The 4-Hour Work Week: Escape the 9-5, Live Anywhere and Join the New Rich

1

Cautions and Comparisons

HOW TO BURN $1,000,000 A NIGHT

These individuals have riches just as we say that we “have a fever,” when really the fever has us.

—SENECA (4 B.C.–A.D. 65)

I also have in mind that seemingly wealthy, but most terribly impoverished class of all, who have accumulated dross, but know not how to use it, or get rid of it, and thus have forged their own golden or silver fetters.

—HENRY DAVID THOREAU (1817–1862)

1:00 A.M. CST / 30,000 FEET OVER LAS VEGAS

His friends, drunk to the point of speaking in tongues, were asleep. It was just the two of us now in first-class. He extended his hand to introduce himself, and an enormous—Looney Tunes enormous—diamond ring appeared from the ether as his fingers crossed under my reading light.

Mark was a legitimate magnate. He had, at different times, run practically all the gas stations, convenience stores, and gambling in South Carolina. He confessed with a half smile that, in an average trip to Sin City, he and his fellow weekend warriors might lose an average of $500,000 to $1,000,000—each. Nice.

He sat up in his seat as the conversation drifted to my travels, but I was more interested in his astounding record of printing money.

“So, of all your businesses, which did you like the most?”

The answer took less than a second of thought.

“None of them.”

He explained that he had spent more than 30 years with people he didn’t like to buy things he didn’t need. Life had become a succession of trophy wives—he was on lucky number three—expensive cars, and other empty bragging rights. Mark was one of the living dead.

This is exactly where we don’t want to end up.

Apples and Oranges: A Comparison

So, what makes the difference? What separates the New Rich, characterized by options, from the Deferrers (D), those who save it all for the end only to find that life has passed them by?

It begins at the beginning. The New Rich can be separated from the crowd based on their goals, which reflect very distinct priorities and life philosophies.

Note how subtle differences in wording completely change the necessary actions for fulfilling what at a glance appear to be similar goals. These are not limited to business owners. Even the first, as I will show later, applies to employees.

D: To work for yourself.

NR: To have others work for you.

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”).

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.

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.

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.

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?

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?

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.

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.

Getting Off the Wrong Train

The first principle is that you must not fool yourself, and you are the easiest person to fool.

—RICHARD P. FEYNMAN, Nobel Prize–winning physicist

Enough is enough. Lemmings no more. The blind quest for cash is a fool’s errand.

I’ve chartered private planes over the Andes, enjoyed many of the best wines in the world in between world-class ski runs, and lived like a king, lounging by the infinity pool of a private villa. Here’s the little secret I rarely tell: It all cost less than rent in the U.S. If you can free your time and location, your money is automatically worth 3–10 times as much.

This has nothing to do with currency rates. Being financially rich and having the ability to live like a millionaire are fundamentally two very different things.

Money is multiplied in practical value depending on the number of W’s you control in your life: what you do, when you do it, where you do it, and with whom you do it. I call this the “freedom multiplier.”

Using this as our criterion, the 80-hour-per-week, $500,000-per-year investment banker is less “powerful” than the employed NR who works ¼ the hours for $40,000, but has complete freedom of when, where, and how to live. The former’s $500,000 may be worth less than $40,000 and the latter’s $40,000 worth more than $500,000 when we run the numbers and look at the lifestyle output of their money.

Options—the ability to choose—is real power. This book is all about how to see and create those options with the least effort and cost. It just so happens, paradoxically, that you can make more money—a lot more money—by doing half of what you are doing now.

So, Who Are the NR?

The employee who rearranges his schedule and negotiates a remote work agreement to achieve 90% of the results in one-tenth of the time, which frees him to practice cross-country skiing and take road trips with his family two weeks per month.

The business owner who eliminates the least profitable customers and projects, outsources all operations entirely, and travels the world collecting rare documents, all while working remotely on a website to showcase her own illustration work.

The student who elects to risk it all—which is nothing—to establish an online video rental service that delivers $5,000 per month in income from a small niche of Blu-ray aficionados, a two-hour-per-week side project that allows him to work full-time as an animal rights lobbyist.

The options are limitless, but each path begins with the same first step: replacing assumptions.

To join the movement, you will need to learn a new lexicon and recalibrate direction using a compass for an unusual world. From inverting responsibility to jettisoning the entire concept of “success,” we need to change the rules.

