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Dear Friend,

Welcome to the second season of the MarketingMonday.com live podcast. I am looking forward to a great year this year and I have got a lot of big ideas that I would like to share with you. So in the first season of Marketing Monday I got to share all kinds of money making ideas, lifestyles ideas and the good news is that Marketing Monday is the top rated real estate podcast on iTunes. And if you go to MarketingMonday.com the entire archive from season one is there. You can listen to all of the episodes online and download the transcripts, including the final episode with my top money making picks with all of the episodes from season one. So I am excited about this new season and I especially excited about this week.

My friend Tim Ferriss has written an incredible book called, The 4 Hour Work Week. You have probably heard a lot about it this summer. It has been the top business book on the New York Times best seller list, on the Wall Street Journal best seller list, it is all over the news. You may have even seen, you may have even seen Tim on TV with lots of interviews that he has been doing, but it is just packed with strategies to help you, not only do more in less time, but to go beyond that and really proactively design your ultimate lifestyle.

The 4 Hour Work Week is one of the most important books of the year and I recommend it wholeheartedly. This week I asked Tim if he would come and be our guest and come and share some of the best action steps you can take, to see immediate results. So listen to this interview, then go to amazon.com and get your own copy of The 4 Hour Work Week, check out Tim’s blog at fourhourworkweek.com and then next week, we will go a little bit deeper into these concepts. So here is the interview, enjoy it.

Dean Jackson: Tim Ferriss.

Tim Ferriss: Yes sir. How are you doing?

DJ: I am doing very well. Thank you for joining us here. Where in the world is Tim Ferriss today?

TF: Tim Ferriss is in Mountain View, California, which is just south of Stamford University and planning to be on his way to Scotland in the next seven days or so.

DJ: Oh perfect, good for you.

TF: Yeah.

DJ: So I have been talking a lot about your book lately. I have been sharing it with a lot of friends about your book and it has created quite a bit of a stir in the last few months here, hasn’t it?

TF: Yes it really has. Beyond all expectations. I actually just found out yesterday that is the number one on this Business Week list as well, in addition to the Wall Street Journal and New York Times, so it has taken on a life of it’s own, which is nice to see, considering that no one expected it to happen.

DJ: And I imagine there is quite a polarity in the way that it is accepted. People either are excited and embrace it completely or people are completely opposite of that. There is no way that I could possibly get to a 4 Hour Work week.

TF: It is either one or the other, you are right. It is definitely a polarising effect and I think that it threatens assumptions one way or the other and people respond to that in one of two ways. They either embrace testing some of the concepts or they reject all of it. And you know, sometimes the people in the later group, come to realised that the alternative is working ninety hours or one hundred hours a week, until death, which is not a very appealing alternative, so they then turn around and test it, but not always.

DJ: But real estate, is notorious really for the prevalence of 80 hour work weeks and the complete blurring of boundaries of time on and time off and you know, so you probably hear this whenever you talk to any type of industry specific. Well they probably say, well I can’t possibly have a 4 Hour Work week. I work on Wall Street or I can’t possibly have a 4 Hour Work week, I am in real estate. So you know, every, is it every industry that you think they are completely different and it just won’t work in their industry?

TF: It is a very common response. I think that once we start examining the underlying premises that people base that belief on, it’s almost always very flawed and generally a habit of imitating common practises opposed to looking for the most results driven approach. But just as of and of course I put in my eighty to one hundred hour work weeks sometimes and more in Silicone Valley in 2000 to 2004, so I am not a stranger to that. But you know, everyone to Richard Branson, who says that he can get all of his most important business done in the first fifteen minutes of each day if he prioritises properly to Lei Coka, who told a friend of mine, that he gets about thirty minutes of productive work done per week, because of so many interruptions that he has to field. If you will look at the top performers in the world, where it is [Steve Jobs] or simply high performing employees or self employed entrepreneurs, you find that they all have the same twenty four hours as everyone else.

So it is not a matter of working harder, it is generally a matter of choosing the best inputs for maximum output. And that is the real focus of The 4 Hour Work Week.

DJ: Well you have got and you have outlined in your book, a four step process for following, to try and embrace this 4 Hour Work week, so would it be helpful if we talked a little bit about your four step process here?

