How to Escape Corporate Shackles
Being rich is often defined as how much money one has in the bank account. In The 4-Hour Work Week, Tim Ferriss offers a fresh perspective; cash flow and mobility are what matters. Through the "DEAL" process, he explains how to escape corporate shackles and join the "New Rich".
D for Definition
Money is multiplied in practical value depending on the number of W’s you control in life: what you do, when you do it, where you do it, and with whom you do it. This is the “freedom multiplier.” Having options is the real power, and to have them, you need to replace some of your assumptions.
10 Rules that Change the Rules
If everyone around you is defining and solving a problem one way and the results are subpar, it's time to do it differently. Don’t follow a model that doesn’t work. If the recipe sucks, it doesn’t matter how good of a cook you are...
I. Retirement is worst-case scenario insurance. Retirement as a goal is flawed because it relies of the assumption that you dislike what you are doing during the most physically capable years of your life. In addition, retirement is a utopia for most people. Once you turn 65 and stop working you realise that doing nothing all day is actually quite boring.
II. Interest and energy are Cyclical. The typical career is unsustainable: doing the same thing for 8+ hours each day until you break down or have enough money to stop. The New Rich recognise the need for alternating periods of activity and rest. By working only when you are most effective, life is both more enjoyable and more productive.
III. Less is not laziness. Doing less meaningless work, so that you can focus on things of greater personal importance, is not laziness. This is hard for most to accept because our culture tends to reward personal sacrifice instead of personal productivity.
IV. The timing is never right. For all of the most important things, the timing always sucks. Conditions are never perfect. If it’s important to you and you want to do it “eventually,” just do it and correct course along the way.
V. Ask for forgiveness, not permission. If it isn’t going to devastate those around you, try it and then justify it. People—whether parents, partners, or bosses—deny things on an emotional basis that they can learn to accept after the fact.
VI. Emphasise on strengths, don't fix weaknesses. The choice is between multiplication of results using strengths or incremental improvement fixing weaknesses that will, at best, become mediocre. Focus on better use of your best weapons instead of constant repair.
VII. Things in excess become their opposite. This is true of possessions and even time. The New Rich lifestyle is therefore not interested in creating an excess of idle time, but rather using free time positively, i.e. doing what you want rather than what you feel obligated to do.
VIII. Money alone is not the solution. "If only I had more money" is the easiest way to postpone the intense self-examination and decision-making necessary to create a life of enjoyment. Deep down we all know that the rat race is an illusion, but with everyone participating in this game of make-believe, it's easy to forget.
IX. Relative income is more important than absolute income. It's important to take the variable time into account when looking at income. If Bob and Rob both earn $100,000 per year but Bob works 60 hours per week while Rob only works 20 hours, Rob is richer.
X. Distress is bad, eustress is good. Distress refers to harmful stimuli that make you weaker, less confident, and less able. For example, destructive criticism and abusive bosses. Eustress, refers to stress that is healthful and the stimulus for growth. For example, role models who push us to exceed our limits, physical training, and risks that expand our sphere of comfortable action. The trick is telling the two apart.
To conquer fear we first have to define fear. Usually what we fear is never as bad as we make it seem in our mind. Uncertainty and the prospect of failure can be very scary noises in the shadows. Most people will choose unhappiness over uncertainty.
"Set aside a certain number of days, during which you shall be content with the scantiest fare, with rough dress, saying to yourself the while: Is this the condition that I feared?” — Seneca
Fear comes in many forms, and we usually don’t call it by its four-letter name. Fear itself is quite fear-inducing. Most intelligent people in the world dress it up as something else: optimistic denial.
Often, we suffer more in imagination than in reality.
Doing the unrealistic is easier than doing the realistic. It’s lonely at the top. 99% of people in the world are convinced they are incapable of achieving great things, so they aim for the mediocre. The level of competition is thus fiercest for “realistic” goals, paradoxically making them the most time and energy-consuming.
E for Elimination
“Focus on being productive instead of busy.” — Tim Ferriss
Effectiveness is doing the things that get you closer to your goals. Efficiency is performing a task in the most economical manner possible. Being efficient without regard to effectiveness is the default mode of the universe. Don't fall into that trap
Doing something unimportant well does not make it important. Requiring a lot of time does not make a task important. What you do is more important than how you do it. Efficiency is important, but it is useless unless applied to the right things.
Being busy is a form of laziness. Being overwhelmed is often as unproductive as doing nothing. Doing less by being selective is the path of the productive. Focus on important few and ignore the rest. Therefore, a not-to-do list is as important as a to-do list, if not more!
Boost Your Productivity
1. Parkinson's Law: work expands so as to fill the time available for its completion.
2. Pareto principle: for many events, around80% of the effects come from 20% of the causes.
Combining them will boost your productivity through the roof: identify the few critical tasks that contribute the most to your goals and schedule them with very short and clear deadlines.
Cultivate Selective Ignorance
"Information consumes the attention of its recipients. A wealth of information creates a poverty of attention." — Herbert Simon
Ignorance may be a bliss, but it is also practical. Learn to ignore information and interruptions that are irrelevant, unimportant, or unactionable. Most are all three.
You are the average of the five people you associate with most, so do not underestimate the effects of your pessimistic or unambitious friends. If someone isn’t making you stronger, they’re making you weaker.
A for Automation
The central idea is that you should never automate something that can be eliminated, and never delegate something that can be automated.
5 Keys to Successful Automation
1. Refine rules and processes before adding people. Using people to leverage a refined process multiplies production; using people as a solution to a poor process multiplies problems.
2. Cash flow and time are the two currencies with which anything is possible and without which nothing is possible.
3. Filling demand is easier than creating demand. Don’t create a product, then seek someone to sell it to. Find a market then develop a product for them.
4. Look at the customer as an equal trading partner and not as blessing that needs to be pleased at all costs. If you offer an excellent product at an acceptable price, it is an equal trade.
5. Prevent problem customers from ordering in the first place instead of wasting your time dealing with them.
L for Liberation
While entrepreneurs have the most trouble with automation, since they fear giving up control, employees get stuck on liberation because they fear taking control.
1. Being able to quit things that don’t work is integral to being a winner.
2. You cannot be free from the stresses of a speed- and size-obsessed culture until you are free from the materialistic addictions, time-famine mindset, and comparative impulses that created it in the first place.
3. Too much free time is no more than fertiliser for self-doubt. That is why Tim Ferriss discards traditional retirement in favour of regular mini-retirements (1-6 months). Subtracting the bad does not create the good. It leaves a vacuum. Decreasing income-driven work isn’t the end goal. Living and becoming more is.