New Players for a New Game:

Global and Unrestricted

TURIN, ITALY

Learn the rules like a pro, so you can break them like an artist.

—PABLO PICASSO

As he rotated 360 degrees through the air, the deafening noise turned to silence. Dale Begg-Smith executed the backflip perfectly—skis crossed in an X over his head—and landed in the record books as he slid across the finish.

It was February 16, 2006, and he was now a mogul-skiing gold medalist at the Turin Winter Olympics. Unlike other full-time athletes, he will never have to return to a dead-end job after his moment of glory, nor will he look back at this day as the climax of his only passion. After all, he was only 21 years old and drove a black Lamborghini.

Born a Canadian and something of a late bloomer, Dale found his calling, an Internet-based IT company, at the age of 13. Fortunately, he had a more-experienced mentor and partner to guide him: his 15-year-old brother, Jason. Created to fund their dreams of standing atop the Olympic podium, it would, only two years later, become the third-largest company of its kind in the world.

While Dale’s teammates were hitting the slopes for extra sessions, he was often buying sake for clients in Tokyo. In a world of “work harder, not smarter,” it came to pass that his coaches felt he was spending too much time on his business and not enough time in training, despite his results.

Rather than choose between his business or his dream, Dale chose to move laterally with both, from either/or to both/and. He wasn’t spending too much time on his business; he and his brother were spending too much time with Canucks.

In 2002, they moved to the ski capital of the world, Australia, where the team was smaller, more flexible, and coached by a legend. Three short years later, he received citizenship, went head-to-head against former teammates, and became the third “Aussie” in history to win winter gold.

In the land of wallabies and big surf, Dale has since gone postal. Literally. Right next to the Elvis Presley commemorative edition, you can buy stamps with his face on them.

Fame has its perks, as does looking outside the choices presented to you. There are always lateral options.

NEW CALEDONIA, SOUTH PACIFIC OCEAN

Once you say you’re going to settle for second, that’s what happens to you in life.

—JOHN F. KENNEDY

Some people remain convinced that just a bit more money will make things right. Their goals are arbitrary moving targets: $300,000 in the bank, $1,000,000 in the portfolio, $100,000 a year instead of $50,000, etc. Julie’s goal made intrinsic sense: come back with the same number of children she had left with.

She reclined in her seat and glanced across the aisle past her sleeping husband, Marc, counting as she had done thousands of times—one, two, three. So far so good. In 12 hours, they would all be back in Paris, safe and sound. That was assuming the plane from New Caledonia held together, of course.

New Caledonia?

Nestled in the tropics of the Coral Sea, New Caledonia was a French territory and where Julie and Marc had just sold the sailboat that took them 15,000 miles around the world. Of course, recouping their initial investment had been part of the plan. All said and done, their 15-month exploration of the globe, from the gondola-rich waterways of Venice to the tribal shores of Polynesia, had cost between $18,000 and $19,000. Less than rent and baguettes in Paris.

Most people would consider this impossible. Then again, most people don’t know that more than 300 families set sail from France each year to do the same.

The trip had been a dream for almost two decades, relegated to the back of the line behind an ever-growing list of responsibilities. Each passing moment brought a new list of reasons for putting it off. One day, Julie realized that if she didn’t do it now, she would never do it. The rationalizations, legitimate or not, would just continue to add up and make it harder to convince herself that escape was possible.

One year of preparation and one 30-day trial run with her husband later, they set sail on the trip of a lifetime. Julie realized almost as soon as the anchor lifted that, far from being a reason not to travel and seek adventure, children are perhaps the best reason of all to do both.

Pre-trip, her three little boys had fought like banshees at the drop of a hat. In the process of learning to coexist in a floating bedroom, they learned patience, as much for themselves as for the sanity of their parents. Pre-trip, books were about as appealing as eating sand. Given the alternative of staring at a wall on the open sea, all three learned to love books. Pulling them out of school for one academic year and exposing them to new environments had proven to be the best investment in their education to date.

Now sitting in the plane, Julie looked out at the clouds as the wing cut past them, already thinking of their next plans: to find a place in the mountains and ski all year long, using income from a sail-rigging workshop to fund the slopes and more travel.

Now that she had done it once, she had the itch.