TF: Sure, absolutely and it is really, it is not something that I set out in mind, it is something that came out of the case studies and interviews that I did in more than twenty countries. Where I identified really four common characteristics and processes that people go through, in order to cut down on workload, while maintaining or increasing output. And so the four steps are, definition, elimination, automation and then liberation. And the four very conveniently spelt deal, DEAL.

DJ: Yeah.

TF: The original order was DELA, which is more appropriate from an employees as opposed to entrepreneurs, but since we are looking at real estate specifically, you know. I will take a step back and just mention as a side note, that my father has been a real estate agent for more than thirty years, so I have seen this business and I am familiar with it. So definition in the context of any self employed business person, is there are a few steps. The first is, really defining our ideal lifestyle, in terms of having, being and doing and quantifying that. And that becomes our TMI or target monthly income and then that can be divided by thirty to get your target daily income. So if you want to have an Aston Martin DV9 and go to Fiji once a year and have a ski cabin in Aspen or whatever the things might be, you actually determine the real cost of those things and amortise it over twelve months and you get your target monthly income for your ideal lifestyle that most people postpone for retirement, but it is not necessary. And I got into a lot of detail about redistributing retirement throughout life and many retirements and everything else. But that would be the first step and it is generally much less than people anticipate. I mean, I can show people where they race Lamborghini’s and F1 MacLaren’s for $300 a day, the experiences are just not that expensive.

Secondly is, doing an eighty twenty analysis of time. So you are essentially going to be treating time as a currency and looking at a few things. The first is, you are going to do an eighty twenty analysis of your activities and determine the twenty percent of activities and people, that consume eighty percent of your time. And you will generally find that the administrative tasks, in other words, the time consuming tasks that don’t directly contribute income, are the most interruptive and those are tasks that you can outsource or delegate and I will talk about that in another step. And then you also do an eighty twenty analysis, related to income generation. So what is the twenty percent of prospects, what is their profile, who generate eighty percent of my income. For example, what are the, of the products that you sell, in this case it would be types of homes for example or properties. What is the type of property that I generate eighty percent of my income with. Of the twenty percent that generate, that disproportionate the eighty and so if you identify, for example that it is two bedroom town homes in say a twenty mile radius of X zip code, then you should focus on that and you should do the analysis to get there. And that is really the core of definition. There are other components to it, but those are a few of the most important points.

Elimination involves minimising or completely removing the time consuming and energy, attention consuming tasks that do not contribute directly to income. And that could include everything from going on a low information diet, where you are checking email only twice per day, which you can do very simply with auto responders and people can find examples of these auto responders on my blog at fourhourworkweek.com. I won’t go into it too much here. But one very important concept that I think is necessary for people to embrace, is that idea that the customer is not always right and there are many unreasonable prospects and customers and it is not only permissible, but recommended to fire certain clients and fire certain prospects. And really go about filtering clients, because you will find when you do analysis generally, that the highest profit customers require the least management and the lowest profit customers require the most management, before, during and after the sale. Automation…

DJ: It is interesting what you are saying there, about eliminating some of your clients, because you know, all of our Marketing Monday readers are familiar with a concept that we call, a five star prospect.

TF: Right.

DJ: And it is completely in line with what you said there. And I just want to point out this one thing in your book. I read out just this one thing from page sixty eight, which was fascinating to me about elimination here. You had two truism here, when you said, number one, doing something unimportant well, does not make it important and number two, requiring a lot of time, does not make a task important. What you do is infinitely more important than how you do it and I just thought, man that is brilliant.

TF: Oh yeah, absolutely so if you have a common set of tasks that everyone in your industry performs or a common set of pieces of software or whatever the assumed activities might be. Before you engage in those activities and try to become efficient at performing those different activities. Really sit down and ask yourself, is it worth doing in the first place and that is being effective. The difference between being effective and being efficient, so focus on being effective, choosing the right things, before getting good a doing whatever those things are that happen to be put in front of you. And that segues into automation. And automation really refer to a number of things.

