview of the topic? If you don’t personally know anyone knowledgeable in the subject, who could you get in touch with? Consider authors of books on the subject, industry experts, and so on.
How long do you think it would take you to learn using this second method?
An interruption is something that prevents you from finishing a task all in one go. The easiest way to deal with interruptions is to come up with a set of rules for yourself and others. Once you’ve set a precedent for not letting people waste your time and everyone understands the rules, you have a self-enforcing system that you never need to spend brain power on again. Your system will not only save you time—it’ll train everyone involved to be more efficient.
This chapter will cover three types of interruptions: those that waste time, those that take time, and those that require outside help or approval.
Interruptions that waste time aren’t important and can be completely ignored. Often, the time-wasting interruption is a person wanting to talk to you via email, phone, or in person. To deal with these interruptions, limit people’s access to you, and when you do allow people to access you, make sure the interaction is as efficient and action-focused as possible. Make it known that email is your preferred method of communication, then phone, then as a last resort, in person. There are some steps to streamlining each method of communication:
Email is the biggest distraction and interruption of modern times. To control how people access you via email:
To control how people access you via phone:
You’ll probably offend some people as you cut down on in-person communication, even if you do it politely, but once people realize that it’s your general policy, they’ll accept it. To control how people access you in person:
Things that take up time are things that need to be done but distract you from important, high-impact tasks. For example, returning phone calls and customer service need to be done but aren’t high-impact.
The most effective way to handle these types of interruptions is to “batch” them—save them all up for a certain time and do them all at once. Batching saves time because every task you do requires set-up time. It usually doesn’t take any more time to set-up to do a task once than it does to do it multiple times. For example, if you’re making cookies, you have to preheat the oven and get the ingredients out of the pantry. You have to do both of these things regardless of whether you’re making one cookie or six dozen. If it takes you ten minutes to preheat the oven and get out the ingredients, and you make one cookie per day for five days, that’s 50 minutes of prep time. If you make five cookies once, that’s only ten minutes of prep time.
In addition to the start-up time required to do an interruption, it can take up to 45 minutes to get back to full productivity on your original task.
Here’s how to calculate the time-saving effects of batching:
Interruptions that require outside help or approval waste the time of both the person who needs help and the approver. For example, getting manager approval to process a refund requires an employee to spend time tracking down a manager and waiting for them to arrive. The manager loses time because she has to stop whatever she’s doing to take care of the refund. These interruptions are usually due to micromanaging.
If you’re an employee, you need access to all the relevant information and the authority to make decisions. To get this, talk to your boss, emphasizing that you want more decision-making power so you can be more productive and interrupt her less. Come up with rules, such as if a fix costs less than $20, you can approve it yourself. Suggest a trial period, with your boss reviewing your decisions. Ask if it’s reasonable—it’s hard for people to say things are unreasonable.
If you’re an entrepreneur, you need to give your workers as much information and decision-making powers as possible. When you give people responsibility and trust them, their intelligence will exceed your expectations. And even if you could do something better yourself than someone else could, that doesn’t mean it’s a good use of your time.
Customer service in particular tends to be full of interruptions like this. For example, the author had a company called BrainQUICKEN that sold dietary supplements. He outsourced customer service but still wanted to handle product-related questions personally. This wasn’t scalable—he quickly got way more email than he could handle and had to limit advertising and shipments because he wouldn’t be able to keep up. Most of his emails weren't even about products; instead, they were questions from customer service reps about what they were allowed to do. All the situations were different so the author couldn’t just write a manual, and he didn’t know enough about customer service to do so anyway.
To deal with this, the author made a rule—he decided that when reps came across problems that would cost less than $100 to fix, they should use their judgement to keep the customer happy and fix the problem however they liked. In addition to cutting down his emails, this rule had the advantage of levering the knowledge of the customer service rep. He kept an eye on the numbers and learned that it cost less than $20 to fix most problems. In the first month, he estimated that overall, his reps spent about $200 more than they would have if he’d directed all their actions. $200 was worth the 100 hours of his own time he saved. Additionally, this approach resulted in customers receiving much faster service. Returns dropped.
