Many people want to retire as millionaires, but they don’t actually crave a million dollars; what they want is the millionaire lifestyle. They want to be able to travel, learn new skills, and spend their time doing whatever they want instead of working. There are two schools of thought on how to achieve this lifestyle:
The 4-Hour Workweek teaches you how to live the second lifestyle. The 4-hour workweek (4HWW) lifestyle is a specific version of the New Rich lifestyle in which you create a business called a “muse” that makes you money while not taking up a lot of time.
You can achieve the 4HWW lifestyle by following a four-step process with the acronym DEAL: define, eliminate, automate, liberate. First, you’ll define what you want to spend your time doing. Then, you’ll free up that time by eliminating unnecessary activities and streamlining your 9-5 job and life. Next, you’ll automate your 9-5 job and chores and create your muse. Finally, once your muse is earning you enough money, you can leave your 9-5 job and do everything you defined.
The first step to living the 4HWW lifestyle involves addressing your fears and defining what you want to do.
Once you’ve embraced the idea of the New Rich lifestyle, it’s time to figure out what might hold you back—for most people, it’s fear of uncertainty. People are so scared of the unknown that they choose to be unhappy instead, because at least they know what that’s like.
To assess how much your fears are holding you back, consider:
To get past your fears, when considering doing something (such as leaving your job), ask yourself:
Once you know exactly what it is you’re worried about, it will seem less frightening and easier to mitigate.
The things we’re most scared to do tend to be the things that are most important or rewarding to do.
Next, it’s time to define what the ideal 4HWW lifestyle would look like for you. Do this with a dreamline—a timeline applied to a dream. There are two general things to keep in mind with dreamlining:
You can create dreamlines on a three-, six-, or twelve-month timeline. Here are the seven steps to dreamlining:
The second step to living the 4HWW lifestyle is to eliminate things that take up time you’d rather use for something else. Stop doing unimportant things and learning unactionable information, and cut down on time spent on email, calls, and meetings. Finally, if you’re an employee, transition to remote work so you have full control of your own schedule.
Most of us probably approach our chores and tasks by managing our time, prioritizing, and finding efficient ways to get things done. However, the best way to save time is to only do things that matter, and stop doing everything that doesn’t.
There are two principles to keep in mind:
In order to stop doing things that aren’t important, apply both laws—only do the 20% of your tasks that give you the most return, and give yourself short deadlines for those tasks.
Ignore newspapers, radio, and TV—all media. If something important happens that will affect you, you’ll hear about it from someone else.
If you need to learn about something, ask other people who already know about it to summarize it for you. If you don’t have a friend who can advise you on the subject, get a brief overview of the topic by reading a single book on it and then contacting experts and asking good questions.
Only learn information as you need it—if you learn something too far in advance, you’ll forget it by the time you need it, and have to spend time relearning it. And if you start learning from a particular resource and it’s not helpful, stop. There’s no need to finish everything you’ve started.
When you work an office job, there are three categories of things that take up time: busywork and distractions, routine work, and work that requires approval or additional information. You can eliminate the first and expedite the last two:
1. Busywork. To avoid busywork, limit people’s access to you. People will try to access you in three ways:
2. Routine work. Routine work needs to be done but isn’t very high-impact, such as going grocery shopping. The most effective way to deal with these kinds of tasks is to batch them—do them all at once at a scheduled time instead of doing them as they come up. This cuts down on set-up time.
3. Work that requires approval. Work that requires approval can eat up your time whether you’re an employee or entrepreneur. The best way to deal with these kinds of tasks is to create rules or an algorithm that covers as many situations as possible.
When you work remotely, you don’t have to physically report to an office for 40 hours a week. As long as you get your work done, no one will know how long it took you to do it. Once you’re remote, do all your work tasks in as little time as possible Then, use the time you’ve saved to work on your “muse” (a specific type of business) or do something fun.
There are two methods for transitioning to remote work, the five-step and the hourglass:
If you can’t get your boss to agree to remote work, quit or get yourself fired. You won’t be able to create your muse unless you have more free time. Therefore, not quitting your job is effectively quitting your dreams. Doing nothing can be a much larger mistake than doing something imperfectly.
The third step to living the 4HWW lifestyle is to automate everything you don’t want to do. That way you can spend your time doing whatever you want while still having money come in. To do this, you’ll hire a virtual assistant, start your muse, and then automate your muse.
You should get a virtual assistant (VA) regardless of whether you’re an employee or entrepreneur, and regardless of whether or not you think you need one. Getting a VA teaches you to manage, teaches you the value of your own time, and reinforces step E (Eliminate)—if you’re waffling about eliminating something, you’ll cut it loose once you have to pay someone to do it.
Any tasks you delegate to your VA should be important, time-consuming, specific, and remote-friendly. When delegating:
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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....
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:
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...
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?
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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 first step of dreamlining is to brainstorm.
What are some things you’ve always wanted to have?
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:
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:
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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?
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:
“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.
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.
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?
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:
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?
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.
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....
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?
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:
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:
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%.
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,...