How to Escape the 9-5 Grind for Good | Tim Ferriss’ Proven Strategy in 20 Minutes

Hello, Believe Nation! I started the Mentor Me series with the goal to learn from people who've done a lot more than us, who's— who've had great success, and try to hang around them just a little bit longer so that some of their mindsets, motivations, attitudes seep into us to help us become the best version of ourselves. So today we're going to learn from Tim Ferriss about The 4-Hour Workweek. Mentor me, Tim.

Life doesn't have to be so hard. It really doesn't. Now, if you had told me that 3 years ago, I wouldn't have believed you. But most people, my past self included, have resigned themselves to 9-to-5 grind in exchange for sometimes, although increasingly less and less, relaxing weekends and the occasional 1-week, certainly no more than 2-week vacation. I came to realize that income really has no practical value without time. Here are a few simple steps you can take to establish escape the rat race entirely, not just win it. One of the first steps is the process of elimination. So to start, you need to consider something called Pareto's Law, more commonly known as the 80/20 principle. Because in order to work less and not have everything fall apart, you'll have to quantify the 20% of activities that are producing 80% of your desired outcomes. Also, take that time to determine the 20% of activities and people who are consuming 80% of your time. Use this principle for everything: customers, work tasks, but also for personal chores, even for friends. The goal here is twofold. Number one, to find your inefficiencies in order to eliminate them. And then secondly, and this is just as important, to find your strengths and those critical few tasks so you can multiply your output. Working every hour, every minute from 9 to 5 with some type of fidget isn't the goal. It's simply the structure most people use. It's actually a legacy from a time that has already been obsoleted. In a knowledge economy, the more important thing is to shift from presence to performance, cut out static, all the things that consume time and income without contributing back, and focus on the critical few. You'll find that very few things matter. Another critical step, and a real complement to elimination, is what I call the low information diet, or cultivating selective ignorance. Keeping abreast of all the new developments in any field will consume all of your time. It'll be all input and no output. You can't possibly digest all that information. So a more effective approach is to try to catch up when need be, as opposed to keeping up at all times. A big part of selective ignorance is learning to let things wait. For example, email. So email is the single largest acceptable interruption in modern life. It's a very convenient way of simulating forward motion without accomplishing anything. It shouldn't be a workspace, it's a tool. And one of the easiest methods I've seen for controlling email, and one that's become quite popular in Silicon Valley, is setting up a simple autoresponder, much like a vacation autoresponse, that says something like the following: Dear all, in an effort to actually get work done, I'm testing a new email policy. I'm checking and responding to email only twice a day at 11 AM and 4 PM Pacific time, or whatever your time zone happens to be. If you need a response before one of these two times for anything urgent, please call me on my cell phone. Thanks for understanding this move to greater effectiveness and efficiency, whatever your name is. This gives you the breathing room, finally, to single-task and focus on completing the mission-critical tasks, the critical few, from start to finish without interruption. The third important tool I'd like to mention, and one of my personal favorites, is Outsourcing Life. To get started though, we first need to replace the very obsolete concept of annual income, which is a very deceptive metric with hourly income. And people are generally extremely hesitant to delegate or outsource because they feel they can do something free themselves. This is very inaccurate. So let's start with a very basic calculation of hourly time. If you make, let's say, $50,000 per year, you cut off the last 3 zeros, that leaves you with 50, and you divide that in half and you get 25. So you make $25 an hour. This is assuming you get 2 weeks off per year and you're working 40 hours per week. So let's just say on the very very high end that you can hire a personal assistant at $30 per hour to handle one workday of 8 hours. So your cost per hour is then $5. So his or her $30 minus your $25. That means $40 for a full 8-hour day of freedom. So this also means that you can take a 3-day weekend every week and it will cost you $40 per week. I hire virtual assistants around the world which only takes a few hours to help me with just about everything. From business research to reading email, cutting hundreds of emails down to 4 or 5 that I actually have to deal with, to travel, product development, purchasing, planning parties, even online dating. There are a lot of unorthodox and creative uses. Personal outsourcing is only limited by your imagination, and the return on investment is astounding—400%, 500%—even for someone who makes $30,000, $40,000 a year. It's smart to focus on getting things done, but it's only possible when you actually set your not-to-dos list. So once we remove the constant static and the distraction and focus on the critical few, and there really just aren't that many. So I hope you enjoy the book, and just remember that outside of the law and science, all the rules we follow are rules we set ourselves. So set yourself up to win and choose your own rules.

