#181: How to 'Waste Money' To Improve the Quality of Your Life

This episode is not going to deconstruct a world-class performer, per usual. This is a short, but very actionable and practical episode about the inner workings of my business. I was asked recently how I choose my projects. I riffed on this topic, and shared many thoughts on delegating tasks, future projects, and my involvement -- and break from -- the start-up community. I realized that the real question at the root of many of my decisions is: "How can I waste money to improve my quality of life?" This seems like a bad thing, but it is not. It is trading pennies for dollars. So how can you waste money to improve the quality of your life? I delve into this topic and much more. I hope you'll get a lot out of it. Please enjoy! Show notes and links for this episode can be found at www.fourhourworkweek.com/podcast http://www.fourhourworkweek.com/podcast. This podcast is brought to you by Wealthfront https://wealthfront.com/tim. Wealthfront is a massively disruptive (in a good way) set-it-and-forget-it investing service led by technologists from places like Apple. It has exploded in popularity in the last two years and now has more than $2.5B under management. Why? Because you can get services previously limited to the ultra-wealthy and only pay pennies on the dollar for them, and it's all through smarter software instead of retail locations and bloated sales teams. Check out wealthfront.com/tim http://wealthfront.com/tim, take their risk assessment quiz, which only takes 2-5 minutes, and they'll show you -- for free -- exactly the portfolio they'd put you in. If you want to just take their advice and do it yourself, you can. Well worth a few minutes to explore: wealthfront.com/tim http://wealthfront.com/tim. This podcast is also brought to you by Four Sigmatic http://foursigmatic.com/tim. I reached out to these Finnish entrepreneurs after a very talented acrobat introduced me to one of their products, which blew my mind (in the best way possible). It is mushroom coffee featuring chaga http://foursigmatic.com/tim. It tastes like coffee, but there are only 40 milligrams of caffeine, so it has less than half of what you would find in a regular cup of coffee. I do not get any jitters, acid reflux, or any type of stomach burn. It put me on fire for an entire day, and I only had half of the packet. People are always asking me what I use for cognitive enhancement -- right now, this is the answer. You can try it right now by going to foursigmatic.com/tim http://foursigmatic.com/tim and using the code "Tim" to get 20 percent off your first order. If you are in the experimental mindset, I do not think you'll be disappointed.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:01Tim Ferriss?

  At this altitude, I can run flat out for a half mile before my hands start shaking.

• 0:06Speaker 01

  Can I ask you a personal question?

• 0:08Tim Ferriss?

  Now, what is the appropriate time?

• 0:12Speaker 01

  I'm a cybernetic organism, living tissue over metal endoskeleton.

• 0:23Tim Ferriss?

  This episode is brought to you by Wealthfront, and this is a very unique sponsor. Wealthfront is a massively disruptive, in a good way, set-it-and-forget-it investing service, led by technologists from places like Apple and world-famous investors. It has exploded in popularity in the last two years, and they now have more than $2.5 billion under management. In fact, some of my very good friends, investors in Silicon Valley, have millions of their own money in Wealthfront. So the question is, why? Why is it so popular? Why is it unique? Because you can get services previously reserved for the ultra-wealthy, but only pay pennies on the dollar for them. And this is because they use smarter software instead of retail locations, bloated sales teams, etc. And I'll come back to that in a second.

• 1:05Tim Ferriss?

