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The 4-Hour Work Week (Tim Ferriss) – Book Summary, Notes & Impressions

The 4-Hour Work Week (Tim Ferriss)

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⭐ Impressions

Rating – 9/10

Fluff rating – 7/10 (noticeable fluff)

This book is life. It makes me feel alive and in charge of my life. If you feel stuck, trapped or experience existential crises on the reg, The 4-Hour Work Week is your medicine.

The title’s quite misleading. You might think it’s just about achieving financial independence, but it’s more than that. This is a philosophical book (that’s quite practical) as much as it’s about freeing yourself from the burdens of modern slavery.

You’ll learn principles that are counterintuitive to mainstream advice (like the FIRE movement, government-recommended superannuation/401Ks and self-help books that focus on fixing your weaknesses rather than emphasizing your strengths).

This is one of the few books that I’d actually read in full instead of settling for a summary. Even though it has a whole bunch of fluff, it’s full of gems that a summary cannot fully capture.

Read it.

🚀 TL:DR – the book in 5 bullet points

  • The goal of The New Rich is to create luxury lifestyles in the present by following the DEAL process – Definition → Elimination → Automation → Liberation
  • Definition – The New Rich want to make just enough money to live their defined dreams (not make money for money’s sake), distribute mini-retirements throughout their lives instead of all at the end, and only work on things they’re excited on (preventing work for work’s sake)
  • Elimination – eliminate the unimportant (tasks, people, activities etc.), most information that’s not relevant to your life, and interruptions to your life (avoid meetings, batch repetitive tasks and empower others to act without your permission)
  • Automation – delegate time consuming tasks to VAs, find product ideas that require little time to execute, test them before manufacturing with cheap ads to see if people will buy, and ensure your business can be operated without you (be like a police officer not a toll-booth)
  • Liberation – negotiate remote work arrangements with your boss, quit your job (and realise that it’s not the end of the world if you do), distribute mini-retirements throughout your life and fill the void of removing work by serving others and finding your calling