Timothy, how do I get a 4-hour workweek? Is that possible?

The 4-hour workweek is possible, but you need to completely unplug and reset. And the reason that's necessary is because there is an epidemic, and I do mean epidemic, in this country of information abuse and information addiction, where people have come to believe that checking email 200 times per day, having a BlackBerry to your head or in your hand while you're at dinner or on the subway or in your car or with your friends is the path to becoming more productive and more successful. You mean it isn't? It isn't because giving everyone around you, every person in the world, immediate access to you is inviting interruption and inviting minutia to completely invade your life, which is happening to everyone. And— Did it happen to you? It did happen to me. I had no intention of writing this book, but from 2000 to 2004, I was working at startups in Silicon Valley. I started my own, I was CEO, and I worked from 7 AM to 9 PM every day. I checked Outlook hitting send/receive 100 to 200 times per day like a rat with a cocaine pellet dispenser. Slept under my cubicle, sent emails on Thanksgiving to prospects. It was a depressing scene and it's a very unfortunately common scene. And I think everyone is at a point of overwhelm. There is more information than we can possibly organize. Time management is dead. There's a—

How do you turn that around?

The way you turn around is you have to completely unplug and reset. That means you need to take a step back, forget about what people expect you to do, forget about what's popular, and really look at what works and what is consuming your time. So there are 4 steps. There's definition, elimination, automation, and liberation.

Definition is simple. First, you need to define your ideal lifestyle.

What do you want to be doing from when you wake up to when you go to sleep? And so what do you want to have? What do you want to be? What do you want to do? And how much does that ideal lifestyle cost? And that becomes your target. Elimination is simple. It's getting rid of everything, all the static, all the noise, all the interruptions, all the micromanaging, all the people possible that interfere with getting you to that ideal lifestyle. The third, automation, is about taking the few remaining tasks tasks that are important but time-consuming and either delegating, automating, or somehow outsourcing them. So, in my particular case, I have an army of MBAs in India, about 25 of them who work for $4 an hour and take care of tasks that would otherwise consume hundreds of my hours. And then the last step, liberation, is about the final ingredient in lifestyle design which is mobility and then also how to use the time once you create it which is very difficult for most people. Okay.

This is fascinating, but that's the point. It is difficult. I mean, how do you put the BlackBerry down? How— aren't you worried that you're not gonna make as much money, that you're gonna lose clients? Do you have statistics that show that that's not the case?

I have statistics that would absolutely make your head spin. So if you're interrupted by email and phone, there was an experiment done at King's— King's College, for example, that showed that people who were stoned scored 6 points better on an IQ test than people who were interrupted by email and phone. Wow. And that— Good to know. Good to know. 26% of people in the American workforce are on the verge of a nervous breakdown. The system is not working. So it's not a question of if I should do this, it's a question of when. It is the only real alternative. So one simple step that people can take, a baby step to prove the concept, is to simply use an autoresponder, set up an autoresponder that tells everyone who emails you I will be checking email twice a day. That's a great idea. At 11 and 4 PM. Uh-huh. If you require a more urgent response before one of those two times, call me on my cell phone.

Okay, if I start losing customers, I'm gonna call you, Tim.

You can call me. Okay. What's going to happen instead of losing customers is you'll get more done in the next 48 hours than you would in the next two weeks.