  I suggest you check out wealthfront.com/tim. Take the risk assessment quiz, which only takes two to five minutes, and they'll show you for free exactly the portfolio they'd put you in. And if you just want to take their advice, run with it, do it yourself, you can do that. Or, as I would, you can set it and forget it. And here's why. The value of Wealthfront is in the automation of habits and strategies that investors should be using on a regular basis but normally aren't. Great investing is a marathon, not a sprint, and little things that you may or may not be familiar with, like automatic tax-loss harvesting, rebalancing your portfolio across more than 10 asset classes, and dividend reinvestment, add up to very large amounts of money over longer periods of time. Wealthfront, as I mentioned, since it's using software instead of retail locations, etc.,

• 1:50Tim Ferriss?

  can offer all of this at low costs that were previously completely impossible. Right off the bat, you never pay commissions or account fees. For everything, they charge 0.25% per year on assets above the first 15,000, which is managed for free if you use my link, wealthfront.com/tim. That is less than $5 a month to invest. Invest a $30,000 account, for instance. Now, normally, when I have a sponsor on the show, it's because I use them and recommend them. In this case, it's a little different. I don't use Wealthfront yet because I'm not allowed to. Here's the deal. They wanted to sponsor this podcast, but because of SEC regulations, companies that invest your money are not allowed to use client testimonials. So I couldn't be a user and have them on the podcast.

• 2:33Tim Ferriss?

  But I've been so impressed by Wealthfront that I've invested a significant amount of my own money, at least for me, in the team and the company itself. So I am an investor and hope to soon use it as a client. Now, back to the recommendation. As a Tim Ferriss Show listener, you'll get $15,000 managed for free if you decide to open an account. But just start with seeing the portfolio that they would suggest for you. Take two minutes, fill out their questionnaire at wealthfront.com/tim. It's fast, it's free. There's no downside that I can think of. This episode is brought to you by 4Sigmatic. I reached out to these Finnish entrepreneurs after a very talented acrobat introduced me to one of their products, which blew my mind in the best way possible.

• 3:17Tim Ferriss?

  It is mushroom coffee. What on earth is this? Well, it includes chaga mushroom, very powerful antioxidant, considered a superfood. I was introduced to chaga by Laird Hamilton, the king of big wave surfing of all things. And it includes another mushroom that is considered a nootropic, a smart drug, and this is lion's mane. In the entire packet, you just add it to hot water, tastes like coffee. There is only 40mg of caffeine, so less than half what you would find in a cup of coffee. So I do not get any jitters, I do not get any acid reflux or any type of stomach burn. And it put me on fire for an entire day, and I only had half of the packet. So this stuff is really amazing.

• 4:02Tim Ferriss?

  People are always asking me what I use for cognitive enhancement. Right now, this is the answer. So it is legal, it will not give you visuals, that's something else. And you can try it right now by going to 4sigmatic.com/tim. That is 4-sigmatic, S-I-G-M-A-T-I-C, 4sigmatic.com/tim. And use the code TIM to get 20% off your first order. If you are in the experimental mindset, I do not think you'll be disappointed. 4sigmatic.com/tim.

• 4:36Tim Ferriss?

  Why hello there. Haojiu bu jian. Long time no see, literally in Mandarin or Hisashibure jenekka in Japanese. This is Tim Ferriss. I'm feeling a little lightheaded and a little frisky today. And this episode is not going to be me deconstructing a world-class performer, as I usually do, an interview format over two to three hours. This is not that. This is going to be very short, hopefully very, very actionable and practical. I was asked recently how I choose my projects and what I say yes to, what I say no to. And I riffed on this and we recorded it as part of something larger that I'll be sharing in the near future.

• 5:20Tim Ferriss?

  And I realized that the real question is, at the root of a lot of my decisions, how can I waste money to improve my quality of life? And this seems like a bad thing, but it is not. It is trading pennies for dollars. So how can you waste money to improve the quality of your life? Well, I will delve into all of that and much more. This was spontaneous, it's off the cuff, so it is not a TED Talk, but I hope you will get a lot out of it. And I was encouraged to share it because people there at the time felt like folks might like it. So, please enjoy How to Waste Money to Improve Quality of Life.

• 6:02Tim Ferriss?