People are sometimes reluctant to embrace the above approaches because they’re scared of missing something important. There are a few reasons not to worry about this:
“Batching” involves saving up a bunch of routine tasks to do all at once.
What is a routine task that you have to do every week? You can choose either a personal or professional task.
How much time does it take you to set up each time you do the task above? Multiply this number by four to get the approximate amount of time you spend on set-up per month.
If you did the task only once a month, you would only have to spend the set-up time once instead of four times. How much time would you save if you batched this activity?
A conventional 9-5 job takes up a lot of time. If you want more free time—and you’ll need free time to start your “muse” business in step A (Automate)—you’re going to have to reduce the hours you spend on your rat race job.
If you’re an employee, you’ll do this by transitioning to remote work. When you’re working remotely, no one knows how long you actually spend working; they only know if you finish all your work. Now that you know how to eliminate, you’ll be able to do your job in far less than eight hours a day.
If you’re an entrepreneur and you control your own schedule, no one’s holding you to 40 hours a week except yourself. However, entrepreneurs can still benefit from learning how to work remotely so that they can travel while working.
This tends to be the hardest part of the process for employees. You take control and have potentially uncomfortable conversations.
To transition to remote work, first you’re going to figure out how to do it, and then you’re going to convince your boss to let you.
There are some logistics to iron out when transitioning to remote work:
There are two methods employees can use to get out of the office: the five-step method and the hourglass method.
There is a five-step method to convincing your boss to let you work remotely.
1. Make yourself more valuable. You can do this by asking your company to pay to train you, so that if you quit, they lose that investment.
2. Prove that you’re more productive outside the office. Call in sick for two days and work from home. (Choose Tuesday and Wednesday so it doesn’t look like you’re pretending to be ill to get a long weekend.) Be twice as productive as you are in the office and keep a record of what you get done. Additionally, use this time to solve any potential remote work logistical problems such as technical issues.
3. Spin remote work to be a benefit for your company. Note what and how much you got done while you were remote and why.
4. Ask for a trial period of one day per week for two weeks. Plan what you’re going to say, but ensure you don’t come off as too formal, or your boss might worry that you want a permanent change. Tell your boss how much more productive you were when you were “sick,” answer any of their questions about logistics, and ask for two remote days a week so if they say no you can counter with one. Start with this small ask because asking to go fully remote is such a big change your boss might refuse. Additionally, a trial also gives you a chance to practice working remotely, so that when you do make the changeover, it’s seamless.
5. Increase your trial period until it becomes the norm. Be exceptionally productive on your remote days. You can even be less productive on your in-house days to make the difference more obvious. Every time you ask for an incremental increase in remote work, stress the benefits to the company of you working remotely. Address any concerns and reassure your boss that the move is reversible. Keep requesting trials until you get to full-time remote. Ideally, this will be at a time when your company is in the middle of something they need you for.
Instead of working up to full-time remote like the five-step method, in the hourglass method, you start by going fully remote, have a brief trial period of combo remote/in-house, and then go back to remote. Here are the steps:
If you’re an employee and can’t swing remote work, you’ll have to quit or get yourself fired, or else you’ll never be able to work fewer than 40 hours a week. (Getting fired is sometimes better—then you might end up with severance or unemployment benefits.) See Chapter 12 for some advice on how to leave your job.
(Shortform note: Chapter 8 of this summary corresponds to the book’s Chapter 12.)
There are two methods for transitioning to remote work: the five-step method and the hourglass method.
What are some logistical problems you might encounter if you transitioned to remote work? Are there parts of your job that would be hard to do remotely?
How important are they? How would you do them remotely if you had to?
How could you make yourself more valuable to your boss and company? Think of an event or training sessions that you could ask to attend.
Which of the two methods do you think would work better for you? Why? Remember that the five-step method involves slowly transitioning to remote work, and the hourglass method involves going fully remote, then pulling back to part-time trial remote, then slowly transitioning back to fully remote.
