Timothy Ferriss’s 4-Hour Workweek does what only the best books can do. He strikes a chord deep within us, confirms thoughts we’ve always vaguely felt to be true, and points us on a path that offers new hope for the future. Some of the salient points the author covers are:
1. Retirement as a goal is flawed. Doing the same thing for 8 hours a day until you crash or stop permanently is the wrong way to live. Ferriss says that alternating periods of activity and rest are necessary to survive, let alone thrive. He advocates spreading “mini-retirements” over a lifetime rather than accruing the recovery and enjoyment of retirement years.
2. The question to ask yourself is not “What do I want in life?” or “What are my goals?” but the real question should be “what would excite me?”. To focus more, you must ask yourself: “What would I do if I could not fail or if I were 10 times smarter than the rest of the world?”
3. Being fired, despite coming as a surprise and leaving you struggling to recover, is often a godsend. Someone else made the decision for you, and it’s impossible for you to sit in the wrong job for the rest of your life. Most people aren’t lucky enough to be fired and die a slow spiritual death after 30 or 40 years of putting up with mediocre.
The author outlines several insightful ways to free up time for mini-retirements.
1. Start your own business, then hand the reins over to someone else to run the operations for you. You become the owner of a ghost. As Ferriss quotes the Guardian of the Gates to the Emerald City in the Wizard of Oz, “The orders are that no one can see the Great Oz! No one, no how!”
2. Outsource your work to domestic and foreign virtual companies that specialize in outsourcing.
3. Negotiate with your current boss to work at home instead of working in the office. This allows you to focus your efforts on the important aspects of your job and get it done faster and more efficiently.
While I think these are all reasonable options, this is where I part ways with the author, in terms of how I approach passive income streams.
What works for me is buying houses to fix, repair and rent. The work is charged up front with the initial purchase and repair of the property. After that initial boost, like the 4-hour work week, requires a minimal contribution and can allow time for mini-retirements.
For me, the advantage of real estate is that it provides both long-term and short-term gains. Long-term from the average 5% increase in equity, and short-term from monthly rental payments and tax deductions. If you hand over your rental properties to a management company, you ride for free.
This is not to take anything away from the 4 hour work week. On the contrary, the book is worth reading because it is eminently thought-provoking and written in a tremendously entertaining style. (His hilarious letter of resignation from the Mad Lib fill-in-the-blanks job is the work of mad genius.) However, as I mentioned, the book goes much further by examining deeper issues of life and work that are rarely addressed in such an exciting way.
Another excellent book that also takes a significant look at work and money issues is “Your Money or Your Life: Transforming Your Relationship with Money and Achieving Financial Independence” by Joe Dominguez and Vicki Robin.