  How do I determine what to delegate versus what to do on my own? This is an ongoing challenge, as it is for a lot of people, but a few of the things that I consider are,

• 6:16Tim Ferriss?

  first and foremost, do I understand the task and the roles and the actions, to-do lists, checklists involved? And this is going to sound funny, and I don't think this is necessarily the best approach for everyone, but for me, as a type A perfectionist...

• 6:36Tim Ferriss?

  I like to have a base level of competency in almost anything that I delegate. And I say almost anything because I'm not a coder, for instance, so I don't need to know how to work with CSS or anything else to work with a designer, but I do know how to sketch and create mockups or wireframes. And then the, so I can work with those abstraction layers and then the levels below it, the sort of implementation of that, I don't need to understand as well. But in the case of, for instance, podcast editing, I went into a very imperfect tool, GarageBand in this case, and edited the first, probably 20 or 30 episodes because I enjoyed

• 7:21Tim Ferriss?

  learning that as I enjoyed learning new skills. But ultimately, once I understood how to refine the process, then I delegated. So to frame that another way, I think it was Bill Gates who said, and I'm paraphrasing, but this was in The Four Hour Workweek, that when you add people to an inefficient process, you make things worse. Only when you add people to an efficient process do you make things better. And there's a book called The Mythical Man Month on software design and software development that talks about this, where if you have a late software project because the underlying process has been fucked, if you add more developers to it, you're just going to make things worse. It's just going to take longer.

• 8:03Tim Ferriss?

  So I like to test drive almost every process myself first before I delegate. I think that most problems with delegation, most things that get missed, most mistakes that get made are the boss's fault, not the employees' fault or the contractor's fault. It's because the task itself wasn't clear enough in the beginning. A lot of people delegate because they don't want to do the hard thinking. You have to do the hard thinking. You should delegate because... You can give hard work to someone else or time-consuming work. So that's number one. I like to have a base level of competency with all these things. And then, how do I choose what to delegate?

• 8:46Tim Ferriss?

  I will look at my highest-yield activities. And the way I will determine that is I will look at, for instance, my to-do list, which is really a list of tasks or next actions of some type. And I'll ask myself, which one of these, if done, will make all of the rest easier to do or irrelevant? Because I'm looking for, and I've used this analogy before, the lead domino. I'm looking for the first domino. I don't want to knock down 7,000 different dominos that are downstream and have to repeat that process. I want to find the one Archimedes' lever that, when used effectively, makes everything

• 9:30Tim Ferriss?

  else either easier to do or irrelevant. And that is what I will focus on, generally speaking.

• 9:39Tim Ferriss?

  When in doubt, also, the thing that you've been avoiding the longest is the thing that you should at least do the hard thinking on first. So what is important? Like, how do I know what my most important task is to do before I check email? And the two hours that I've blocked out for that type of deep work? Whatever it is that makes you most uncomfortable. But I will look at this list, and very often, my highest-yield activity will be related to one of my more unique abilities. I'm not saying it's unique, singular to me. But, for instance, part of the reason that I took, and this is not delegation, this is elimination, so we're getting very four-hour work week here. But, right, you have definition, elimination, automation, liberation.

• 10:23Tim Ferriss?

  Okay, so before I liberate myself by delegating, I want to remove as much as possible. So, at one point, about a year ago now, I realized that I was replaceable as an investor in the startup ecosystem. The economics were such that, given deal structures and absurd things that were happening and an oversupply of capital, if I was approached by an entrepreneur who's just price-shopping for valuation, for instance, and I said no, I would just...

• 10:59Tim Ferriss?

