Transcription
The 4-Hour Work Week by Tim Ferris. Imagine only working 4 hours a week, anywhere in the world, for the rest of your life. Imagine sipping a cocktail on a beautiful Venice Beach whilst your online business makes money for you automatically. Sounds amazing, right? But is it truly possible? Yes. Yes, it is. Now, there's a lot of content in this book, so I've nailed it down to the six most vital lessons that will actually bring you closer to living the 4-Hour Work Week and joining the new rich.
Lesson one: Define fear. What's the absolute worst-case scenario that could happen if you did what you're considering? On a scale of 1 to 10, one being nothing and 10 being permanently life-changing, your worst-case scenario is probably a three or a four. Maybe you'll have a temporary argument, be out of a job for a month, or lose a friend you didn't like. Anyway, Tim bought a one-way ticket to Europe; he forgot all about his business and life worries and traveled around the world in style for 15 months, finding ways to make it work along the way. What is it costing you financially, emotionally, and physically by not chasing your dream? Are you really going to lie on the couch for the next 10 years and continue doing something you don't enjoy because you're scared to take a few risks?
The second lesson is to automate income. Three popular ways to automate income are: one, to create a product; two, to license a product; or three, to resell a product. Here's an example of how I resell a product: I have a page on my website with shirts for sale. There's also an online t-shirt service called Printful, and then there's the wholesaler like Alibaba.com. Here's what would happen if Jerry ordered a shirt from my website: Jerry pays me $25 for the shirt. Printful would be notified that Jerry purchased a shirt, so Printful orders a shirt from Alibaba for $10. Printful then prints my logo on the shirt and charges me $15. Finally, Printful ships the shirt to Jerry. Jerry's happy because he's supported my channel and got himself a t-shirt. Printful is happy because they made $5. Alibaba is happy because they sold a shirt for $10, and I'm happy because I gained a new loyal fan and made $8 by reselling a shirt from the Printful store. This process doesn't require my time; Printful handles the payment, packaging, shipping, and customer service for me. All I had to do was create the logo and make a simple WordPress site. Many drop shippers outsource these tasks to automate their business. Once you've chosen a way to make money, you'll need to test if your idea is viable, which Tim calls "testing the Muse." You might want to sell toy sharks with laser beams attached to their heads, because why not? But are there people willing to buy? The final part to income automation is removing yourself as the bottleneck in your business. If you run a lemonade stand, your business can't scale if you keep serving lemonade. To scale means that a business can handle 10,000 orders per week as easily as it can handle 10 orders per week. In the case of a lemonade stand, what happens when the line gets very long? People will leave because you can't serve them fast enough, right? However, if you hired two employees to take over, then you are no longer the bottleneck. To scale, you could hire more and more employees to run more and more lemonade stands as long as you're making a profit.
Lesson three: Be effective, not efficient. Don't fool yourself into thinking you're productive by filing papers and checking emails. We like to think we're busy when, in reality, we're avoiding the important tasks. Elimination is key. You could write a book in only 3 days, but if you haven't done your research and the market doesn't like it, then you've probably wasted your time. To decide what's important, use the 80/20 principle. If you had a gun to your head and had to stop doing 80% of your tasks, what would you remove? Parkinson's Law says that work expands to fill the time available for its completion. So if you give yourself 8 hours a day to write 1,000 words, then you'll probably take 8 hours. But if you only give yourself 2 hours, your mind will shift gears and accelerate your efforts.
The fourth lesson is outsourcing. What if you never had to do dishes again? You could pay your roommate to do 1 hour worth of dishes for $10. You could spend that extra 1 hour on activity that would give you 20 times the value. Let's say I was paid $200 by a client for a 60-minute coaching call. I could then spend that $200 on 20 hours worth of dishes and use that 20 hours coaching other students, which would be a 400 times more valuable use of my time. Over time, I could increase the price of my coaching and afford to outsource more things, like preparing meals, doing the laundry, and business tasks like responding to customer complaints, etc. Do you see what I'm getting at? Hiring a virtual assistant has a tremendous return on investment. They can do tasks for $3 an hour whilst you sleep. Let's not sugarcoat anything, though; it may take time to find a suitable VA, and Tim suggests hiring one from an organization because they have backups. Before you outsource anything, ensure you eliminate tasks that don't matter. Eliminate before you delegate.
Lesson five: Relative income. Ronald earns $100,000 per year; he works 80 hours per week. Ronald makes $25 per hour. Now, Debbie earns $50,000 per year, half as much as Ronald, but she only works 10 hours per week and makes $100 per hour. Although Ronald makes double in absolute income, Debbie is four times richer in relative income. Debbie makes more by working less, which gives her more time freedom than Ronald. You can't do this working a standard 9-to-5 job; that's that's why reselling, licensing, or creating a product is the way to go.
And now for the final lesson: Mini-retirements and Geo-arbitrage. Once you've freed up time, automated income, and escaped the office, you can begin taking mini-retirements, which is where you relocate to one place for 1 to 6 months. Mini-retirements aren't as expensive as you think when you recognize that the costs of travel are mostly transportation and housing costs, and that you can rent a posh apartment for 3 to 4 weeks for the same price of staying in a mediocre hotel for 4 days. Then things start to get very, very interesting. I saved $32,000. So it sounds counterintuitive, but you can actually improve your finances by taking mini-retirements in countries where things cost less. Tim stayed in a penthouse apartment on a popular street, including cleaners, security guards, a phone, energy, and high-speed internet for just $550 per month. He also had two 4-to-5-star meals per day for just $10. This concept is known as Geo-arbitrage: leveraging the economic differences between markets to generate a high return. For example, you could earn $100 online whilst living in Thailand. That $100 could buy you 60 meals in Thailand but only six in the US. Now that's 10 times more food for the same amount of money. Do you see how crazy that is? The same goes for accommodation, gym memberships, and almost anything else you can think of. To summarize, here are the six lessons we covered: define fear, automate income, be effective not efficient, outsourcing, relative income, mini-retirements, and geo-arbitrage. [Music]