📑 Short summary – the book in 5-10 mins

  • The New Rich are those who create luxury lifestyles in the present using time and mobility
    • Deferrers – want to retire early, make a ton of money, and work when they want
    • New Rich – want to distribute mini-retirements throughout their lives, make just enough money to live their defined dreams, and prevent work for work’s sake
  • To become part of the New Rich, follow the DEAL process (or DELA if you’re an employee):
    • Definition – define who the New Rich are, how they operate, their rules, objectives, assumptions and lifestyle design
    • Elimination – kill the notion of time management, and 10x your per-hour output by ignoring the unimportant – TIME
    • Automation – put cash flow on autopilot using geographic arbitrage, outsourcing and rules of non-decision – MONEY
    • Liberation – break the bonds that confine you to a single location using mini-retirements – MOBILITY
  • Definition
    • The Basic Rules of the New Rich
      1. Retirement at 65 is worst-case scenario insurance, not an end goal
      2. Interest and energy are cyclical – you should alternate periods of activity and rest (in the form of mini-retirements) to be effective
      3. Less is not laziness – productivity/meaningful results are more important than “busyness”
      4. The timing is never right – if it’s important, just do it and figure it out on the way
      5. Ask for forgiveness, not permission – if the potential damage is moderate/reversible, do it – people will be fast to stop you but hesitant to get in the way if you’re moving
      6. Emphasize strengths, don’t fix weaknesses – life is too short to fix everything and leveraging your strength leads is more fun and multiplies your results
      7. Things in excess become their opposite – take the dosage of things into account
      8. Money alone is not the solution – it’s just an illusion – don’t be distracted by it
      9. Relative income ($/hr) is more important than absolute income ($) when you’ve achieved a goal dollar amount
      10. Remove harmful stress (distress) and find healthy stress (eustress) to grow
    • To define your New Rich Life, use the dreamlining technique
      • Ask not what you want or what your goals are, but “What would excite me?”
    • Most people choose unhappiness over uncertainty – they avoid quitting their jobs for fear that escaping will not work out
      • To escape this paralysis, realise that most worst-case scenarios rarely occur and are not even close to being fatal while best-case scenarios are potentially life-changing
  • Elimination
    • Eliminate unimportant tasks – the goal is not to do more “busy” work but to free your time (“do less”) while maintaining/increasing your income
      • Pareto’s Law (80/20 Rule) – ≥80% of the outputs result from ≤20% of the inputs
      • Parkinson’s Law – a task will swell in (perceived) importance and complexity in relation to the time alloted for its completion
      • Use Pareto’s Law and Parkinson’s Law together for best results – identify the critical few tasks and schedule them with very short and clear deadlines to limit tasks to the important
    • Eliminate most information – develop the ability to ignore or redirect any info that is irrelevant, unimportant or unactionable (i.e. news, magazines, books etc.)
      • Get into the habit of asking yourself – “Will I definitely use this information for something immediate and important?”
        • Focus on “just-in-time” information instead of “just-in-case” information
    • Eliminate interruptions to your life – these are time wasters, repetitive tasks and empowerment failures (where someone needs your approval to proceed)
      • To deal with time wasters – limit email consumption and production, screen incoming and limit outgoing phone calls, avoid useless meetings, steer people towards email first, phone second and meetings last
      • To deal with repetitive tasks – group (batch) all of your related time consuming tasks together so that you only need to set up for them once
      • To deal with empowerment failures – create rules that your employees can follow in situations and empower others to act without needing permission
  • Automation
    • Outsource your life – build an army of virtual assistants (that are cheaper than your hourly rate) to delegate tasks to so you can focus on bigger and better things
      • But ensure you eliminate before you delegate – never automate something that can be eliminated, and never delegate something that can be automated or streamlined
    • Find your muse an automated vehicle for generating cash without consuming time
      • Pick an affordably reachable niche market
      • Find product ideas for your market – you can either resell existing products (easiest), license them (hardest) or create new ones (with expert help)
        • Criteria to keep in mind – product must have a one sentence main benefit, be priced not too low and not too high, take ≤1 month to manufacture and be fully explainable in an online FAQ
    • Test your muse use cheap ads to test whether people will buy before manufacturing
      • If the ads aren’t profitable, cut your losses or retest with a better offer
    • Manage with absence – your business shouldn’t bother you – it should use you not as a toll-booth but rather a police officer who can step in if need be
      • Contract outsourcing companies that specialize in one function
      • Ensure outsourcers communicate among themselves to solve problems
      • Minimize the number of options you give customers to minimize headaches
      • Prevent bad customers from ordering and only do business with good ones
  • Liberation
    • Work remotely – create the leverage to do this by demonstrating the business benefits of remote work and being so valuable that your boss would rather accept than refuse you
    • Kill your job – face your fears and realise the worst-case scenario of quitting your job that you hate is not fatal while the best-case scenario is life-changing
      • You’ll find a way to pay the bills and get health insurance and your resume will actually stand out more if you do interesting things
      • It’s better to make mistakes of ambition instead of sloth
    • Distribute mini-retirements throughout your life – relocate to one place for 1-6 months before going home – this is recurring, not a one-time event
      • Creates emotional freedom, saves you money and changes your life
    • Fill the void – subtracting the bad (i.e. 9-5s, coworkers, deadlines) just creates a vacuum – you need to consciously live and become more
      • Learn how to slow down and do nothing
      • Serve others – do things to improve the lives of others
      • Learn – by taking mini-retirements (travel is the best form of education)
      • Test new vocations that call to you

📕 Chapter summary – the book in 45 mins

Contents show

First and Foremost

FAQ – Doubters read this

  • To take advantage of the things mentioned in this book, you don’t have to:
    • Quit/hate your job or take crazy risks
    • Be a single twenty-something
    • Travel (it’s just an option)
    • Be born rich
    • Be an Ivy League graduate (most of them go towards the default path of working high-income 80-hour per week jobs)

My Story and Why You Need This Book

  • Tim went from an overworked office worker to living his dream lifestyle by joining The New Rich (NR)
  • The New Rich are those who abandon the deferred life plan and create luxury lifestyles in the present using time and mobility
  • You don’t necessarily have to be ridiculously wealthy to join The New Rich
    • People don’t want to be millionaires – they just want to experience what they think only millions can buy – it’s the freedom and lifestyle they want, not the money
  • This book is different because:
    • It assumes you’re suffering (from time famine, dread and/or doing unfulfilling work)
    • It’s not about saving – the goal is fun and profit NOW
    • It’s not about finding your “dream job” – the perfect job is one that takes the least time
  • To become part of the New Rich, follow the DEAL process:
    • Definition – define who the New Rich are, how they operate, their rules, objectives, assumptions and lifestyle design
    • Elimination – kill the notion of time management, and 10x your per-hour output by ignoring the unimportant – TIME
    • Automation – put cash flow on autopilot using geographic arbitrage, outsourcing and rules of non-decision – MONEY
    • Liberation – break the bonds that confine you to a single location using mini-retirements – MOBILITY
  • Note – employees should follow DELA since bosses won’t like you spending just one hour in the office each day

Chronology of a Pathology

This chapter is like a mini-biography of Tim Ferriss. It summarises his journey from birth to getting into Princeton, working numerous odd jobs in a variety of fields, getting sick of those, founding (and failing) his first ventures, travelling all over the world, burning out and realising what matters most (after achieving financial freedom).