  Head out of the line and there'll be 20 behind me to take the deal. And one of my friends said, "Please don't stop writing." He said to me, "You are replaceable as an investor, but I've seen you at conferences where people come up to you and they're crying because they lost 100 pounds and it changed their life or saved their marriages, whatever it might be. You're not going to have that impact, you're not going to see that impact at least as an investor." And therefore, I try to focus on my unique or more unique abilities as much as possible, the things that I don't think I can delegate. And ideally, I have a Venn diagram of the things that I am uniquely capable of doing

• 11:42Tim Ferriss?

  well, or somewhat uniquely capable of doing well. The things that I enjoy doing, that's the second circle, and then the things that give me a high yield. And that could be a yield of capital, financially speaking. It could give me a high yield of time. For instance, if I invest 10 hours now in creating a system and making decisions about X, for instance, not to do startup investing at all, which is what I decided, because I don't do moderation well, then you can search Startup Vacation and Tim Ferriss for a long description of how I did this. I decided, I sat down, I did journaling, and came to the conclusion by looking at worst-case

• 12:24Tim Ferriss?

  scenarios, what is the worst that could happen if, how could I get back to this point if I wanted to reverse it, etc. Decided to do no startup investing. So I did the hard thinking that eliminated 1,000 smaller decisions moving forward. Now I just archive any cold pitch that I get. Any cold intro that I get from, say, a venture capitalist to an entrepreneur gets an autoresponder that says, "I'm not doing startup investing. Here's the article if you want to read it." And that is, I think, where people should focus before delegating is eliminating as much as possible. Other things that I think about would be largely questions that I ask. So...

• 13:06Tim Ferriss?

  One of the temptations as an entrepreneur is to look at a task you delegate and say to yourself, "This is a fallacy." And the internal dialogue will be something along the lines of, "Well, I could delegate this, but it's gonna take me just as long to describe it as it will to just do it myself. So I'll just do it myself." And here's the miscalculation. The assumption is, time is the currency that you are protecting in this case. So time is the most valuable currency. And I would say that time, as much as I talk about it, is only valuable to the extent that you have attention and present state awareness.

• 13:51Tim Ferriss?

  So for instance, if I have a three-hour block set aside for deep work on writing, and there's a great essay, I think it's called "The Manager's Schedule, Maker's Schedule" by Paul Graham. Fantastic read, everyone should read it. But in effect, for me to write really effectively, and this is true for a lot of coders also, and musicians, I need, if they're composing, a lot of time set aside because there's a very long warm-up process, and to synthesize takes space, mentally and otherwise. Yes, I could have time in the middle of that to handle sending, for instance, wire instructions to my bank to get something done,

• 14:35Tim Ferriss?

  instead of having my assistant do it. It might be faster for me to do it. "I can do it in 30 seconds, it's gonna take me this much time to do blah, blah, blah." But the question is, can I afford the distraction? Even if I have to upset someone, postpone it, talk to them the next day, get it done, pay a late fee, whatever it might be. The question isn't, "Do I have the time?" It's also, "Can I afford the distraction?" Because if, in the middle of that three hours, I get a text from my assistants, like, "Really need help doing this, can you please do Y?" Whatever it might be. I don't know why I started with Y instead of X, just to throw you off. And if I address that, ideally, I don't even see the text, which is why I put my phone on airplane,

• 15:20Tim Ferriss?

  but let's just say I see it. If I address that, and I take five to 10 minutes to do it, the three-hour clock starts over. So... Maybe I get only 20 minutes of real good writing done in that period as opposed to an hour and a half. Was that worth the interruption? Even though I saved five minutes in the implementation? No, it was a complete loss. It was a total Faustian bargain. So, the book that I would recommend, and I've said this before to at least a handful of people, my favorite book on productivity is called The Effective Executive. Terribly bland title by Peter Drucker, The Effective Executive. And The Four Hour Work Week, look, I'm just assuming that people listening to this have probably already read that.

• 16:05Tim Ferriss?

  But The Effective Executive is fantastic because it focuses on being effective, doing the right things, not just doing things well. Being efficient, because you can be really good at doing things that don't matter. And the effectiveness part, so in a way, I'm not dodging the question, but I think that the vast majority of people I talk to, when they say, "Oh my God, I'm overwhelmed by X, Y, and Z. I need to hire people A, B, and C to handle it." Those tasks largely shouldn't be done in the first place. When I drill down, we have two glasses of wine and talk about their systems and so on, they haven't done the deep dive to really determine the relative value of all of these things.

