The Directed Life

Notes and excerpts from my second time reading Tim Ferriss’s The 4-Hour Workweek

Takeaways:

• The best organization of space, thoughts, and time is elimination
• Consistently invoke Pareto 80/20 analysis in your life
• Low-information diet
• Create a product business that you can easily automate and use to fuel your lifestyle: a vehicle that can drive you to a meaningful life
• Develop a product in a clearly defined niche with high market demand from the target audience; it’s easier to fill demand than create it
• Try and fail at a lot of things

The treasure of recessionary periods—how to get ahead by going left when everyone is going right (page xiv):

Economic downturns produce discounted infrastructure, outstanding freelancers at bargain prices, and rock-bottom advertising deals—all impossible when everyone is optimistic … there has never been a better time for testing the uncommon.

The currency of the new age is time and mobility (page 7).

The perfect job (pages 9-10):

The goal is fun and profit … the perfect job is the one that takes the least time. The vast majority of people will never find a job that can be an unending source of fulfillment, so that is not the goal here; to free time and automate income is.

The purest definition of entrepreneur, credited to 19th century economist J.B. Say, is someone who shifts economic resources from a lower yield area into a higher yield area (page 11).

Sequence (page 14):

Finding a market before designing a product is smarter than the reverse.

Great quote from Seneca on our possessions consuming us (page 19):

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

Meaning is the goalpost, not inactivity (page 20):

Inactivity is not the goal. Doing that which excites you is.

Big picture guiding principles / goals (page 21):

• Items are a means to an end, not the end in themselves
• Ownership and automation
• More quality, less clutter—contribute useful things to the world
• Think big while increasing and optimizing present-day cash flow

Money is not the solution (page 35):

‘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.

Relative income > Absolute income; what is your hourly wage? (pages 35-36)

Injecting positive stress into your life for growth (page 37):

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.

Conquering Fear = Defining Fear; use fear-setting as a tool (page 42)

Set large and unrealistic goals—there’s less competition there (pages 50-51):

Ninety-nine percent of people in the world are convinced they are incapable of achieving great things, so they aim for the mediocre … The fishing is best where the fewest go, and the collective insecurity of the world makes it easy for people to hit home runs while everyone else is aiming for base hits. There is just less competition for bigger goals.

Big question: “What would excite me?” (page 52)

Start with that question before setting the number of dollars you believe you need to get there (page 52):

“I’ll just work until I have X dollars and then do what I want.” If you don’t define the “what I want” alternate activities, the X figure will increase indefinitely to avoid the fear-inducing uncertainty of this void.

Dreamlining—calculate TMI for the type of lifestyle you’d like to live and work backwards from there (pages 57-62).

Maintain eye contact when you’re speaking to someone (page 64).

Find the important actions and complete them; avoid business (page 67):

Being busy is most often used as a guise for avoiding the few critically important but uncomfortable actions.

Using Pareto’s Law (80/20 Principle) as a lens (page 71):

1. Which 20% of sources are causing 80% of my problems and unhappiness?

2. Which 20% of sources are resulting in 80% of my desired outcomes and happiness?

The path of the productive (page 75):

Being selective—doing less—is the path of the productive.

Parkinson’s Law is also known as the “magic of the imminent deadline”—perceived importance of tasks increase with decreased amount of time. Apply Parkinson’s and Pareto’s laws synergistically (page 77):

1. Limit tasks to the important to shorten work time (80/20).

2. Shorten work time to limit tasks to the important (Parkinson’s Law).

What are the top 3 things I use as time fillers even though I’m not doing anything productive? (page 81)

Adopt the low-information diet (page 87):

Lifestyle design is based on massive action—output. Increased output necessitates decreased input. Most information is time-consuming, negative, irrelevant to your goals, and outside of your influence.

Ferriss includes this quote form Ralph Charell that I really liked (page 94):

Do your own thinking independently. Be the chess player, not the chess piece.

Setting the rules (page 111):

Set the rules in your favor: Limit access to your time, force people to define their requests before spending time with them, and batch routine menial tasks to prevent postponement of more important projects. Do not let people interrupt you. Find your focus and you’ll find your lifestyle.

Create the “curious business phenomenon” of impossible negative cash flow (page 127).

The whole idea is building systems to replace yourself—seamless automation where you’re a ghost instead of a cog in the machine (page 128).