Tim has failed and succeeded quite a lot. The point of this chapter is that he only became an expert by making a lot of mistakes and trying many different things.

Step I: D is for Definition

Chapter 1 – Cautions and Comparisons

Comparing the New Rich vs Deferrers

What separates the New Rich from the Deferrers (those who save it all for the end only to find that life has passed them by)?

DeferrersNew Rich
To work for yourselfTo have others work for you
To work when you want toTo prevent work for work’s sake
To retire early or youngTo distribute recovery periods and adventures (mini-retirements) throughout life on a regular basis and recognise that inactivity is not the goal. Doing that which excites you is
To buy all the things you want to haveTo do all the things you want to do and be all the things you want to be
To be the boss instead of the employee; to be in chargeTo be neither the boss nor the employee, but the owner
To make a ton of moneyTo make a ton of money with specific reasons and defined dreams to chase, timelines and steps included
To have moreTo have more quality and less clutter – focusing on having a purposeful, meaningful existence
To reach the big pay-off (i.e. IPO, acquisition, retirement etc.)To think big but ensure payday comes every day (cash flow first)
To have freedom from doing what you dislikeTo have freedom from doing what you dislike but also to pursue your dreams without doing work for work’s sake
Getting Off the Wrong Train
  • Money is multiplied in practical value (called the “freedom multiplier”) depending on the number of W’s you control in your life:
    • What you do
    • When you do it
    • Where you do it
    • With whom you do it
  • So the 80-hour per week, $500K per year investment banker is less “powerful” than the NR who works 20 hours per week for $40K with complete freedom of when, where and how to live

Chapter 2 – Rules That Change the Rules

  • Life evolves when basic assumptions are proven wrong by those brave enough to do so
  • Note – don’t fix things if they aren’t broken e.g. don’t walk on your hands just to be different to the people walking on their legs
  • Different is better when it’s more effective or fun than the current accepted method
The Basic Rules of the New Rich
  1. Retirement at 65 is worst-case scenario insurance, not an end goal
  2. Interest and energy are cyclical – you should alternate periods of activity and rest to be effective
    • Distribute “mini-retirements” throughout life instead of doing it all at once when you’re 65
  3. Less is not laziness – productivity/meaningful results are more important than “busyness”
  4. The timing is never right – “Someday” is a disease that will take your dreams to the grave with you
    • If it’s important and you want to do it “eventually”, just do it and figure it out on the way
  5. Ask for forgiveness, not permission – if the potential damage is moderate/reversible, do it – people will be fast to stop you but hesitant to get in the way if you’re moving
  6. Emphasize strengths, don’t fix weaknesses – life is too short to fix everything and leveraging your strength leads is more fun and multiplies your results
  7. Things in excess become their opposite – take the dosage of things into account
  8. Money alone is not the solution – it’s just an illusion – don’t be distracted by it
  9. Relative income ($/hr) is more important than absolute income ($) when you’ve achieved a goal dollar amount
  10. Distress is bad, eustress is good – remove distress and find eustress to grow
    • Distress – harmful stress that makes you weaker, less confident and less able
      • E.g. destructive criticism, physical and mental abuse
    • Eustress – healthy stress that acts as a stimulus for growth
      • E.g. physical training, stepping out of your comfort zone

Chapter 3 – Dodging Bullets – Fear-Setting and Escaping Paralysis

  • Most people choose unhappiness over uncertainty
  • Most people who avoid quitting their jobs wishfully think that their course will get better in time or with increases in income
    • They’d rather live in their self-made prisons than try their luck at escaping
  • To escape this paralysis, try the following fear-setting exercise:
    • You’ll realise that most worst-case scenarios rarely occur and are not even close to being fatal (it’s not that hard to get back to where you were, let alone survive)
    • On the other hand, if your best-case scenario occurs, it could be life-changing
Fear-Setting Exercise – do this if you’re nervous about taking the jump for fear of the unknown
  1. Define your absolute worst-case scenario in detail. How likely do you think it would happen?
  2. What steps could you take to repair the damage or get things back under control?
  3. What are the outcomes/benefits (temporary and permanent) of more probable scenarios?
  4. If you were fired from your job today, what would you do to get things under financial control? Imagine this scenario and run through questions 1-3 above
  5. What are you putting off out of fear? This is likely what you most need to do
  6. What is it costing you to postpone action (1, 5, 10 years from now)? Define the cost of inaction
    • If we define risk as “the likelihood of an irreversible negative outcome”, inaction is the greatest risk of all
  7. What are you waiting for? (If it’s “timing”, you’re likely just afraid)