• 16:49Tim Ferriss?

  They're just feeling temporarily overwhelmed, and they just want to hit the volleyball back over the net and not think about it for a while. So, that would be where I would start. And the last piece I'll throw out there, and I know this is a meandering answer, is that I've been asking myself more and more, "How can I waste money," in air quotes, "how can I waste money to improve my quality of life?" And like, pick a crazy number, right? So, if you currently spend, and this is not prudent to do if you are just scraping by and paying for your rent, this is not a place for what I'm going to suggest. But let's just say you've hit a level up in your career, and you have a little bit

• 17:34Tim Ferriss?

  of disposable income. Your behaviors may

• 17:38Tim Ferriss?

  Be tethered to a very frugal lifestyle that you once had. Where your money was a scarcer resource than your time. So for me, you know, I came out of college. My family never made much money. Very, very frugal by necessity. Then I get to college, worked as a bouncer. I worked in a library and then I figured out some other options that made a bit more money. Illustration, etc. Graduate, I'm making forty grand or so a year in Silicon Valley. At the peak of ninety-nine, prices are insane. And I found myself even a few years ago realizing, for instance, that I was blowing

• 18:20Tim Ferriss?

  hundreds of thousands of dollars of opportunity by flying economy internationally when I needed to sleep. So this is might sound funny, but I've had the budget to buy business class tickets for a very long time now. But it wasn't until about five years ago, after I went to a speaking engagement in Australia. I flew economy because I was like, what? I'm not going to spend an extra two thousand dollars on a business class ticket. Couldn't sleep at all. And was just a complete disaster for a speaking engagement that could have easily led to many, many future engagements. And I did a good job with that. It required a ton of caffeine. It required all-nighters.

• 19:05Tim Ferriss?

  And my health suffered for about a week. So it's like, okay, was the two thousand dollars worth sacrificing my health for a week and being at half-capacity? No, easily not at all. The value of my time at being at ten out of ten is far more valuable than that. Second, was it worth the potential opportunity cost of the people in the audience who could have hired me for very high-paying gigs? No, not at all. So I've modified my older behaviors that were survival behaviors to be more abundance mindset behaviors. I can always make more money. I can't create more time at this point. I can't. necessarily fix my health if I ruin it.

• 19:49Tim Ferriss?

  Right, so the question that I ask now is like, okay, my old self would view buying a business class ticket as a waste of money. What other ways can I waste money to improve my quality of life? Maybe that's hiring someone to clean. Maybe that's taking Uber instead of having a car to deal with for maintenance and insurance and parking and parking tickets and all of that bullshit. Maybe it's, who knows, fill in the blank. So I will do journaling exercises where I'll write down, okay, pick a number, let's just say that you have, I'm making this up, you have $5,000 of disposable income per month. All right, and I'm putting aside how much you need to save for whatever you want to save for. All right, so if you have college tuition to save for and so on, you need to do those calculations on your own. But let's just say you have 5,000, you can kind of do whatever you want with.

• 20:34Tim Ferriss?

  And you're currently only spending 500. And you have all of these things that are driving you crazy. All right, well, let's say I wanted to go crazy and spend $2,000 per month. If you wanted to waste, so-called waste, $2,000 a month to improve your quality of life, what would that look like? What are some crazy things that you could do? And just journal, start making a list, start writing it out, don't edit. And it's incredible what you will come up with. And you can then test it on a trial basis for a week or two. And that is how I've identified some of the smallest changes with the largest quality of life outputs imaginables by doing this very, very simple exercise.

• 21:19Tim Ferriss?