Part 3 will cover step A: Automate Time-Consuming Activities of the DEAL process. Step A, like step E (Eliminate), explains how to make the time to achieve the dreamlines you set in step D (Define). This step tends to be the most difficult part of the process for entrepreneurs because they tend to like having control, and in this step, they have to give it up.
To achieve the 4HWW lifestyle, find a way to replace yourself. Almost anything and everything you do could be done by someone else.
The first step to automation is to hire a virtual assistant (VA). You should do this regardless of whether you’re an employee or entrepreneur, and even if you have enough time to do everything yourself. There are a few reasons:
People hesitate to pay other people to do things they can do themselves, especially if it’s more economical to do it themselves. However, you’re not trying to save money in this chapter, you’re trying to save time.
Since VAs work remotely, you can hire someone from anywhere in the world. There are advantages and disadvantages to hiring someone local vs. someone farther flung. Consider these four factors when choosing a VA:
The best way to choose a VA is to trial people you’re interested in. Assign a one-off project or a small recurring task, ideally something daily. To work on your communication skills, choose non-native English-speaking VAs initially, but use local help for any language-intensive tasks.
Regardless of whether you’re an employee or an entrepreneur, you can assign your VA both personal and professional tasks.
Regarding personal tasks: your non-working time isn’t free if you have other non-work obligations, and VAs provide all sorts of personal services ranging from voicemail transcription, to organizing your child’s birthday, to even emailing your parents for you.
Regarding professional tasks: VAs can help you out with anything that can be done remotely. If you’re an employee, as long as you don’t give the VA sensitive or confidential parts of your job, the author says there’s no legal or ethical reason to tell your boss you’re employing someone to do parts of your job for you. (Shortform note: You may want to check your employee contract and/or handbook before doing this.)
To brainstorm tasks you might be able to delegate, consider:
Assume the best of people—believe that they can do more than grunt work. But if a VA doesn’t do something well, remember that you can always take it back yourself.
Once you’ve come up with some possibly delegatable tasks, test them against the following criteria:
When deciding whether you should eliminate, delegate, or do a task yourself, consider the following:
It’s important to clearly communicate tasks to your VA. If you’re not used to giving directions, assume most initial problems are your fault because you failed to explain tasks well. When you write to your VA to assign them a task, do all of the following as part of your initial email:
Problems with privacy or security are rare. In the only case of information abuse the author found while researching the book, the problem was freelance help that a very busy US-based VA contracted at the last minute.
Established VA firms such as Brickwork have many security measures including nondisclosure agreements, encryption, and secure connections—probably a lot more than you have on your own computer.
Follow these rules to avoid problems:
If you’ve followed the rules above, you’ll find that if you do get hit by identity or information theft, they’re not that bad and you can recover.
You can save yourself a lot of time by hiring a VA to do tasks for you.
What are some specific, time-consuming, remote-friendly tasks that you do in your personal or professional life?
How could you delegate the above tasks to a VA? Think about how you would phrase your instructions.
For the above tasks, what timelines you would give, and what kinds of rules you would set up?
What are some tasks that you really hate doing or that make you uncomfortable?
Could you delegate these uncomfortable tasks to a VA? Think of ways you could make the task specific and remote-friendly. For example, if you hate mowing the lawn because you’re allergic to grass, you could ask your VA to set you up with an affordable landscaping service.
To get the time and money to have a lifestyle you want, you don’t want to run a business, you want to own a business. You want the business to run itself. The author calls this type of self-sustaining business your “muse.” Note—you’re not trying to create a business that will make a difference to the world or that you can sell for a lot of money. You’re just trying to build something that makes you money without taking up your time.
Muses must:
There are three steps to choosing a muse. Don’t manufacture anything until you’ve completed all three steps.
It’s best to choose a market that you’re a part of or have a good understanding of so you know its needs.
It’s important to choose a niche market specifically, because if your market is too broad, there’s a lot of competition and a lot of free information, and it’s expensive to advertise to such a big group. For example, the student athlete market is large and scattered. The author chose to focus on athletes in specific sports, martial artists and powerlifters.