So a muse, as defined in The 4-Hour Workweek, as I use it in a business context, is any business that provides an automated source of income or cash flow. And I think it's important important for people to satisfy their, their financial needs before striving to address all these other needs because it really is a valuable flexible currency. And ultimately the end goal is to spec out what you want to do, what you want to be, what you want to have, work backwards from a target monthly income number, design a business to support that and provide that, then minimize the number of moving pieces, automate it, and then you have, I suppose, what most people would consider complete freedom in the form of options left, right, and center. You evaluate the income you need by taking all of these various things that you would defer for retirement, defining them very clearly, whether that's— let's just take for instance Aston Martin DB9, ski chalet in Colorado for a few weeks of the year, etc., etc. Even if that seems utterly unattainable, but all the things that you would save for retirement if you had $500,000, $1 million, whatever.

Then you look at how much that would actually cost, let's say, to finance on a monthly monthly basis.

That could be through a car loan, it could be through a purchase, whatever it might be. And then you look at, let's say, the top 2 or 3 things in the to-do and to-have categories, and you add them up to arrive at a target monthly income. And it can be extremely inexpensive. I mean, for the cars, the trips, and all that, it very seldom costs more than $75 grand a year. Very seldom. And that is liberating when people realize that. Then the trick is, Working backwards with that goal in mind to find a business that provides that in the fewest numbers of hours of input as possible. You can turn many different types of products or services into muses, but some things are easier than others. Products tend to be easier than services because services tend to have more manual component at some level. Secondly, and customer support— customer support issues. In terms of margin, I like to encourage people to aim for a retail-like margin, which would be an 8 to 10x markup from cost of goods. By cost of goods, I'm really just referring to the physical goods. I mean, you can look at fixed and variable costs, but there's no need to get too fancy. I mean, really it is my cost of producing 1,000 units, let's just say, on a per-unit basis. But I encourage people to sacrifice margin in the beginning during testing. This is very important. So it might be— That's something we can discuss separately, but in effect, to get a lower per-unit cost, you don't want to stock up on 1,000 units of a product you've never sold before. It's a much better idea to prototype, maybe dry test, then only at that point do a small batch run of the product. Even if you're only making 2 cents a unit, as long as you're not losing money, you want to test and not end up with an entire warehouse full of product you can't move. Yeah. And I think that in the beginning, it pays as long as you're not losing money, even if you're losing a small amount. To test effectively so that you know when you scale you'll have demand and be able to fill that demand effectively. Amuse and experimentation testing, whether that's defining the market, identifying the cost per acquisition potentially for a customer, product design, prototyping, all that can be done while you still have a full-time job. And I discourage people from just cutting all ties and losing full-time income to focus on a business. You don't have to make that leap. So people tend to think in terms of employed or entrepreneur, employed person, employee or entrepreneur. I think that there's a broad spectrum and you can very slowly and methodically move from one to the other.

And it doesn't mean that you have to end up a full-time entrepreneur.

You can still keep your job and have awesome side income.

I mean, I'm not gonna name names, but I'm pretty sure you and I both know a guy who, at the time at least, this was a few years ago, worked at Google and was selling millions of dollars through Shopify.

And he did both very comfortably.

So I don't think you have to choose necessarily between one and the other.

What are some of the real ways that somebody can work from— because I used to work in, at NEC, 115,000-employee place. You had to go to work at 9, you had to wear a suit, you know, which is why I wear one on this show, because it reminds me that this is about work, right? How do you move from that world into the world where you're working very little and getting very high value for the work you put in and outsourcing everything else?

So I think the second piece that you brought up is very important, getting very high value for the work you put in. So, ever since the book came out, there's been this gallery of people who call me a hoax or whatever that might be. And I think the main point that many of them are missing because they haven't actually taken the time to look at the book or to read the blog is that the book is not literally about everyone working 4 hours a week. It's about decreasing the number of inputs and increasing the number of— or the quality and quantity of output, right? All that means is that as a true entrepreneur in the sense that J.B. Say originally coined the term, you're taking resources from an area of low economic value and shifting them to an area of high economic value. So what are the practical examples? The first Caveat is that it does not need to include outsourcing. So the two things that I get the most media play from are checking email, let's say, twice a day, and then personal outsourcing. You could have— you could completely ignore both of those things and still— those are two of 16 chapters— and it wouldn't in any way invalidate the premise of the book in any way. But— so some practical tools.

