The 4-hour Workweek Series: Defining the New Rich – their goals, objectives, and beliefs

Defining the New Rich

For most, escaping the 9-5 lifestyle is simply a dream that will never come to pass. But for those who do attempt to live like a millionaire without having to be a millionaire first, there is a predictable and repeatable process for breaking the shackles. While it was key that you understand the principles of 80/20 and Parkinson’s Law, it is imperative for you to learn the DEAL to being a part of the New Rich.

In order to take advantage of the shift in the new global economy, we have to unpack the process it takes for a person to enter the strange and unfamiliar world of the New Rich. From here on out, you are going to be a DEAL maker and conveniently this will also serve as the structure of our new workflow. DEAL is an acronym: Define, Eliminate, Automate, Liberate.

Today we are only going to focus on the first step in the personal transformation process: Define.

To be a part of the New Rich we first have to explore the difference between what the New Rich (NR) value as compared to Deferrers (D). A deferrer is a person who works their whole life for the pot of gold called retirement at the end of the rainbow. But retirement is only one objective/goal that differentiates the New Rich from the Deferrer. Let’s look at some of the other key distinctions that Tim elucidates for us:

D: To work for yourself.
NR: To have others work for you.

This subtle difference of who does the work is a real mind bender for someone who works at the office. But let’s keep going.

D: To work when you want to.
NR: To prevent work for work’s sake, and to do the minimum necessary for maximum effect (“minimum effective load”).

One of my favorite quotes by Frederich Nietzsche says something that man uses work as a form of entertainment. You aren’t working because you are simply bored are you?

D: To retire early or young.
NR: To distribute recovery periods and adventures (mini-retirements) throughout life on a regular basis and recognize that inactivity is not the goal. Doing that which excites you is.

Have you ever considered breaking up your retirement years and distributing them across your whole life? This thought alone got me buying a one way ticket to Hawaii the first time I read it. The second time, I went to Barbados to compete in a grueling mountain terrain half-marathon called ‘To Hill and Back’, which happened to be one of my fondest memories. The third time I read it, I bought plane tickets to Mexico for a month long excursion with my family.

D: To buy all the things you want to have.
NR: To do all the things you want to do, and be all the things you want to be. If this includes
some tools and gadgets, so be it, but they are either means to an end or bonuses, not the focus.

Stuff really doesn’t make life better. Case and point: if my newborn son is more entertained by wrapping paper instead of the actual present, chances are that you and I are not all that much different.
D: To be the boss instead of the employee; to be in charge.
NR: To be neither the boss nor the employee, but the owner. To own the trains and have someone else ensure they run on time.

There really is nothing like being the boss. But I really enjoy paying the boss to do what he does best, being accountable to me for the results that I am looking for.

D: To make a ton of money.
NR: To make a ton of money with specific reasons and defined dreams to chase, timelines and steps included. What are you working for?

Money is entirely worthless if you aren’t giving it purpose for being in your life. And this is more than just giving your money a budget or putting it to work through investments. This is about understanding that there are experiences in your life that you want and trading money for those experiences is more important than simply having the money.

D: To have more.
NR: To have more quality and less clutter. To have huge financial reserves but recognize that most material wants are justifications for spending time on the things that don’t really matter, including buying things and preparing to buy things. You spent two weeks negotiating your new Infiniti with the dealership and got $10,000 off? That’s great. Does your life have a purpose? Are you contributing anything useful to this world, or just shuffling papers, banging on a keyboard, and coming home to a drunken existence on the weekends?

I hope you felt that mic drop moment too.

D: To reach the big pay-off, whether IPO, acquisition, retirement, or other pot of gold.
NR: To think big but ensure payday comes every day: cash flow first, big payday second.

I have fretted over this key distinction for a long time. We all want the big payday, but what we all really crave is to know that my income requirements are being taken care of by the cash I made today – and every single day after that.    

D: To have freedom from doing that which you dislike.
NR: To have freedom from doing that which you dislike, but also the freedom and resolve to pursue your dreams without reverting to work for work’s sake (W4W). After years of repetitive work, you will often need to dig hard to find your passions, redefine your dreams, and revive hobbies that you let atrophy to near extinction. The goal is not to simply eliminate the bad, which does nothing more than leave you with a vacuum, but to pursue and experience the best in the world.

The reason that the New Rich and Deferrers diverge so radically in terms of goals and objectives is that they value completely different things and they orient their activity around entirely different beliefs. Conveniently, Tim has has listed 10 beliefs that the New Rich have that differ from Deferrers, and it is these beliefs that will ultimately begin the process of jettisoning a person (you) out of the office:

  1. Retirement Is Worst-Case-Scenario Insurance.
  2. Interest and Energy Are Cyclical.
  3. Less Is Not Laziness.
  4. The Timing Is Never Right.
  5. Ask for Forgiveness, Not Permission.
  6. Emphasize Strengths, Don’t Fix Weaknesses.
  7. Things in Excess Become Their Opposite.
  8. Money Alone Is Not the Solution.
  9. Relative Income Is More Important Than Absolute Income.
  10. Distress Is Bad, Eustress Is Good.

While beliefs and orientations are important steps in Defining your own personal transformation, in the next post in this series we are going to continue to Define ourselves by exploring our fears and re-awakening the excitement that comes with pursuing our dreams.

The 4-hour Workweek Series: Parkinson’s Law, or How Do I Get Things Done Faster

How would you listen to this blog post in double time?