LIFESTYLE DESIGN IN ACTION

I was done with driving across town to collect my son from childcare only to slide across icy highways trying to get back to work with him in tow to finish my work. My mini-retirement brought us both to live at an alternative boarding school full of creative lifestyle redesigning children and staff in a gorgeous Florida forest with a spring-fed pond and plenty of sunshine. You can easily search for alternative schools or traditional schools that might accept your children during your stay. Alternative schools often see themselves as supportive communities and are exceptionally welcoming. You might even find an opportunity to work at a school where you could experience a new environment with your child. —DEB

• • •

Tim,

Your book and blog have inspired me to quit my job, write two e-books, sky dive, backpack through South America, sell all the clutter in my life, and host an annual convention of the world’s top dating instructors (my primary business venture, third year running). The best part? I can’t even buy a drink yet.

Thank you so much, bro! —ANTHONY

Rules That Change the Rules

EVERYTHING POPULAR IS WRONG

I can’t give you a surefire formula for success, but I can give you a formula for failure: try to please everybody all the time.

—HERBERT BAYARD SWOPE, American editor and journalist; first recipient of the Pulitzer Prize

Everything popular is wrong.

—OSCAR WILDE, The Importance of Being Earnest

Beating the Game, Not Playing the Game

In 1999, sometime after quitting my second unfulfilling job and eating peanut-butter sandwiches for comfort, I won the gold medal at the Chinese Kickboxing (Sanshou) National Championships.

It wasn’t because I was good at punching and kicking. God forbid. That seemed a bit dangerous, considering I did it on a dare and had four weeks of preparation. Besides, I have a watermelon head—it’s a big target.

I won by reading the rules and looking for unexploited opportunities, of which there were two:

1. Weigh-ins were the day prior to competition: Using dehydration techniques commonly practiced by elite powerlifters and Olympic wrestlers, I lost 28 pounds in 18 hours, weighed in at 165 pounds, and then hyperhydrated back to 193 pounds.2 It’s hard to fight someone from three weight classes above you. Poor little guys.

2. There was a technicality in the fine print: If one combatant fell off the elevated platform three times in a single round, his opponent won by default. I decided to use this technicality as my principal technique and push people off. As you might imagine, this did not make the judges the happiest Chinese I’ve ever seen.

The result? I won all of my matches by technical knock-out (TKO) and went home national champion, something 99% of those with 5–10 years of experience had been unable to do.

But, isn’t pushing people out of the ring pushing the boundaries of ethics? Not at all—it’s no more than doing the uncommon within the rules. The important distinction is that between official rules and self-imposed rules. Consider the following example, from the official website of the Olympic movement (www.olympic.org).

The 1968 Mexico City Olympics marked the international debut of Dick Fosbury and his celebrated “Fosbury flop,” which would soon revolutionize high-jumping. At the time, jumpers … swung their outside foot up and over the bar [called the “straddle,” much like a hurdle jump, it allowed you to land on your feet]. Fosbury’s technique began by racing up to the bar at great speed and taking off from his right (or outside) foot. Then he twisted his body so that he went over the bar head-first with his back to the bar. While the coaches of the world shook their heads in disbelief, the Mexico City audience was absolutely captivated by Fosbury and shouted, “Olé!” as he cleared the bar. Fosbury cleared every height through 2.22 metres without a miss and then achieved a personal record of 2.24 metres to win the gold medal.

By 1980, 13 of the 16 Olympic finalists were using the Fosbury flop.

The weight-cutting techniques and off-platform throwing I used are now standard features of Sanshou competition. I didn’t cause it, I just foresaw it as inevitable, as did others who tested this superior approach. Now it’s par for the course.

Sports evolve when sacred cows are killed, when basic assumptions are tested.

The same is true in life and in lifestyles.

Challenging the Status Quo vs. Being Stupid

Most people walk down the street on their legs. Does that mean I walk down the street on my hands? Do I wear my underwear outside of my pants in the name of being different? Not usually, no. Then again, walking on my legs and keeping my thong on the inside have worked just fine thus far. I don’t fix it if it isn’t broken.

Different is better when it is more effective or more fun.

If everyone is defining a problem or solving it one way and the results are subpar, this is the time to ask, What if I did the opposite? Don’t follow a model that doesn’t work. If the recipe sucks, it doesn’t matter how good a cook you are.

When I was in data storage sales, my first gig out of college, I realized that most cold calls didn’t get to the intended person for one reason: gatekeepers. If I simply made all my calls from 8:00–8:30 A.M. and 6:00–6:30 P.M., for a total of one hour, I was able to avoid secretaries and book more than twice as many meetings as the senior sales executives who called from 9–5. In other words, I got twice the results for ⅛ the time.

