THE 4-HOUR WORK WEEK by Tim Ferris [BOOK SUMMARY]

Transcription

1 THE 4-HOUR WORK WEEK by Tim Ferris [BOOK SUMMARY] teaches techniques to increase your time and financial freedom giving you more lifestyle options. By automating a passive income and liberating yourself from unproductive tasks you can live the lifestyle of the new rich one defined by having, doing and being what you want. D Is for DEFINITION The end goal is not to save for a long retirement, it is to take mini retirements throughout life. Enjoy it while you re young Aim for location and time freedom to do the things we want. Doing less is NOT lazy. Work smarter, not harder. Ask for forgiveness not permission. Timing is never right just do it Emphasise strengths don t worry about the weaknesses. e.g. Reducing a cost by $100 is good but that s all it can be reduced by ($100). The potential upside is potentially infinite (a lot more than $100). Measure relative income not actual income. When working for yourself, even if your worst case scenario came true (unlikely) you can still recover quite easily. The potential upside from taking a risk is huge and can be quite probable i.e. Little risk for huge reward. The cost of not doing something can be much bigger. Aiming for the unrealistic is easier than the realistic. There s more competition aiming for realistic goals. Define what you want to have, who you want to be and what you want to do so you have define a Target Monthly Income (TMI) and Target Daily Income (TDI) for your work. What do you need to earn to have and do all the things you want? It s less than you think 1 of 5

2 E is for ELIMINATION Be effective, not just efficient. Productive, not active. 80/20 80% of outcomes come from 20% of sources. e.g. In customer service, 80% of headaches come from 20% of customers. Parkinson s Law - Parkinson s Law dictates that a task will swell in (perceived) importance and complexity in relation to the time allotted for its completion. Restrict how much time you have to complete a task. Use in conjunction with 80/20 rule. Go on a low information diet. Eliminate time wasters, time consumers and empowerment failures. Train others to not waste your time. is better than meetings. Limit conversation time. Schedule s to send early morning or late at night to avoid conversations developing. A is for AUTOMATION Outsource life and business activities to virtual assistants. Here are some resources: 1. Eliminate before you delegate so you don t waste their time and your money. 2. Even if there is a cost to this (costing more per hour than you earn) the time saving can be very beneficial if you outsource the right things Look at your to-do list what has been sitting on it the longest? Give this to your virtual assistant (VA). Each time you are interrupted or change tasks, ask, Could a VA do this? Examine pain points what causes you the most frustration and boredom? Which 20%? Our goal is simple: to create an automated vehicle for generating cash without consuming time. 2 of 5

3 Finding the Muse: To narrow the search field further, our target product can t take more than $500 to test, it has to lend itself to automation within four weeks, and when up and running it can t require more than one day per week of management. STEP ONE: Pick an Affordably Reachable Niche Market It s easier to satisfy demand than to create it. Be a customer of the market so you understand need and habits. Smaller markets are cheaper to reach and it s easier to charge a premium. 1. Which social, industry, and professional groups do you belong to, have you belonged to, or do you understand, whether dentists, engineers, rock climbers, recreational cyclists, car restoration aficionados, dancers, or other? 2. Which of the groups you identified have their own magazines? Pick the two markets that you are most familiar with that have their own magazines with full-page advertising that costs less than $5,000. There should be no fewer than 15,000 readers. STEP TWO: Brainstorm (Do Not Invest In) Products The Main Benefit Should Be Encapsulated in One Sentence. It Should Cost the Customer $50-$200 USD. 1. Higher pricing means that we can sell fewer units and thus manage fewer customers and fulfil our dream lines. It s faster. 2. Higher pricing attracts lowermaintenance customers (better credit, fewer complaints/questions, fewer returns, etc.). It s less headache. This is HUGE. 3. Higher pricing also creates higher profit margins. It s safer. I (Tim Ferris) personally aim for an 8 10x markup, which means a $100 product can t cost me more than $ It Should Take No More Than 3 to 4 Weeks to Manufacture. Determine the per-unit costs of production for 100, 500, 1,000, and 5,000 units. It Should Be Fully Explainable in a Good Online FAQ. OPTION ONE: Resell a Product: Purchasing an existing product at wholesale and reselling it is the easiest route but also the least profitable. It is the fastest to set up but the fastest to die off due to price competition with other resellers. OPTION TWO: License a Product. OPTION THREE: Create a product: It is possible to hire mechanical engineers or industrial designers on to develop a prototype based on your description of its function and appearance, which is then taken to a contract manufacturer. If you find a generic or stock product made by a contract manufacturer that can be re-purposed or positioned for a special market, it s even easier: Have them manufacture it, stick a custom label on it for you, and presto new product. Information products are low-cost, fast to manufacture, and time-consuming for competitors to duplicate. They have quick manufacturing times and huge markup. Being a expert only means being smarter than the customers in your niche market. Aim for a combination of formats that will lend itself to $ pricing, such as a combination of two CDs (30 90 minutes each), a 40-page transcription of the CDs, and a 10-page quickstart guide. Digital delivery is perfectly acceptable in some cases, ideal if you can create a high enough perceived value. 1. How can you tailor a general skills for a niche market? Think narrow and deep. 2. What skills would you and others in your market pay to learn. Learn and then create material to 3 of 5

4 teach. 3. What experts could you interview to create an audio CD? 4. Do you have a failure to success story you could teach others? STEP THREE: Micro-Test Your Products BEST: Look at the competition and create a more-compelling offer on a basic one-to-three-page website (one to three hours). TEST: Test the offer using short Google Adwords advertising campaigns (three hours to set up and five days of passive observation). DIVEST or INVEST: Cut losses with losers and manufacture the winner(s) for sales rollout. Selling digital content: OR Draw the anatomy of your automated business (see below). Work out the cost of each step to calculate profit. You shouldn t be part of the picture. Give outsourced workers the power to make decisions and solve problems without you. This is the only way to make your business scalable. i.e. It can handle 10,000 orders as easily as 10 without you. In the beginning you will have to do more work to find out how to automate the business. Giving customers fewer options results in fewer questions, returns and headaches. Offer basic and premium products. Limit your customers and only deal with the low maintenance ones. Make them part of a VIP club. Don t offer things for free as it attracts time wasters. Use the lose-win-guarantee. 30 day money back guarantees are old. Instead offer If you re not satisfied you get your money back and can keep the product for free. You place yourself at risk but the increase in sales is worth it. Get niche Facebook groups to paste links to your content in the blurb of their page. 4 of 5

5 L is for LIBERATION Increase investment make the company invest in you so it s harder for them to let you go later. e.g. Get the to send you on a course. Prove offsite productiveness call in sick just before you start to make the change more noticeable. Double work output on sick days to prove effectiveness of remote working. Prepare the quantifiable business benefit show with metrics how you were more productive for the business (not on a personal level). Propose a revocable trial period use the phrase does this sound reasonable? Gradually trial longer periods and eventually full time work from home. Take a cash and asset snapshot to work out which assets you can eliminate to save money. Prepare for your tip: 1. Three months out eliminate waste materials. 2. Two months out automate billing with credit cards. 3. One month out redirect mail to a friend, test gotopc. 4. Two weeks out scan and store digital documents of key info e.g. Credit cards, ID and insurance documents. Downgrade phone plans. Book hostel Accomodation a few days out for cheaper rates. 5. One week out decide on work schedule while you re away. Put other belongings into storage. 6. Two days out store car, add thing to tank to store fuel, disconnect battery leads. 7. When you arrive sort health insurances, make booking to view apartments (one month only), go on bus/bike tours of the city. 5 of 5