It’s also important that there’s a way for you to reach your market. You’re going to be advertising your product in magazines, so do some research:
Before moving on to the next step, confirm your chosen market meets the following criteria:
There are two sub-steps to step #2: brainstorm product ideas and then evaluate them against criteria.
There are three options for finding products and the last option is the one you’re probably going to want to use.
Reselling is the easiest of the three options, and it’s quick to set up, but it comes with some disadvantages:
However, reselling is a great option for certain products:
Shortform Extended Example—Edgar: Edgar is an architect. He wants to start a muse to resell hats made in Amsterdam. Edgar’s story will play out through the rest of this summary.
There are two ways to approach licensing. The first is to invent a product and then charge anyone who wants to sell it. Usually, you earn 3-10% of the wholesale price.
The second is to find someone who’s invented something and the license it from them. You have to give the inventor that 3-10% of the wholesale price, which leaves you with 90-97%.
Licensing involves a lot of legal work and contract negotiation, so the author doesn’t recommend it for your first muse.
A new product is the best option for most people. When brainstorming product ideas, keep in mind setup costs, minimum orders, and unit costs. Technology tends to have high costs in these areas so you probably want to avoid it.
There are three ways to create a product, and the third is usually the best:
Way #1: Find a generic product that you can tweak for a specific market.
Get a manufacturer to create the stock product and then put your own custom label on it. (This is called “private labeling.”)
Way #2: Come up with a brand-new physical product.
You don’t have to handle all the creation personally. If you come up with an idea, you can hire someone else to do a prototype. (Recall the advantages of outsourcing from Chapter 9).
Way #3: Create an information product.
Information products are ideal for several reasons: they can have a 20-50 times markup and they’re cheap and fast to make. Also, they’re a lot of work to imitate. It’s easier to get around a patent than paraphrase a whole information product. (It usually only takes two to four months before exact duplicates of infomercial products start showing up.)
You might think that you need to know a lot about a subject if you’re going to sell an information product. You don’t. You only need to know more about the subject than whoever’s buying the product. And you don’t need to convince everyone to buy the product, only enough people to make you enough money to get the Target Monthly Income required for a dreamline. The author calls this amount of customers the “minimal customer base.” It’s smaller than you might think—if your dreamline requires $2,000 and your product costs $200, you only need 10 people to buy it to make $2,000 (not taking into account business costs). If the readership of the magazine you’re advertising in is 15,000, your chances of attracting the minimal customer base are pretty good.
Additionally, there’s no agreed-upon definition of an “expert.” Therefore, there’s no definitive way to decide who is or isn’t an expert; all anyone can do is get others to see them as an expert. Therefore, building yourself “expert status” isn’t deception, according to the author. It’s “superior positioning.” You can achieve expert status in four weeks by doing the following:
Here are some ideas for creating an information product. You can personally create the content (become an expert), use public domain content (free content anyone can use), or get help from an expert. To hit a price of $50-200, come up with a combination of formats, such as six CDs and a transcription.
Shortform Extended Example—Devi: Devi is an entrepreneur. She’s a fitness instructor and dragon boater. She wants to sell a workout program specifically for dragon boaters. Devi’s story will play out throughout the rest of the summary.
Your product must meet the following criteria:
Shortform Extended Example—Edgar: Edgar is the architect who wants to resell hats made in Amsterdam. He prices the hats at $50 each. His start-up costs are buying the hats wholesale and shipping, which is about $15 a hat. This isn’t the ideal markup, but he decides to go ahead with it.
Shortform Extended Example—Devi: Devi is the fitness instructor who wants to sell a dragon boating workout. She chooses to format her product as two DVDs and a manual. She prices the package at $100. Her start-up costs will include making the DVD and getting it duplicated.
Even people who have a lot of experience in specific industries or good intuition may not be able to foresee what’s going to be successful. Focus groups aren’t any better—it’s easy to say you’d buy something if you don’t actually have to buy it. In this step, you’re going to test your product before spending a lot of money to manufacture it.
