December 28, 2012 Leave a comment
Timothy Ferriss ,an entrepreneur and angel investor,in his bestseller The 4-Hour Workweek: Escape 9-5, Live Anywhere, and Join the New Rich talks about ”lifestyle design”.He repudiates the traditional “deferred” life plan in which people work grueling hours and take few vacations for decades and save money in order to relax after retirement.He advocates mini retirements instead.His ideas make sense because the present is our only reality.While it is great to provide for the future, what about those of us who will not be round in the future or might not be as fit and able tomorrow to do the things we really want?Also happiness is as transitory as time and neither can be saved up for the future.
He advocates the acronym DEAL .It stands for Definition, Elimination, Automation, and Liberation.
Definition means figuring out what you want, getting over your fears, seeing past society’s “expectations”, and figuring out what it will really cost to get where a person wants to go.And he shows us how it doesn’t cost so much to have and do the the things we want as long as we think flexibly.As he puts it:The rules of reality can be bent. It just requires thinking in different terms.
Elimination is about time management, or rather about not managing time. You achieved this by applying the ‘Pareto principle’ or the ’80-20 Rule’ (80% of your benefits come from 20% of your efforts) to focus only on those tasks that contribute the majority of benefits, and using Parkinson’s law(work expands so as to fill the time available for its completion) to limit the amount of actual time you spend working.Efficiency and effectiveness are different.Emphasis effectiveness.
Automation is about building sustainable, largely passive sources of income.
Liberation involves the successful automation of your lifestyle and the liberation from a geographical location and job.
By working at DEAL we will know what we want and be able to free ourselves from the commitments that hold us back from pursuing our dream lifestyle.Furthermore he goes to show how by taking mini retirements, when we do what we really want to do, we not just stave off burnout and become more productive but can often save or make a pile of money we could add to our savings/retirement kitty.So the mini-vacations need not be at the cost of our planned retirement.Personally he claims to have made $32k in 12 months during his mini retirement.Also by taking mini-retirements you can check that the lifestyle you have planned for retirement is actually something you like.
You can find an excellent summary of the book here:SUMMARY