In late 2007, someone referred a book to me that they considered “right up my alley.”  The book was The Four Hour Work Week, by Tim Ferriss. My initial response was, “no possible way” as there is no question I was working WAY more than four hours a week and couldn’t imagine it any other way.

I was running a mortgage brokerage at the time, leading a handful of people in an industry that was being clamped down on by regulators, I was still speaking professionally on the side, and we had just had our third child (a whoops baby). I often say I passed out when Davis was born and then woke up 4 years later. Lack of sleep, crazy schedules during the day, financial pressures — all of it was spelling disaster for my mental well-being.

 

Ruined for “Normal” Work

The book challenged some beliefs I had about the definition of working smart vs working hard. After all, I had been raised by Baby Boomer parents. My Dad’s idea of hard work was a long day of work, similar to most Boomers. While not afraid of a “hard day’s work”, I was also hoping there would be a day where hard work would be exchanged for really purposeful, profitable work that allowed me to work a couple hours a day and spend the rest of the day doing what I enjoyed.

This book blew open my mindset of how much time could really be worth and how to maximize the value of time using concepts like elimination and automation. Within 2 years I had closed the mortgage company, and had devoted the majority of my time to writing and speaking. I was officially ruined for “normal” work and to this day have a hard time justifying a 30-40 hour work week.

When I realized how easy it was to make $3,000 in an hour, I was sold.

 

The Concept of New Rich and Lifestyle Design

It wasn’t even the 10th page and Ferriss had identified a subculture called The New Rich, those who “abandon the deferred-life plan and create luxury lifestyles in the present using the currency of the New Rich: time and mobility.” He wrote about their lives in the context of Lifestyle Design, something that required both art and science.

Part of the reason so many of my generation resonated with the book was it challenged the logic of working 70-80 hours a week to make $100,000 compared to making $50,000 and only working 20-30 hours a week. The New Rich, Ferriss outlined, figured out ways of automating what they do, outsourcing some of the more menial tasks, and focusing on the items that generate the most revenue.

Ferriss suggested that people didn’t actually want to wait to be millionaires to enjoy their lives, instead they wanted to enjoy the lifestyle that being a millionaire afforded. Ultimately, the idea of time freedom, taking frequent mini-retirements would lead someone down a path of never really  fully retiring because you were living a life that didn’t need to be retired from.

 

Focus on Better Use of Your Weapons, Not Constant Repair

The name of the mortgage company I was running at the time of reading the book was Four Legacies Mortgage. The Four Legacies we promoted were Money Freedom, Time Freedom, Relationship Freedom and Service Freedom. It was a concept taught to me by a super sharp software designer turned real estate investor. The promise of our business model was we would put people in a better position financially when they were done with us than when they started with us. We were experts at helping people do more with their money.

My challenge, at the time, was the Dodd-Frank Act had just been enacted and we were telling more people ‘no’ than we were ‘yes’ as it related to their mortgages. As a result, our monthly bills were sometimes just as much as our closed loan volume commissions. I would often take speaking engagements just to cover the cost of the office and employee salaries.

If you find it somewhat odd that someone who claims to be in the pursuit of Mastery Of Money didn’t realize this was not a great business plan, you’d be as astute as my wife. She would ask me, as I got home from a long, hard day at the mortgage company, “would you rather be speaking?”

By early 2010, I had finally realized that the $3,000 a month in rent that was going into my mortgage space would be better served in a house big enough for a) the family to grow into and b) to build my speaking business from.

I transferred ownership of the mortgage business to one of my associates in exchange for pending commissions on loans to close and went headlong into speaking.

I decided to emphasize my strengths instead of fixing my weaknesses. As a mortgage company owner, the attention to detail was my Achilles heel. The long hours and tedious amounts of paperwork were too much for me to track and stay focused on. What I wanted to do was sell ideas.

 

What My Flexible and Free Life Was Worth

Candidly, I had been told that I was “a thousand dollar speaker” by a professional in the business about 7 years before. My fees had risen to around $2,500-3,000 by that time and have increased since.

Relative Vs. Absolute Income was a mind-bender for me — this concept that Ferriss outlined suggested that absolute income is how much money you make in a year, but relative income takes into account dollars as well as time spent making those dollars.

While I had been astutely focused on absolute income, working my ass off to make more perpetually, I realized that if I could make $3-6,000 a month working two days speaking (and maybe another 2-5 marketing myself), my relative income was significant. My flexibility and freedom were worth so much more than what 13 days in an office could ever bring.

 

The Pursuit of Mastery

A wise speaker I once heard said, “we should all be in the pursuit of Mastery of something.” For me, speaking mastery became an all-out pursuit. I would spend all day just watching the best TED talk speakers, identifying why what they said was so powerful as well as how it was said powerfully. I broke down jokes from comedians, studied body language experts, and worked on mastering using Keynote to create slide decks.

With a drive to increase my rates, increase the amount of business I was doing, and increase my own marketing, I started outsourcing a great deal of the backend detail work just as Ferriss suggested. My Operations Director, Molly Rose, is an integral and brilliant member of my team who has helped automate as many processes as possible with a constant eye towards efficiency (as she, too, loves the freedom and flexibility that the business provides).

 

Creating Efficiencies

Two of the most profound lessons I took from The Four Hour Work Week that have totally ruined me for “normal” work are outsourcing and setting time boundaries.

Ferriss reminds the reader of the Italian economist Vilfredo Pareto, the man who first suggested that 80% of the wealth in Italy was held by 20% of the people. It eventually became known as the Pareto Principle and was applied to everything from the garden (80% of the plants come from 20% of the seeds) to personal productivity (80% of your productivity comes from 20% of your activity).

Therefore, in an effort to create efficiencies, all you must do is focus on the 20% of the activities that generate 80% of your productivity. The rest you can outsource.

And outsource I did to a site called Elance.com (now known as Upwork.com). The folks on Upwork do a majority of the research, graphic design, web support, and sometimes writing that helps me function day to day. (I still write my own blog posts, books, and Christmas letters.)

The second powerful time management and efficiency tool learned from the book is setting time boundaries, known as Parkinson’s Law. Parkinson’s Law states that the perceived complexity of a task is directly related to how long you give yourself to complete it. If you’ve ever had someone call from the road and say they’re going to be at your place in 30 minutes, you know that you can clean your house in 29 minutes or less. This is Parkinson’s Law.

In creating content, I started using Parkinson’s Law to get my project work done faster than I had been able to previously. I would set the clock timer for a specified amount of time and then race the clock to get the work done in that timeframe.

By putting the two ideas together, The Pareto Principle + Parkinson’s Law, what happened was I began focusing on the most important projects and limited the amount of time to stay focused on the project at hand. Compressing time and focusing on the most important items made me even more efficient, thereby making my relative income even greater.

Read, Re-Read, then re-read again.

No matter where you are in the journey to Mastery Of Money, The Four Hour Work Week is one of my favorite, go-to books. It explodes the notion that we all have to work ourselves silly in hopes that one day we can retire in style. Instead, decide that things like automation, elimination, location independence and mini-retirements are important and APPLY THEM TO YOUR LIFE.

It will make a difference, that I promise!