While most people can conceive of the how the 80/20 rule works and most people understand how to implement the idea into their daily lives. There are other things that Tim Ferriss covers in his book that are not altogether as simple to put into practice. That’s part of why we decided to take The 4-hour Workweek and break down the concepts in the book to a series. For this next idea that Tim presents, we need to re-think how we use our time. At least, how we interpret which actions to take as we travel through time.

As you might already know, you have very little control over time. Time continues whether you like it or not. But you already knew all this. So then, let me ask you, how do you use time? If you are scratching your head, let’s try this another way: when you are working to get things completed, how do you use time to your advantage? If you are still scratching your head, that’s not a problem – what I have to say next will probably change your life.

There is a little known fact of time and it goes like this: work, the things that we have/want/must do, expands to fill the time given. That’s right, you read that right. Work expands to fill the amount of time we give it. Say you gave your self thirty seconds to read this blog post, you would read blips of it in thirty seconds. Say you gave your self thirty years to study this post; the complexity and amount of work you will have done in that time will have grown to obscene levels.

But let’s put this into practice real quick, that’s what make this series really fun. I hope that you still have that 80/20 list I told you to write up last time. If you don’t then no worries. What you are going to do is this, take a piece of paper and fold it in half three times. That’s right, half that way, then half the other way, then half the other way again. This should leave you with a small piece of paper. Now, I want you to write the three most important things that you need to get done tomorrow on it. That’s right, just three.

Take a moment to write the three most important tasks that you need to accomplish tomorrow.

I am going to assume that you wrote all three of those things down. Now, here is where the trick comes in. Work doesn’t like to live in a vague world without deadlines. And when you wrote down your three things, you probably didn’t write what time you have to be finished with those three things. Did you? Okay, so what you are going to do is this, next to each of those three items that have to be completed tomorrow, write down the time they need to be done by.

So you might be scratching you head saying what is this going to do for me? Look down at your list, you have established the three most important things that you need to do tomorrow and the time that they need to be done by. To see Parkinson’s Law in action, I want you to reschedule all of the deadlines for midnight tonight. What would you need to prioritize, what would you need to say no to, what would absolutely have to be accomplished in order to get all of those things done by midnight? Now take this thought experiment one step further. I want you to reschedule all tomorrow’s most important tasks and I want them done in the next hour.

The question isn’t can you do your most important tasks in a hour; the questions is how are you going to get those three tasks done in the next hour?

If this tickled your thought process, you should make a habit of limiting resources that you extend to your work. And in more ways than just time. If you caught on to why we folded the paper down to a smaller size, than you saw Parkinson’s Law in action. We limited the workspace and you had to limit what you wrote on it. You can do this with plates, bowls and cups to limit portions of food. You can limit the amount of technology you carry with you, thereby limiting the complexity of work you can accomplish as you go about. You can carry only cash in your wallet and no debit cards to limit the amount of expenditures you can make. You can limit the number of books in your house. Limit the amount of clothes in your closet. Limit the amount of friends you have on social media.

The point is, unlimited is not helpful and most times it is really counter-productive. When we conscientiously limit the length of time we use, the number of tasks we are performing and the tools to implement our productivity, a strange effect can be seen: the most important work happens in the least amount of time with the least number of tools.

What would your work day look like if you did only the most important in less time?

What if you did it in even less time? What if the game was to see how little time is needed? And what if you took a 40 hour work week and consolidated the most important tasks to four hours a week, what would you do in those 4 hours?

The 4 Hour Workweek Series: What to work on from 9-5

What are you working on?

When I started this post, I thought that I was going to make it about how Tim Ferriss is the typified example of The Sovereign Individual. But as I went down that road, I realized that it would be better for you to draw those conclusions and not me.

When I restarted writing this post I decided to break down the concepts that I have learned from the 4-Hour Workweek into a series of thoughts that will help me convey what I learned. Hopefully it will make it easier for you implement those ideas.

The first place that I want you to start is by challenging an assumption that we all have. It isn’t your fault if you still have this assumption, most people continue to struggle with escaping this assumption. I struggle with it all the time too.

Do you need 8 hours each day to do your work?

This basic assumption, which is a “dinosaur” of the previous industrial age, continues to run rampant in this world. For most, I would assume that they would answer that 8 hours a day isn’t enough to get everything done.

Today I want you to consider this assumption and how I want you to approach reconsidering it is in the following fashion.

Take a piece of paper, draw a line dividing it in half, and I want you to write down all the things that you would say are the responsibilities/tasks/roles of your job. And if listing every one takes two pieces of paper, take two. But I want you to be absolutely clear with your self on what your work is really about.

Do not go one step further into this idea until you have finished your list.

Okay, I am going to assume that you were good and you actually did the assignment. You now have a nearly exhaustive list covering everything that you call your work. Congrats, doing this one step will clarify more about your world view than almost anything I could tell you to do.

Now, you have the list and you are ready for the “big-tada” of the post. What I want you to do is I want you to count the entire list. How many entries are there? If you forgot a couple along the way, include them; ultimately, I want you to be able to write down how many roles/tasks/responsibilities you have. Do you have 10 or do you have 100?

Okay, so take that number (10 or 100) and I want you to times it by 20% (0.2). In the case of 10 you would have 2 and in the case of 100 you would have 20. If you have a fraction, round down. But you get the idea, we are determining the most important 20% of your work. To do that, I want you to circle the 20% of roles/tasks/responsibilities that are a must for you to continue getting paid. Once you are done circling those items, I want you to re-write them on the other half of the sheet of paper.

For now, there isn’t much that you need to do other than be aware of what this 20% as you go about your day today. I want you to carry this list with you, and look at it over lunch, or more often if possible, and I want you to ask your self:

Am I focused on the 20% that matters more, or the 80% that matters less?