There are four sub-steps to step three:
Your product is going to have to compete against other similar products. To outcompete them, you must come up with a way to make your version different and better than your competitors’. Follow these instructions to research your competition:
Shortform Extended Example—Edgar: Edgar’s competitors offer many hats in addition to Amsterdam hats, so it’s hard to find the Amsterdam hat specifically on their websites. He also learns some of the hats are made in the US (so they’re not really Amsterdam hats), and the ones that are made in Amsterdam take two to four weeks to ship.
Shortform Extended Example—Devi: Devi learns that no one else has ever made a fitness for dragon boating DVD.
Create ads for your product that include differences between your and your competitors’ versions of the product, testimonials, and photos. Look at your competitors’ ads and ads you’ve been drawn in by as examples.
Shortform Extended Example—Edgar: Edgar gets testimonials by letting his friends try on his hat, and gets photos and ad samples from the hat wholesaler
Shortform Extended Example—Devi: Devi asks her current clients for testimonials
You’re going to test your product by advertising it and estimating how many people will buy it. You’ll use direct response advertising, so that you can track when an ad leads to a sale. This chapter gives two options for testing your product. You can do both if you like:
Option #1: Offer the product on a short eBay auction. This should cost less than $5.
Option #2: Create a website and use it to start “selling” your product. Because you don’t actually have a product, you can’t actually sell it to anyone, but you can set up an ordering system that looks like it works. This is legal as long as you don’t collect billing information. To make full use of this option:
Based on the test results, assess whether or not your product will be profitable. To keep the math simple, compare how much you spent on ads to how much you would have made if you’d actually sold the product. If you’re not happy with the results, make changes until you have a product and muse you’re happy with.
Shortform Extended Example—Edgar: Edgar spent $100 on ads and made $150. His analytics told him that lots of people viewed his site, but most people left it after viewing the pricing. He thought about what he could change. Instead of dropping the price, he offered a guarantee—if the customers weren’t 100% satisfied with the hats, he’d give them their money back. He retested and the change increased his sales enough to make the product viable.
Shortform Extended Example—Devi: Devi spent $150 on ads and had 20 people sign up for her newsletter. She assumed 50% of those people would buy the DVD, giving ten customers. If she makes $100 on each DVD, she’s made over $1000.
When people have too many choices, they can become paralyzed by indecision and do nothing. If your product has too many options, people might get overwhelmed while shopping and not buy anything. Options also complicate manufacturing and customer service. If a customer needs options, send them to a reseller. If they’re buying from you, do the following and you can reduce service overhead by a fifth to four-fifths:
(Shortform note: The 4-Hour Workweek covers the three-step process over two chapters. We have consolidated the content into a single chapter for clarity and concision. The “Limiting Options” section was originally in Chapter 11.)
A “muse” is a self-sustaining business that sells a product.
The first step to finding your muse is coming up with a niche market you could sell a product to. What markets are you a part of? Consider your job and hobbies. How could you narrow these markets to come up with a niche market?
The second step is to brainstorm products you could sell to your market. Since you’re part of your market, what products do you already own? What products do you wish existed? What kind of information product could you create?
The third step is to test your product by advertising and “selling” it. What would you put in an ad for your product? What makes it different from existing products? Would you offer some sort of money-back guarantee?
From the moment you start planning your muse, imagine how it’s going to run itself without you. Your systems need to be scalable, i.e., when your business starts getting more orders, it must be able to handle the demand. Most entrepreneurs start out by doing most of the work themselves, which is what you’re going to do, too, but the key to automation is knowing when to tap out.
There are three phases of automation, determined by the amount of product shipped:
Initially, you’ll do everything yourself. As you work through this phase:
Shortform Extended Example—Edgar: Edgar sets up a merchant account at his bank and orders 20 Amsterdam hats. He sells them via his website and answers customer questions via email and phone. He revises one of his ads.
