Most people want to be millionaires so they can quit their day jobs, travel, buy nice things, spend time with the people they care about, and pursue a hobby or a passion. However, in The 4-Hour Workweek, entrepreneur, consultant, and life coach Tim Ferriss argues that you don’t need a million dollars to have a millionaire lifestyle. We’ll describe each of his steps to creating this life, examine why some of his recommendations are particularly effective, and explore alternatives and counterarguments to other suggestions.
Ferriss says there are two ways non-millionaires attempt to live the retired millionaire lifestyle:
1. Postponers follow the conventional system of working for 30-40 years and then retiring. However, they use up the prime physical years of their life working, then either run out of money or lose the ability to enjoy their money while they’re traditionally retired.
(Shortform note: The average age of retirement is trending up, so postponers might find themselves delaying retirement even longer than expected. A Gallup poll from 2021 found that the average retirement age was 62—Gallup’s 2020 poll reported that the average retirement age was 61, and its 1991 poll reported the average retirement age was 57.)
2. Lifelong retirees live the millionaire lifestyle throughout their lives, alternating brief periods of work with lengthy pseudo-retirements. Their goal is to spend as little effort and time to make as much money as possible. The 4-Hour Workweek teaches you how to become a lifelong retiree by building a business that makes you enough money to live on, while not taking much of your time.
What if You Don’t Want Your Own Business?
Ferriss’s advice in this book is, essentially, to create a strong source of passive income so that you can afford to quit your day job. He suggests doing so by creating your own company and then automating it, but there are other methods for earning money without having to work continuously.
For example, in Rich Dad’s Cashflow Quadrant, Robert Kiyosaki says that financial independence comes from investing: In other words, putting your money into things that you expect to provide ongoing returns. Common examples of investments include retirement accounts, stocks, and rental properties. According to Kiyosaki, the goal of investing is to eventually live entirely on those returns so that you’re never forced to work again.
Ferriss says that you can achieve a millionaire lifestyle by following a four-step process, which he illustrates with the acronym DEAL: Define, Eliminate, Automate, Liberate. Each section of this guide will explore one of those four steps.
First, we’ll discuss how to decide what you want to do. In other words, if you were freed from your time-consuming obligations, what would you do with your time? Next, we’ll explore how you can streamline your schedule—figure out which time-consuming activities you can get rid of now to make your day job less onerous. Third, we’ll show how to use your newfound time to create your own business (what Ferriss calls your “muse”). It’ll be a lot of work at first, but eventually you can automate that business to provide passive income. Finally, once your business is earning enough money and no longer needs much input from you, you can retire and start living like a millionaire.
The first step in Ferriss’s process is to identify what you would do if you didn’t have to spend your time working. This step also involves identifying—and overcoming—the fears that hold you back from living your dreams.
To begin, picture what your new lifestyle will look like. Ferriss says you should imagine your dream lifestyle, then put those dreams on a timeline of three, six, or 12 months. He calls this process dreamlining.
First, list five items for each of the following: things you want to have, things you want to do, and things you want to be. Make these as specific as possible. For example, don’t say that you want to “travel”—write down the actual places you’d like to visit and what you want to do there. Once you have your 15 dreams written down, go back over the list and choose your top four.
(Shortform note: As Richard Rumelt explains in Good Strategy/Bad Strategy, having a limited number of clear and specific goals narrows your focus, which helps you direct your attention and resources effectively. If you have too many goals, or if your goals are too vague, then your efforts to reach those goals will be unfocused and ineffective—it would be like trying to get stronger by doing a dozen different exercises one time each. While Good Strategy/Bad Strategy is a business guide rather than a lifestyle guide, the principle of focusing your efforts applies whether you’re trying to build a business or improve your personal life.)
Next, calculate how much money you’d need per month in order to do all four things you chose, then increase that number by 30%. This will give you your target monthly income, with a built-in buffer against unexpected expenses.
How Much Do You Really Need?
Ferriss is urging you to live a balanced life: Instead of pushing to make as much money as possible, figure out how much money you need and how you’ll enjoy your life once you have it. Robin Sharma’s fable The Monk Who Sold His Ferrari...
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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...
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:
1. Treat traditional retirement as a back-up plan. Instead of working towards retirement as an end goal, work...
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...
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...
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.
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...
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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...
“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 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:
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...
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:
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:
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...
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...