Just reiterate then what the premise of the book is.

So the premise of the book, the premise of the book, I would say there are two premises. The first is that the objective is not busyness. So massive action without clearly defined objectives is a form of laziness. And secondly, that the deferred life plan, so to speak, that is a retirement-based life plan long-haul career planning, after which you redeem all the experiences you want to have, the possessions you want to own, is fundamentally flawed. And I don't think— it's very difficult for people to argue with the logic. It's easy to attack me. "OK, he's 30 years old, doesn't have any kids.

What does this guy know?" Well, we're accused of being too nice to our guests, so Robert and I have decided we are gonna attack you. Yeah, attack me. But then we read about the kickboxing stuff with Deborah.

Right, so— you know. So— So we let the chat room do our dirty work.

Yeah, you let the chat room do the dirty work.

And that's fine.

I mean, if people want to attack me, if we all had the same opinion, the world would be a very boring place. But let's just take personal outsourcing as an example. I can't do it. I have a boss. I'll get fired. Okay. First of all, I don't distinguish between work or business and personal time in so much as if you're misspending that time, whether it's on household chores on the weekend when you've put in 80 hours from Monday to Friday, or checking email to simulate forward motion as opposed to defining your measurable objectives. Those are both wastes of time. So if you have a job and there's absolutely no way you can apply outsourcing that job, which we can question in a second, that still means— let's say your son has a birthday party on Sunday. He wants the equivalent of this season's Tickle Me Elmo, which is impossible possible to find. Rather than spending your entire Saturday going from store to store over, let's say, a period of 5 hours to find the toy, you could call or email AskSunday. Go to askSunday.com and for $40 to $50 a month have 30 inquiries. This would be one. You call them, you say, "Here's my zip code. Call every toy store within a 10-mile radius. Find this toy, make a reservation or purchase it using my credit card and have it held behind the counter. Call me when it's ready, tell me where to pick it up. And that would save you 4 to 5 hours, right? So let's just say that you make $50,000 a year. There are a number of ways you can go about it, but an easy way to approximate your per-hour income is if you work 40 hours a week and get 2 weeks of vacation a year is to cut off the last 3 zeros and chop that remaining number in half. So that would mean that if you make $50,000 a year, you make roughly $25 an hour. An hour. Okay, so if you can for $40 get let's say 30 inquiries, this one inquiry alone on a weekend saves you 4 to 5 hours. Well, that's let's say $100 to $125 profit in time currency that you've gained. And the goal is not again to get from 80 to 4 hours. I don't believe and never claim that someone can do that overnight. And most people, if they enjoy their work would never want to get to 4 hours. So the objective is to spend time on the things that are most profitable or most enjoyable. And for some people, let's say those are pastors, writers, teachers, it's not being inactive. That's never the objective. I work my ass off on things that I care about. I spend— I'm a very, very busy guy, as you know. [Speaker:JASON] Yeah. [Speaker:CHRIS] But on things that I choose to spend my time on. Those people, let's say pastor who suffers from, let's say emotional fatigue, sympathy fatigue, his objective will simply be to reduce the volume of work so that he can be most effective. And whether it's using Ask Sunday or simply training yourself to check email at set times so that it doesn't become a reactive, disorganized approach.

Thank you guys so much for watching. I hope you enjoyed. I'd love to know, what did you think about the video? What was the one thing that you learned the most from this video that you can apply to your business? It's— this is one of my favorite books of all time, and so I hope that some of the lessons that have come out in this video have helped you as well. I highly recommend going out, checking the book as well if you haven't already. So whatever was the most important lesson that you learned, please leave in the comments below. I'm gonna join in the discussion. I also want to give a quick shout shout out to Jason J. Rice Fonseca for picking up a copy of my book. Again, I really appreciate that, Jason. Feeling the love. You guys want a chance at a shout out in a future video, make sure to grab a copy of the book and email in your receipt so we can keep track. Thank you guys so much for watching. I believe in you. I hope you continue to believe in yourself and whatever your one word is. I'll see you soon.