It refers to systematising your business processes and I will talk about that in a second and also outsourcing your life or delegating everything that is time consuming so that someone else can perform. So I have a small army of twenty to twenty five, I would say, virtual assistants, including VPA’s in places like India, Philippines, Canada and in the US, most of whom do work for me for four to five dollars an hour and the quality is extraordinary when you filter them properly. So if you do the eighty twenty analysis, you will have this group of tasks that can consume a lot of time. The first thing you want to determine is whether they are worth doing at all. If they can be eliminated, eliminate.

So one of my other lines, eliminate before you delegate. But assuming that you have a number of tasks left that are time consuming, you perform an hourly income calculation for yourself and this means that forget about annual income, because it doesn’t take into account time. So what we are going to do is a very easy way to approximate an hourly income, is to take your income. Let’s say it is $50,000 a year, you cut off the last three zeros, you get fifty, you divide that in half and you get twenty five, so you make twenty five dollars an hour. That assumes a forty hour work week. So you can run the math other ways, but let’s just say you make twenty five dollars an hour. If you can pay anyone less than that amount and even in some cases, more than that amount to perform these time consuming tasks so that you can earn and focus on your core income activities and prospects. That’s what you need to do. And you can go to sites like elance.com or odesk.com, to look at different options and essentially post projects for people to bid on. And you can really outsource almost anything that you can do on a phone or that you can do on a computer. The key though and this is very important, that you externalise your expertise. So when you are performing at your best, when you have the perfect prospect call or the perfect prospect email or the perfect let’s say, home description and hosting on a website, if that is how you are doing listings. Whatever the key functions are, break it down into, let’s say, a three to ten step process and really look at how you are making those decisions. And as soon as you do that, you cannot necessarily train someone. It is not about management, you are essentially providing them with an idiot proof set of instructions and then you just need to find people who can perform that on deadline. And that is the automation portion.

DJ: Can I just interrupt you. That line of thinking that you are just saying, thinking from an automated way is.

TF: Right.

DJ: One of the things that we did a Marketing Monday episode about, that type of thinking and one of the things that really I found exercises that part of your brain is a show on the Discovery channel, called How it is Made. I am sure you have seen it, where they take all kinds of different things and show the entire manufacturing process, from beginning to end and that what I found when watching that show, it kind of expanded that part of my brain that allows you to think in processes, in moving, automated, assembly line type of thinking. And what you just said, there thinking, thinking anything that you do, any task if there is three or ten steps in that process, being able to define them and outline them and how they would be done, if they were able to be automated…

TF: Oh absolutely. And the knee jerk response it, oh I can’t do that. Or people have control issues and the first thing is, you can test all of these concepts very cheaply. I mean you can test them for two days for fifty dollars or something like that. But secondly, you need to have, for your business to be scaleable right, so to be able to increase your revenue without adding proportionate number of hours and then secondly, to be able to be able to remove yourself from the business, so that you can enjoy your lifestyle and control time as opposed to being controlled by your business. You need to have a process driven as opposed to owner driven business, alright. So thinking of it as a franchise modelling, you know. If I wanted to become the Charles Swabb or the HR Block of let’s say real estate, how would I set this down in a set of processes, so that mistakes couldn’t be made and that the results were perhaps not perfect, but at least highly acceptable and generating revenue.

DJ: Maybe not perfect, but predictable.

TF: Exactly. No, very good point. And I will give you one example. So most people feel like they have to check their own email and I have. I mean there was a point that I was receiving about three hundred emails an hour recently. I mean the book is doing very well and I get a lot of feedback through the blog and so forth. There is no possible way that I could read all that email and get anything done. So I have a number of personal assistants that read my email for me and I realise that, checking email there are very specific questions, because thinking is really just asking yourself questions and answering those questions. There are very specific questions I ask myself, when I was qualifying, should I respond or should I not respond, should I delete this or should I save this, should I forward this or should I not forward this. You know, is this person legitimate and should I do business with this person. All of these questions, I have a specific criteria for answering and as soon as I put that on paper, over time, I essentially have a working document that my assistant uses and it is just called Tim Ferriss Rules. And it is for checking my email and what she will do, is she will go through and identify the items that she needs my input on and then she will call me, once a day and in about ten to fifteen minutes, we can hit all the action items that we need to address and then she responds to those people.