From Japan to Monaco, from globetrotting single mothers to multimillionaire racecar drivers, the basic rules of successful NR are surprisingly uniform and predictably divergent from what the rest of the world is doing.

The following rules are the fundamental differentiators to keep in mind throughout this book.

1. Retirement Is Worst-Case-Scenario Insurance.

Retirement planning is like life insurance. It should be viewed as nothing more than a hedge against the absolute worst-case scenario: in this case, becoming physically incapable of working and needing a reservoir of capital to survive.

Retirement as a goal or final redemption is flawed for at least three solid reasons:

a. It is predicated on the assumption that you dislike what you are doing during the most physically capable years of your life. This is a nonstarter—nothing can justify that sacrifice.

b. Most people will never be able to retire and maintain even a hotdogs-for-dinner standard of living. Even one million is chump change in a world where traditional retirement could span 30 years and inflation lowers your purchasing power 2–4% per year. The math doesn’t work.3 The golden years become lower-middle-class life revisited. That’s a bittersweet ending.

c. If the math does work, it means that you are one ambitious, hardworking machine. If that’s the case, guess what? One week into retirement, you’ll be so damn bored that you’ll want to stick bicycle spokes in your eyes. You’ll probably opt to look for a new job or start another company. Kinda defeats the purpose of waiting, doesn’t it?

I’m not saying don’t plan for the worst case—I have maxed out 401(k)s and IRAs I use primarily for tax purposes—but don’t mistake retirement for the goal.

2. Interest and Energy Are Cyclical.

If I offered you $10,000,000 to work 24 hours a day for 15 years and then retire, would you do it? Of course not—you couldn’t. It is unsustainable, just as what most define as a career: doing the same thing for 8+ hours per day until you break down or have enough cash to permanently stop.

How else can my 30-year-old friends all look like a cross between Donald Trump and Joan Rivers? It’s horrendous—premature aging fueled by triple bypass frappuccinos and impossible workloads.

Alternating periods of activity and rest is necessary to survive, let alone thrive. Capacity, interest, and mental endurance all wax and wane. Plan accordingly.

The NR aims to distribute “mini-retirements” throughout life instead of hoarding the recovery and enjoyment for the fool’s gold of retirement. By working only when you are most effective, life is both more productive and more enjoyable. It’s the perfect example of having your cake and eating it, too.

Personally, I now aim for one month of overseas relocation or high-intensity learning (tango, fighting, whatever) for every two months of work projects.

3. 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.

Few people choose to (or are able to) measure the results of their actions and thus measure their contribution in time. More time equals more self-worth and more reinforcement from those above and around them. The NR, despite fewer hours in the office, produce more meaningful results than the next dozen non-NR combined.

Let’s define “laziness” anew—to endure a non-ideal existence, to let circumstance or others decide life for you, or to amass a fortune while passing through life like a spectator from an office window. The size of your bank account doesn’t change this, nor does the number of hours you log in handling unimportant e-mail or minutiae.

Focus on being productive instead of busy.

4. The Timing Is Never Right.

I once asked my mom how she decided when to have her first child, little ol’ me. The answer was simple: “It was something we wanted, and we decided there was no point in putting it off. The timing is never right to have a baby.” And so it is.

For all of the most important things, the timing always sucks. Waiting for a good time to quit your job? The stars will never align and the traffic lights of life will never all be green at the same time. The universe doesn’t conspire against you, but it doesn’t go out of its way to line up all the pins either. Conditions are never perfect. “Someday” is a disease that will take your dreams to the grave with you. Pro and con lists are just as bad. If it’s important to you and you want to do it “eventually,” just do it and correct course along the way.

5. 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. If the potential damage is moderate or in any way reversible, don’t give people the chance to say no. Most people are fast to stop you before you get started but hesitant to get in the way if you’re moving. Get good at being a troublemaker and saying sorry when you really screw up.

6. Emphasize Strengths, Don’t Fix Weaknesses.

Most people are good at a handful of things and utterly miserable at most. I am great at product creation and marketing but terrible at most of the things that follow.

My body is designed to lift heavy objects and throw them, and that’s it. I ignored this for a long time. I tried swimming and looked like a drowning monkey. I tried basketball and looked like a caveman. Then I became a fighter and took off.