Shortform Extended Example—Devi: Devi sets up a Yahoo store. She sends out her newsletter to everyone who signed up and asks them what they’d like to see on a DVD. After getting feedback, she makes the DVD and opens her web store. Some of the people who signed up for the newsletter buy DVDs.
In this phase, you’re going to add a local fulfillment company. As you work through this phase:
Shortform Extended Example—Edgar: Edgar sells more hats, earning enough cash to buy more advertising. He negotiates a discount on an ad in a magazine and puts his phone number on the ad so that people will call him with any questions. He buys more hats, sells more hats, and, emboldened by the success, he signs up for a new four-issue ad package with the magazine. He sends the magazine a check for the ads that’s 30% of their rate on the rate card. He calls the magazine to make sure they got the check, and because they already have it in hand and their deadline is coming up, they don’t fight him for the 70% he didn’t pay.
Shortform Extended Example—Devi: Devi keeps selling DVDs. Many people have questions about the DVDs because during the cool-down circuit, a truck went by while she was filming and the sound was garbled. Devi retapes the cool-down and makes new DVDs. She also adds some more detail about the cool-down to her online FAQ.
In this last phase, now that you have more cash flow, you’re going to get outsourcers involved. Use outsourcers instead of freelancers because it’s easier to replace someone who works at an outsourcing company. As you work through this phase:
Shortform Extended Example—Edgar: Edgar signs up with a big fulfillment company and a credit card processor. He hires outsourcers from a VA firm and comes up with an algorithm for problem-solving. Whenever an outsourcer hits a problem, they can spend up to $30 to fix it without consulting him.
Shortform Extended Example—Devi: Devi decides she wants to take orders via phone. She researches call centers and when she finds one she thinks she likes, she figures out which companies they work with. She calls one of those companies in the morning, in the afternoon, and at night to see how well they respond at different times of day. They always answer the phone after two rings and never put her on hold, so she goes with them.
Many large companies don’t want to partner with small ones. To improve your company’s image:
Once you’ve reached Phase #3, you can start being choosy about your customers. At its simplest, customer service is to sell a customer good, reasonably priced product and solve any ordering problems quickly. Ideal customers are trading partners, not people you have to cater to. Demanding, unreasonable customers take up time and energy, and the best way to avoid them is to head them off before they even order. Remember the 80/20 rule. Losing an annoying customer likely has a negligible effect on your bottom line. (You can also always send them to a reseller so you don’t have to deal with them yourself.)
To filter your customers and cut down on customers contacting you:
Part 4 will cover step L: Liberate Yourself from the Rat Race of the DEAL process. Step L explains how to quit the rat race and live the dreamlines you came up with in step D (Define). If you’re an employee, your job is your day job. If you’re an entrepreneur, your job is your conventional company.
Once your muse is established, it’ll be earning you enough money that you no longer need to work a 9-5 job to bring in income. Quit your 9-5 job to give yourself more time to pursue your dreamlines.
You probably have reservations about leaving your job or company. You might think that it’s complicated. Most likely, you’re simply scared. To get past your fears, recall the fear-setting exercise in Chapter 3. Note and remember:
There are two kinds of mistakes when it comes to quitting your job:
The goal of the DEAL process is to gain ourselves enough time to do the things we’ve come up with in our dreamlines. The best way to live out a dream is to take a mini-retirement. A mini-retirement is a months-long hiatus from work during which you live one of your dreams. Unlike traditional retirement, you can have many periods of mini-retirement throughout your life.
The author spends most of his mini-retirements traveling, so from now on, the term “mini-retirement” will specifically refer to relocating to a new place for several months.
A mini-retirement is a better way to travel than a vacation or sabbatical because when you’re mini-retired you have enough time to truly experience a place. Vacations are so short they’re exhausting—to see a lot, you have to binge it. Sabbaticals are longer, but they only happen once or twice. Another advantage of mini-retirements is that they can be more affordable than vacation. Hotels and hostels are a lot more expensive than renting an apartment, so spending a month living somewhere else may not be any more expensive than a week-long vacation.