Great quote from Emerson (page 150):

The man who grasps principles can successfully select his own methods. The man who tries methods, ignoring principles, is sure to have trouble.

Tim cites an outstanding product model: online membership sites that don’t require content generation (page 154).

The goals and currencies required (page 154):

Our goal is simple: to create an automated vehicle for generating cash without consuming time … So first things first: cash flow and time. With these two currencies, all other things are possible. Without them, nothing is possible.

Market first (page 158):

Creating demand is hard. Filling demand is much easier. Don’t create a product, then seek someone to sell it to. Find a market—define your customers—then find or develop a product for them … Be a member of your target market and don’t speculate what others need or will be willing to buy.

Product Brainstorm (pages 160-161, 189):

• Pick two markets you are most familiar with
• Come up with well-formed product ideas and spend no money until you have proof of concept
• Main benefit of product should be explainable in one sentence / phrase.
• Price in the $50-$200 range, aiming for a 8-10x markup
  • Price high, then justify
• Summary: market selection, product brainstorm, micro-testing, rollout and automation

The Anatomy of Automation (page 203):

1. Ads ↓
2. Website ↓
3. Fulfillment ↓
4. Processor ↓
5. Bank

Reminded me of Alex Hormozi’s maxim for reaching your first $1 million: one product, one channel, one avatar.

Key methods (page 210):

1. Offer 2 purchase options; one basic, one premium; no more than that
2. Offer one kind of standard shipping

Quote from Machiavelli’s The Prince (page 241):

All courses of action are risky, so prudence is not in avoiding danger (it’s impossible), but calculating risk and acting decisively. Make mistakes of ambition and not mistakes of sloth. Develop the strength to do bold things, not the strength to suffer.

Slowing down (page 257):

Learn to slow down. Get lost intentionally. Observe how you judge both yourself and those around you. Chances are that it’s been a while.

Dreamline questions (page 300):

What are you good at? What could you be the best at? What makes you happy? What excites you? What makes you feel accomplished and good about yourself? What are you most proud of having accomplished in your life? Can you repeat this or further develop it? What do you enjoy sharing or experiencing with other people?

Perform thorough 80/20 analysis every two to four weeks for both business and personal life (page 303).

Reflections and perspective (page 305):

This isn’t a problem, of course, once you realize that life is neither a problem to be solved nor a game to be won … The heaviness of success-chasing can be replaced with a serendipitous lightness when you recognize that the only rules and limits are those we set for ourselves.

Good quotes (pages 311-312):

Oftentimes, in order to do the big things, you have to let the small bad things happen. This is a skill we want to cultivate.

Once you realize that you can turn off the noise without the world ending, you’re liberated in a way that few people ever know. Just remember: If you don’t have attention, you don’t have time.

The first quote in that duo reminded me of Naval’s reflection on Taleb and “bleeding a little” each day.

The key to discipline: manipulating the “environmental causes of poor responses” instead of relying on self-discipline (page 316).

Rehearse poverty regularly—restrict moderate expenses and eliminate unnecessary consumption—training to think big and take risks with no fears. Tim references Seneca here (page 316).

Tim recommends reading The Entrepreneurial Imperative (page 319).

Attention as a currency (page 321):

Income is renewable, but some other resources—like attention—are not. I’ve talked before about attention as a currency and how it determines the value of time .. you didn’t have attention, so the time had no practical value.

Try the 21-day no complaint experiment: wear a single bracelet and move it from one wrist to the other every time you complain. When you do complain, the 21 days restart (page 323).

Tim highly reveres Drucker, similar to Jim Collins. In your business, track Cost-Per-Order, Ad Allowable, Media efficiency ratio, and projected lifetime value. Use the metrics to respond and improve your business (page 328).

Tim requires his team to read The Elements of Style (page 337).

Other recommended reading (non-comprehensive list, just the books that stuck out to me—pages 372-373):

• The Magic of Thinking Big
• How to Make Millions with Your Ideas: An Entrepreneur’s Guide
• The E-Myth Revisited: Why Most Small Businesses Don’t Work and What to Do About It
• Less Is More: The Art of Voluntary Poverty—An Anthology of Ancient and Modern Voices in Praise of Simplicity
• The Monk and the Riddle: The Education of a Silicon valley Entrepreneur