Chapter 4 – System Reset – Being Unreasonable and Unambiguous

  • Doing the unrealistic is easier than doing the realistic – there’s less competition (cause people are insecure) and ambitious goals give you inspiration to endure challenges
    • E.g. raising $1M is easier than raising $100K, picking up a 10 is easier than 5 8s
  • Ask not what you want or what your goals are, but “What would excite me?”
    • The opposite of happiness is boredom – therefore, you should aim to chase excitement
  • Some time after you graduate college and your second job, you start becoming “realistic” and realising that life isnt like the movies
  • To reignite your life with excitement, use the dreamlining technique
The Dreamlining Technique

Refer to the four hour blog website for sample worksheets on dreamlining

  1. What would you do if there were no way you could fail or you had $100 million in the bank? What would make you most excited to wake up in the morning to another day?
    • Create two timelines (6 months and 12 months) and list up to five things you dream of having, being and doing
    • Notes – don’t judge or fool yourself – go after what you really want, not what you think you should want – your goals must be unrealistic to be effective
  2. Convert each “being” in Step 1 into a “doing” to make it actionable
    • E.g. being a great cook → making christmas dinner without help
  3. Highlight the four most exciting or important dreams from all columns in both the 6 and 12 month timelines
  4. Determine the cost of these dreams and find your Target Monthly Income (TMI) for both timelines (+30% buffer for safety/savings)
    • Note – chances are your TMI is much lower than you expected
  5. Determine three steps for each of the four dreams in just the 6-month timeline and take the first step NOW
    • Note – the best first step is often finding someone who’s done it and asking for advice

Step II: E is for Elimination

Chapter 5 – The End of Time Management

  • You shouldn’t be trying to fill every second of the day with “busy work” trying to do more
    • The goal is to free your time (“do less”) while maintaining/increasing your income
  • The employee’s productivity goals – obtain pay raises and a remote working arrangement
    • Remember – employees need to implement DELA, not DEAL – liberation from a monitored office environment is needed before you can work ten hours a week
  • The entrepreneur’s goals – decrease the amount of work while increasing revenue
Being Effective vs Being Efficient
  • Effectiveness is doing the things that get you closer to your goals (the important stuff)
  • Efficiency is performing a task (regardless of importance) in the most economical way possible
    • E.g. a great door-to-door salesman is probably efficient but not as effective as if they were to use email or direct mail to sell
  • What you do is infinitely more important than how much time you spend/how you do it
Pareto and His Garden: 80/20 and Freedom from Futility
  • Pareto’s Law (or the 80/20 Rule) – ≥80% of the outputs result from ≤20% of the inputs
    • i.e. 80% of the consequences flow from 20% of the causes, 80% of the results come from 20% of the effort/time, 80% of profits come from 20% of products and customers etc
  • Most things make no difference – being busy is unproductive and lazy thinking
  • Focus on the important few (i.e. 20% of activities, people, items) and ignore the rest
  • Note – you’ll have to try lots of things to identify what works best first before eliminating
The 9-5 Illusion and Parkinson’s Law
  • Parkinson’s Law – a task will swell in (perceived) importance and complexity in relation to the time alloted for its completion
    • E.g. if you get 24 hours to complete a project, the time pressure forces you to focus on executing the bare essentials, but if you get a week or a month, you’ll become overwhelmed by the unimportant
    • The shorter the deadline, the higher (or atleast) equal quality the end product

  • Use Pareto’s Law and Parkinson’s Law together for best results – identify the critical few tasks and schedule them with very short and clear deadlines to limit tasks to the important

Chapter 6 – The Low-Information Diet – Cultivating Selective Ignorance

  • Most info is time-consuming, negative, irrelevant to your goals and outside your influence
  • You need to develop the ability to be selectively ignorantignore or redirect any information that is irrelevant, unimportant or unactionable
    • Less info is more (refer to the 80/20 rule and Parkinson’s Law)
  • The first step is to maintain a low-information diet
    • Try and use these rules in your day-to-day life
      • No news websites, newspapers, magazines, audiobooks or non-music radio
        • If news is particularly important, you’ll hear other people talk about it anyway
      • Only one hour of pleasure TV each evening
      • Every day at lunch, get your five-minute news fix
      • No reading books (except for this one and one hour of fiction before bed)
      • No web surfing unless necessary to complete a task for that day
    • Tim consumes a maximum of one-third of an industry magazine and one business magazine per month for actionable information
    • Get into the habit of asking yourself – “Will I definitely use this information for something immediate and important?”
      • Focus on “just-in-time” information instead of “just-in-case” information