So instead of let’s say, going through three hundred emails, I am spending ten minutes on the phone and still getting what I need to get done, done. That would be just one example and you know, for someone like that, it is worth paying in many cases, up to your own per hour amount, because you will be able to go from making $50,000 a year to $150,000 or $200,000 a year, because you will be able to focus your core competencies on the few income generating activities that will really have a large impact.

DJ: Right. That is amazing when you start thinking of, just analysing your thinking and the things like your process for checking emails. It is everybody’s process for checking emails and pretty much runs in the background.

TF: Right.

DJ: They are not even consciously aware of it and that is something even new to me, what you are saying, detach from that process.

TF: It is true. You need to develop, to improve your performance, you need to improve your thinking on a very fundamental level. And that requires that you become aware of thinking, so you have a certain mega cogitative awareness and it really comes down to recognising why you are doing certain things. So if you check email first thing in the morning and three hours go by and let’s say it is a Saturday and you have just wasted the entire day, of two days that you should have free. You know, why are you doing that? Is it for guilt, why do you feel compelled to work? Is it because you are confusing being busy with being productive? Probably. You know, what is it that you are working for and you need to step back and realise that you are working to generate income so that you can use that income to have certain experiences, with more free time than you recognise than spending your weekends checking email, is the most counter productive thing that you could possibly be doing. Just developing a certain awareness of you know, both emotional and cognitive, so that you realise why are we doing what you are doing and also what you are doing. So how much time you are spending on certain activities, but I want to digress, but you know, the book does a good job of leading people step by step through that training process. And it really doesn’t take much time.

And then the liberation. I will just touch on it briefly, but liberation really discusses first of all, exploiting mobilities. So how can you, let’s say, just this one example, go to Argentina and live like a king, even with your family, while still running your business flawlessly or checking your email once every week or once every ten days. And I run through that and people don’t necessarily have to travel, but that is one option that I think that is attractive for many people. And then also, when you remove the office, when you remove a, when you remove work essentially, how do you fill that void. Because removing work doesn’t automatically create life and that is why so many retirees, even high net work retirees, end up in depression, it is very common and that is based on case studies and interviews that I have done. It is because they assume, well I will work my ass off, save my money, put a few million in the bank and then I will quit, I will live the good life. But they really define what that good life is and then they end up without any alternative activities to checking email and making phone calls and really struggle with trying to fill that void and as a result, most of them will go straight back to working in some fashion, simply to keep themselves in constant motion. So how do you design a life and a lifestyle, is the topic of liberation.

DJ: That is all fantastic and you know, I have been recommending your book everywhere I go. I am going to recommend it for every one of our listeners, to pick up The Four Hours Work Week by Timothy Ferriss. You can get it on Amazon, you can get it at Barnes and Noble, you can get it at any bookstore. It is one of the top selling books in the country right now and if you want to even go a little bit further, Tim has an excellent blog at fourhourworkweek.com. Tim, thank you so much for joining us.

TF: Oh it has been my pleasure. You know, real estate is something that I am like interested in. I am an active investor myself and the principals can absolutely be applied. I mean just as a quick side note, the reason that my father has been very effective and he is essentially retired, but, is that he identified his core competencies and was able to recognise that by essentially learning everything about thirty square miles, even less, potentially, you know, he could master a market. And that is effectively what he did. So it is absolutely possible and compatible with real estate investing or any type of investing. And I think every real estate investor or agent, should also take a look at Warren Buffet’s philosophies, because they are very compatible with The 4 Hour Work Week. I think the philosophies of Warren Buffet are very useful to look at and then The 4 Hour Work Week, really gives you the practical nuts and bolts of implementing a lot of the changes and processes that we talked about today. So thanks for having me.

DJ: Thank you very much Tim.

Well that is all for this week. I hope you enjoyed the interview. Go ahead and get yourself a copy of The 4 Hour Work Week. You can get it at Amazon, you can get it at your bookstore, check out Tim’s blog and fourhourworkweek.com and then come back here next week and we will talk even more about these concepts. So have a great week.

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