It is far more lucrative and fun to leverage your strengths instead of attempting to fix all the chinks in your armor. 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.

7. Things in Excess Become Their Opposite.

It is possible to have too much of a good thing. In excess, most endeavors and possessions take on the characteristics of their opposite. Thus:

Pacifists become militants.

Freedom fighters become tyrants.

Blessings become curses.

Help becomes hindrance.

More becomes less.4

Too much, too many, and too often of what you want becomes what you don’t want. This is true of possessions and even time. Lifestyle Design is thus not interested in creating an excess of idle time, which is poisonous, but the positive use of free time, defined simply as doing what you want as opposed to what you feel obligated to do.

8. Money Alone Is Not the Solution.

There is much to be said for the power of money as currency (I’m a fan myself), but adding more of it just isn’t the answer as often as we’d like to think. In part, it’s laziness. “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—now and not later. By using money as the scapegoat and work as our all-consuming routine, we are able to conveniently disallow ourselves the time to do otherwise: “John, I’d love to talk about the gaping void I feel in my life, the hopelessness that hits me like a punch in the eye every time I start my computer in the morning, but I have so much work to do! I’ve got at least three hours of unimportant e-mail to reply to before calling the prospects who said ‘no’ yesterday. Gotta run!”

Busy yourself with the routine of the money wheel, pretend it’s the fix-all, and you artfully create a constant distraction that prevents you from seeing just how pointless it is. Deep down, you know it’s all an illusion, but with everyone participating in the same game of make-believe, it’s easy to forget.

The problem is more than money.

9. Relative Income Is More Important Than Absolute Income.

Among dietitians and nutritionists, there is some debate over the value of a calorie. Is a calorie a calorie, much like a rose is a rose? Is fat loss as simple as expending more calories than you consume, or is the source of those calories important? Based on work with top athletes, I know the answer to be the latter.

What about income? Is a dollar is a dollar is a dollar? The New Rich don’t think so.

Let’s look at this like a fifth-grade math problem. Two hardworking chaps are headed toward each other. Chap A moving at 80 hours per week and Chap B moving at 10 hours per week. They both make $50,000 per year. Who will be richer when they pass in the middle of the night? If you said B, you would be correct, and this is the difference between absolute and relative income.

Absolute income is measured using one holy and inalterable variable: the raw and almighty dollar. Jane Doe makes $100,000 per year and is thus twice as rich as John Doe, who makes $50,000 per year.

Relative income uses two variables: the dollar and time, usually hours. The whole “per year” concept is arbitrary and makes it easy to trick yourself. Let’s look at the real trade. Jane Doe makes $100,000 per year, $2,000 for each of 50 weeks per year, and works 80 hours per week. Jane Doe thus makes $25 per hour. John Doe makes $50,000 per year, $1,000 for each of 50 weeks per year, but works 10 hours per week and hence makes $100 per hour. In relative income, John is four times richer.

Of course, relative income has to add up to the minimum amount necessary to actualize your goals. If I make $100 per hour but only work one hour per week, it’s going to be hard for me to run amuck like a superstar. Assuming that the total absolute income is where it needs to be to live my dreams (not an arbitrary point of comparison with the Joneses), relative income is the real measurement of wealth for the New Rich.

The top New Rich mavericks make at least $5,000 per hour. Out of college, I started at about $5. I’ll get you closer to the former.

10. Distress Is Bad, Eustress Is Good.

Unbeknownst to most fun-loving bipeds, not all stress is bad. Indeed, the New Rich don’t aim to eliminate all stress. Not in the least. There are two separate types of stress, each as different as euphoria and its seldom-mentioned opposite, dysphoria.

Distress refers to harmful stimuli that makes you weaker, less confident, and less able. Destructive criticism, abusive bosses, and smashing your face on a curb are examples of this. These are things we want to avoid.

Eustress, on the other hand, is a word most of you have probably never heard. Eu-, a Greek prefix for “healthy,” is used in the same sense in the word “euphoria.” Role models who push us to exceed our limits, physical training that removes our spare tires, and risks that expand our sphere of comfortable action are all examples of eustress—stress that is healthful and the stimulus for growth.

People who avoid all criticism fail. It’s destructive criticism we need to avoid, not criticism in all forms. Similarly, there is no progress without eustress, and the more eustress we can create or apply to our lives, the sooner we can actualize our dreams. The trick is telling the two apart.

The New Rich are equally aggressive in removing distress and finding eustress.