Chapter 7 – Interrupting Interruption and the Art of Refusal

  • There are three main offenders that cause interruptions in your work/life:
    • Time wasters – things that can be ignored with little consequence
    • Time consumers – repetitive tasks/requests that need to be completed
    • Empowerment failures – times where someone needs your approval to proceed
  • To deal with time wasters (e.g. meetings, web surfing, unimportant emails):
    • Limit email consumption and production – turn off notifications, check emails only once/twice a day, create an auto-responder that lets people know you’ll only respond at those times (and if it’s urgent, they can contact you via phone)
    • Screen incoming and limit outgoing phone calls – use two phone numbers [urgent and non-urgent], put the urgent one in your email auto-responder/non-urgent voicemail, always pick up the urgent call (but don’t let the other person chit-chat) and keep the non-urgent one silent with a voicemail that says you’ll only respond to voicemail at specific times per day
    • Always set agendas and end times for meetings – meetings should only be held to make decisions about a predefined situation, not to define the problem
    • Steer people towards email first, phone second, in-person meetings last
  • To deal with time consumers (e.g. reading/replying to emails, phone calls, running errands):
    • Batch tasks – group all of your related time consuming tasks together so that you only need to set up for them once – this avoids the penalty and inefficiency of context-switching
      • Example – checking email and phone calls twice per day at specific times
    • If batching results in a net benefit (loss), batch on a less (more) frequent schedule
      • Benefits = hourly rate x hours saved by batching
      • Costs = loss of income from batching (e.g. losing sales cause you checked your emails only once a week)
  • To deal with empowerment failures (e.g. fixing customer problems, approving cash expenses):
    • Empower others (or yourself if you’re an employee) to act without needing permission
    • The goal is to remove any info/decision-making bottlenecks as much as possible so you micro-manage less (or if you’re an employee, you’re micro-managed less)
      • Create rules that your employees can follow in situations (e.g. if a problem costs below $100 to fix, you have permission to fix it without contacting me)
      • These rules will have costs but usually this’ll be much cheaper than you spending your time on them – and your employees become happier, less micro-managed
    • Review decisions your employees make occasionally to determine whether you need more or less empowerment

Step III: A is for Automation

Chapter 8 – Outsourcing Life

  • The goal of automation is to build a system to replace yourself (so you can focus on bigger and better things that require your attention)
    • Note – you can always do something more cheaply yourself – this doesn’t mean you should/want to spend time doing it yourself – if your time is worth $25/hour and you can outsource something for $10/hour, it’s a much better use of resources
  • You can do this by building an army of assistants to delegate your tasks to
Delegation Dangers: Before Getting Started
  • Eliminate before you delegate – never automate something that can be eliminated, and never delegate something that can be automated or streamlined
  • Refine rules and processes before adding people (as you can multiply problems if not careful)
  • Make sure each delegated task is well-defined and time-consuming
Basic Criteria for Finding a VA
  • Remote vs local – remote, foreign workers are cheaper per hour but the language barrier increases time taken per task and management required on your part
    • The most important metric is cost per completed task (not cost per hour)
  • Solo vs support team – being dependent on one VA is a single point of failure that can cause your whole system to fail (if they somehow end up sick or out of commission)
    • Recommendation – hire a VA firm or VAs with backup teams instead of solo VAs
Ensuring your VAs Don’t Misuse your Info
  • Prohibit VAs from subcontracting work to untested freelancers without your permission
  • Try and use firms with security measures (e.g. employee background checks, regular reporting)
  • Only use credit cards for online transactions/VAs (so you can reverse unauthorized transactions)
  • Create new unique login and passwords to be used on sites your VA will be accessing
Common Complaints/Mistakes
  • Giving imprecise directions – sentences should have one possible interpretation
  • Giving VAs a license to waste time – request status updates after a few hours of work
  • Setting the deadline weeks in advance – assign tasks that are to be completed within ≤ 72 hours
  • Giving too many tasks with no order of importance – send one task at a time when possible