(Shortform note: The author both recommends that you disengage from work and gives advice on ways to work during your mini-retirement. The implication is that you can choose whether or not to work during your mini-retirement.)
You might be scared to go on a mini-retirement or find yourself coming up with excuses not to go. To get past your fears, recall the fear-setting exercise in Chapter 3. You might worry that traveling is dangerous, or fear for your kids if you have them. Here are some common fears and counterarguments:
To mitigate these fears:
Because mini-retirements last on the order of months, you’re not necessarily concerned with the low-cost travel associated with binge vacations. Since you’re relocating somewhere for a considerable amount of time, having a less horrible travel experience is probably worth the extra money you spend on a direct flight. It’s always nice to get a deal, though, so do the following to save on airfare:
Travel is a good excuse to narrow down your possessions because going away forces you to evaluate what you have—you have to either bring things or store them. It might be hard for you to get rid of things. Capitalism has trained us that if we bought something, it was valuable. But once you get momentum going, it becomes easier to let go of things. Having fewer possessions can also make you happier—less physical clutter means less mental clutter.
Don’t bring too much when you travel. How much luggage you have will significantly affect your trip. You’ll have to carry it and store it. Bring only things you really need. The author recommends bringing only:
Convince yourself to pack so minimally by:
There are four steps to planning a mini-retirement. You may not have to do all the steps for each mini-retirement. Here are the steps:
This itinerary covers the time from three months before you leave until a week after you’ve arrived:
Having a lot of material possessions creates a lot of mental clutter.
Think about the material possessions that you own. What possessions fall into the top 20%? Consider which possessions make you happy, are useful, or allow you to do things you want to. For example, if you love to play the guitar, your guitar would be in your top 20%.
What possessions fall into the bottom 20%? Consider which of your things take up a lot of space or that you never use. For example, if you bought a mouthguard because you wanted to get into rugby and then later discovered you hated rugby, the mouthguard would be in your bottom 20%.
What are the negative consequences of getting rid of anything on your bottom 20% list? Are any of them permanent?
Congratulations! You’ve now significantly decreased your working hours and earned yourself lots of free time. To get started on living the 4HWW lifestyle, the author recommends you try:
Initially, you won’t have trouble living the 4HWW lifestyle. You’ll be doing all the things you’ve always want to that you’d been putting off. After a while, however, you’ll have more time than you know what to do with. You might feel bored or unhappy. This is normal. The author went through this period too—he had to make a to-do list that included things like “eat breakfast” so he would feel productive.
When you have free time, you also have more free mental time, and your brain starts trying to tackle existential questions. The author recommends the following:
Making decisions is exhausting because it takes time, energy, and attention. Note that it’s not the number of decisions we make that’s exhausting, it’s the number of resources we use deliberating. For example, when you’re buying something, the more options you have are directly correlated with the amount of buyer’s regret you’ll have, and with how happy you’ll be with your choice.
There are six ways to reduce deliberation:
1. Automate decisions by making rules. Treat yourself the same way you treat your coworkers and outsourcers—make rules regarding certain actions and follow them in every case so you don’t have to think.
2. Don’t look for problems you can’t immediately solve. If you’re not in a position to do something about a problem (for example, it’s Friday night and everyone has left work for the week), avoid learning about it. If you find out about it, it’ll bounce around in your brain until you can fix it, distracting you from relaxing.
3. Don’t procrastinate decisions. If you already know your decision but are procrastinating giving it because it might make someone uncomfortable, stop. Give it now.
4. Make non-critical decisions quickly. If a decision isn’t about something important, give yourself a time limit, option limit, or if it costs less than a certain amount, get someone else to choose such as your VA.
5. Continue routines unless deviating is fun. Only look for variation when it will increase your enjoyment, otherwise, stick with routine.
6. Stop complaining. You complain because you regret decisions you made in the past. Notice every time you complain to avoid engaging in negative emotions.
(Shortform note: the Reducing Deliberation section appears in “The Best of the Blog” section of the book.)