Chapter 9 – Income Autopilot I – Finding the Muse

  • The goal – create an automated vehicle for generating cash without consuming time – a ‘muse’
  • Ensure you begin with the end in mind – determine how you’ll sell and distribute before committing to a product in the first place
    • The more middle-men are involved, the higher margins, time and effort needed by you
Step One: Pick an Affordably Reachable Niche Market
  • Find a market → define your customers → then find/build a product for them
    • DON’T first create a product, then seek someone to sell to
  • Selling to everyone means greater competition, higher marketing costs and lower prices
    • Instead you want to target a niche e.g. male student-athletes, German shepherd dog owners
  • To find profitable niches: look deeply at your life and explore your areas of interest, habits and associations → find groups that spend money on products of some type
Step Two: Brainstorm (Do Not Invest In) Products
  • The goal is to find great product ideas without spending anything
    • Pick two markets you’re most familiar with that sell advertising for less than $5000 and have atleast 15000 members – you’ll be brainstorming product ideas for these two markets
  • There are several criteria that ensure products fit into an automated architecture
    • One sentence main benefit (e.g. the iPod “1,000 songs in your pocket”
    • Costs the customer $50-200 (not too low, not too high – aim for an 8-10x markup)
    • Takes ≤3-4 weeks to manufacture (important for keeping costs low and avoiding stockpiling)
    • Fully explainable in a good online FAQ (to avoid answering questions yourself)
  • There are three options for finding product ideas:
    • Resell a product – purchasing an existing product at wholesale then reselling it
      • This is easiest but least profitable since others can do the same and will eventually compete with you on price
    • License a product – can either invent the product and grant others the right to sell (usually for passive 3-10% of sales) or manufacture/sell a product someone else has invented (for 90-97% of sales)
      • Note – Licensing is very deal-making intensive – it requires creativity in negotiating contracts and so is not ideal for first-timers
    • Create a product – either by yourself, private labelling or by outsourcing creation to experts
      • Avoid innovating – usually creates more manufacturing costs/time issues
      • Info products are great – fast manufacturing times, hard to duplicate (unlike physical products) and permit high markups (20-50x)
If You’re Not an Expert
  • You don’t need to be an “expert”
    • Being perceived as an expert sells more products
    • Actually being an expert results in better products and prevents returns
  • You can acquire expert credibility indicators in short time by:
    • Joining two or three related trade organizations with official sounding names
    • Reading the three top-selling books in your niche and summarizing each on one page
    • Giving a free 1-3 hour seminar at universities, big companies
    • Offer to write one or two articles for trade magazines related to your niche
    • Join ProfNet – a service that journalists use to find experts and quote for articles
  • Note – never lie about who you are – present the truth in the best light but don’t fabricate it

Note – the end of this chapter in the book has great resources on how to confirm market size, find products to resell, find public domain info to repurpose and more… highly recommend

Chapter 10 – Income Autopilot II – Testing the Muse

  • Asking focus groups/people if they “would buy” your product is a poor indicator of profitability as people usually aim to please and words are cheap
    • To best determine a product’s viability, ask people to buy (not if they would buy)
Step Three: Micro-Test Your Products
  • Use cheap ads (e.g. Google Ads) to test consumer response to a product before manufacturing
  • The basic test process consists of three parts:
    • Best – look at the competition and create a better offer on a basic website (1-3hrs)
      • Google the top terms to find your product → visit the top 3 sites → find out how you can differentiate yourself (e.g. free shipping, easier to use) → create a better offer on a single-page website
    • Test – test your offer using short Google Ads campaigns (3hrs to set up – 5 days to observe)
      • Set up ad campaigns with 50-100 specific search terms showing purchaser intent
      • Link your ads to a signup form on your website for customers to put their details in if interested (say your products are on “back order”)
    • Divest or invest – cut losses on the losers and manufacture the winner(s)
      1. After 5 days, you want to measure click-through and conversion rates for your ads
        • Compare how much you spent on ads vs how much you “sold”
      2. If it’s profitable, pursue it. If not, retest with a different offer or just cut your losses

Chapter 11 – Income Autopilot III – MBA: Management by Absence

  • For your business, start with the end in mind – have a map of what it’ll eventually look like
    • Goal – a business that bothers us as little as possible (be out of the business, not in it)
    • Your organization shouldn’t use you as a toll-booth but rather a police officer who can step in if need be
  • The main principles of managing by absence are:
    • Contract outsourcing companies that specialize in one function vs freelancers – so if someone’s fired, they are automatically replaced without interruptions
    • Ensure that all outsourcers are willing and able to communicate among themselves to solve problems – give written permission to make cheap decisions without consulting you
  • How to achieve an automated infrastructure from zero
    • Phase I – 0-50 total units of product shipped – do everything yourself
    • Phase II – >10 units shipped per week
      • Add a FAQ to your website and add answers to common questions as received
      • Find cheap, local fulfillment companies that can ideally respond to emails/phone calls from customers
      • Have your manufacturer ship product directly to the fulfillment company and forward order status emails to them
    • Phase III – >20 units shipped per week – improve your outsourcing
      • Get a fulfillment company that handles everything (order statuses, refunds, returns etc)
      • Use call centers (that are effective at selling) to answer questions
The Art of Indecision: Fewer Options = More Revenue
  • The more options you give the customer → the more indecision you create → the fewer orders you receive (and more manufacturing/customer service burdens for yourself)
  • Minimize the number of decisions your customers can/needs to make: have 1-2 purchase options, shipping options, sell online only, avoid international shipments
Not All Customers Are Created Equal
  • After Phase III, when you have cash flow, start avoiding bad customers which cause problems and only do business with the good ones
  • See the customer as an equal trading partner and not as someone to be pleased at all costs
  • Rather than dealing with bad customers, prevent them from ordering in the first place
    • Avoid customers that are low-profit and high-maintenance
    • Offer low-priced products instead of free products
    • Offer a lose-win guarantee instead of free trials e.g. Domino’s “delivered in 30 minutes or less or it’s free”

Step IV: L is for Liberation

Chapter 12 – Disappearing Act – How to Escape the Office

  • The NR are defined by their ability to work wherever and whenever they want
  • To create the leverage to do this (when asking your boss), you need to:
    • Demonstrate the business benefit of remote work
    • Be so valuable that it’s too expensive/painful to refuse your request for it
  • There’s a five step process for escaping the office:
    1. Increase investment – get the company to invest as much in you as possible (i.e. via training, flights, certifications etc) so the loss is greater if you quit
    2. Prove increased output remotely – find a way to trial working remotely (i.e. by calling in sick) and ensure you double your work output and keep records of this
    3. Prepare the quantifiable business benefit – create a list of how much more productive you were (quantitatively) while working remotely and the benefits to the company
    4. Propose a reversible trial periodi.e. two days remote per week to start
    5. Expand remote time – continuously prove that you’re more beneficial to the company while working remotely and gradually transition to full-time remote work
  • An alternative process – The Hourglass Approach
    1. Use a preplanned project or emergency that requires you to take 1-2 weeks out of the office – insist on working remotely instead of taking a vacation
      • Make the two weeks of remote work the most productive you’ve ever had
    2. Show your boss the quantifiable results due to remote work and suggest a trial period for remote work (2-3 days per week for 2 weeks)
      • Make your remote days the most productive and your in-office days the least
    3. Eventually, suggest full-time remote work
  • Note – the best time to ask for remote work is when it’d be too disruptive to the business to fire you even if you were less productive while remote

Chapter 13 – Beyond Repair – Killing Your Job

  • In this chapter, “job” = company if you run one OR normal job if you have one
  • Some jobs are beyond repair and cannot be improved
  • Being able to quit things that don’t work/aren’t worth it anymore is key to being a winner
    • Note – even if you’ve spent a lot of time/money on something, it’s not always productive to continue
  • Key fears that keep people from quitting things (jobs) that are harming them:
    • “Quitting is permanent” – Chapter 3 (Fear setting) should have made you realise that your worst-case scenario is never irreversible – you can always come back from a loss
    • “I won’t be able to pay the bills” – the goal is to have a new job/cash flow source before quitting but still, there are always options and few things are fatal
    • “I’ll lose health insurance and retirement accounts if I quit” – you can get health insurance without an employer for a small monthly fee and transfer your 401k to another company
    • “It will ruin my resume” – if you quit and do interesting things, it only ADDS to your resume and helps you stand out and be interesting to the typical interviewer
  • There are two types of mistakes:
    • Mistakes of ambition – the result of a decision to act/do something – these are good
    • Mistakes of sloth – the result of a decision not to do something – these are bad
      • This is how poor job choices become lifelong prison sentences
      • The consequences of bad decisions do not get better with age
        • Instead of staying in a bad situation, test your assumptions

Chapter 14 – Mini-Retirements – Embracing the Mobile Lifestyle

  • Instead of saving for retirement and then travelling the world at the end of your life, why not redistribute your retirement throughout your life?
  • Most workers with limited annual leave do what’s called binge travelling – seeing as many countries/places as they can crammed into a limited time frantically
    • Do the opposite of this – the mini-retirement
  • The mini-retirement involves relocating to one place for 1-6 months before going home
    • This allows us to experience (not escape) the world at a speed that allows it to change us
  • Mini-retirements are a lifestyle – they are recurring, not one-time events
Emotional Freedom
  • You can have financial and time freedom but still be caught up in the rat race
  • To be truly free:
    • Set aside materialistic addictions, time-famine mindset and comparing yourself to others
    • Learn how to slow down, disintegrate your old habits and get lost intentionally
Financial Realities
  • Mini-retirements also save you more money – relocating to a semi-permanent apartment is much cheaper than staying at a temporary hostel/hotel (or even living at home)
Fear Factors: Overcoming Excuses Not to Travel
  • Most excuses not to travel are easily deconstructed – most places are not as dangerous as they seem on TV, travel is often cheaper than living at home, there are hospitals everywhere, and taking career breaks can boost your resume, not hinder it
When More Is Less: Cutting the Clutter
  • Extended travel is the best way to reverse the damage from years of materialistic hyper-consumption – you can’t drag your clutter everywhere with you
  • Clutter (things you don’t need or use or want) consumes attention and is a chore to maintain
  • The best advice to first-time extended travellers: take less with you
Planning for mini-retirements
  1. Take an asset and cash-flow snapshot – decide on what assets and expenses to remove that cause stress/distractions without adding much value
  2. Fear-set a one-year mini-retirement in a dream location in Europe
  3. Choose a foreign but safe location for your actual mini-retirement – wander or scout from a starting point until you find a spot you want to settle in
  4. Prepare for your trip – eliminate clutter, automate tasks at home and ensure everything at home will be okay while you’re on your mini-retirement + actually prepare to stay overseas

Chapter 15 – Filling the Void – Adding Life After Subtracting Work

  • While free time is the goal, too much free time creates self-doubt and overthinking
  • In the beginning, it’s critical to go nuts and live your dreams and reverse your repression/postponement – but eventually existential dread sinks in
  • Subtracting the bad just creates a vacuum – you need to consciously live and become more
  • You also have more options which causes you to doubt yourself and your path vs the seemingly “surefooted” path everyone else leads with their 9-5s
    • Is this as good as it gets? Following orders is so much easier
  • Doubts arise when nothing else is there to occupy your mind – so find a focus/goal that forces you to grow and gives you a purpose
  • A more useful question than “What is the meaning of life?” (which is quite vague and not really helpful) is “What can I do with my time to enjoy life and feel good about myself?”
    • Form better questions so you can get better answers
Learning Unlimited: Sharpening the Saw
  • Learning is living – travel/relocation allows learning to happen much faster
    • The different surroundings rewire your brain and force you to reevaluate your life
    • Every country can teach you something radically different
Service for the Right Reasons
  • Service is simple – it’s doing something improves life besides your own
  • But note – everything out there needs help – don’t get baited into having arguments over which cause is best to serve because there’s no objectively best cause
  • Find the cause that interests you most and don’t apologise for it
The process of adding life after subtracting work
  1. Revisit ground zero – do nothing, slow down and take a break from constant overstimulation
  2. Make an anonymous donation to a service/organization of your choice – helps you to start associating service with feeling good
  3. Take a learning mini-retirement focused on learning and service to causes you care about
  4. Revisit and reset dreamlines based on new things you want to be, do and have
  5. Based on outcomes of steps 1-4, test new vocations (not jobs) that call to you

Chapter 16 – The Top 13 New Rich Mistakes

  1. Losing sight of dreams and falling into work for work’s sake
  2. Micromanaging and emailing to fill time
  3. Handling problems your outsourcers/coworkers can handle
  4. Helping outsourcers or coworkers with the same problem more than once, or with non-critical problems
  5. Chasing customers when you have enough cash flow to finance your nonfinancial pursuits
  6. Answering email that won’t result in a sale or can be answered by a FAQ/auto-responder
  7. Working where you live, sleep and/or relax
  8. Not performing a thorough 80/20 analysis every 2-4 weeks for your business and personal life
  9. Striving for endless perfection (rather than great/good enough) in your personal or professional life
  10. Blowing small problems out of proportion as an excuse to work
  11. Making non-time-sensitive issues urgent in order to justify work
    • Focus on life outside money – it’s your responsibility to find/create meaning in your life
  12. Viewing one product, job or project as the end-all and be-all of your existence
    • Whatever you’re doing now is just a stepping stone to the next project/adventure
  13. Ignoring the social rewards of life
    • Happiness shared in the form of love/friendships is happiness multiplied

The Last Chapter

  • Life is neither a problem to be solved nor a game to be won
    • Don’t take it too seriously – approach life with a serendipitous lightness
    • The only rules and limits are those we set for ourselves

*For the past 33 years, I have looked in the mirror every morning and asked myself: “If today were the last day of my life, would I want to do what I am about to do today?”. And whenever the answer has been “No” for too many days in a row, I know I need to change something

– Steve Jobs

The remaining chapters are highlights from Tim Ferriss’ blog and bonus practical material on living the 4-hour work week. You can check them out by grabbing the book (which I highly recommend you do)