  And I hate to give so many caveats, but this does not mean that you take your whole life savings and blow it on whiskey and horse. Okay, just so we're clear, that's not what I'm recommending. And it does mean, however, that you don't, when you've reached a certain level in Maslow's hierarchy of needs, that you don't make decisions based on a survival mindset that has traveled with you from the sort of shelter food basis, if that makes sense. And it's taken me a long time to realize that. But this type of questioning and these types of journaling exercises and overall a focus on effectiveness and not efficiency, I think,

• 22:03Tim Ferriss?

  are the drivers behind, long story long, how I decide what to do myself or what to delegate.

• 22:12Tim Ferriss?

  Hey guys, this is Tim again. Just a few more things before you take off. Number one, this is Five Bullet Friday. Do you want to get a short email from me? Would you enjoy getting a short email from me every Friday? That provides a little morsel of fun before the weekend. And Five Bullet Friday is a very short email where I share the coolest things I've found or that I've been pondering over the week. That could include favorite new albums that I've discovered. It could include gizmos and gadgets and all sorts of weird shit that I've somehow dug up in the world of the esoteric as I do. It could include favorite articles that I've read and that I've shared with my close friends, for instance. And it's very short.

• 22:54Tim Ferriss?

  It's just a little tiny bite of goodness before you head off for the weekend. So if you want to receive that, check it out. Just go to 4hourworkweek.com. That's 4hourworkweek.com all spelled out. And just drop in your email and you will get the very next one. And if you sign up, I hope you enjoy it. This episode is brought to you by 4Sigmatic. I reached out to these Finnish entrepreneurs after a very talented acrobat introduced me to one of their products, which blew my mind in the best way possible. It is mushroom coffee. What on earth is this? Well, it includes chaga mushroom, very powerful antioxidant, considered a superfood.

• 23:35Tim Ferriss?

  I was introduced to chaga by Laird Hamilton, the king of big wave surfing of all things. And it includes another mushroom that is considered a nootropic, a smart drug, and this is lion's mane. In the entire packet, you just add it to hot water, tastes like coffee. There is only 40mg of caffeine, so less than half what you would find in a cup of coffee. So I do not get any jitters, I do not get any acid reflux or any type of stomach burn. And it put me on fire for an entire day and I only had half of the packet. So this stuff is really amazing. People are always asking me what I use for cognitive enhancement right now. This is the answer. So it is legal. It will not give you visuals. That's something else. And you can try it right now.

• 24:21Tim Ferriss?

  By going to foursigmatic.com/tim, that is four sigmatic, S I G M A T I C, foursigmatic.com/tim and use the code TIM to get 20% off your first order. If you are in the experimental mindset, I do not think you'll be disappointed. foursigmatic.com/tim. This episode is brought to you by Wealthfront, and this is a very unique sponsor. Wealthfront is a massively disruptive, in a good way, set it and forget it investing service led by technologists from places like Apple and world famous investors. It has exploded in popularity in the last two years and they now have more than $2.5 billion under management. In fact, some of my very good friends, investors in Silicon Valley have millions of their

• 25:06Tim Ferriss?

  own money in Wealthfront. So the question is, why? Why is it so popular? Why is it unique? Because you can get services previously reserved for the ultra wealthy, but only pay pennies on the dollar for them. And this is because they use smarter software instead of retail locations, bloated sales teams, etc. And I'll come back to that in a second. I suggest you check out wealthfront.com/tim. Take the risk assessment quiz, which only takes two to five minutes, and they'll show you for free exactly the portfolio they put you in. And if you just want to take their advice, run with it, do it yourself, you can do that. Or, as I would, you can set it and forget it. And here's why. The value of Wealthfront is in the automation of habits and strategies that investors should be using on a regular basis, but normally aren't.

• 25:49Tim Ferriss?

  Great investing is a marathon, not a sprint, and little things that you may or may not be familiar with, like automatic tax loss harvesting, rebalancing your portfolio across more than 10 asset classes, and dividend reinvestment add up to very large amounts of money over longer periods of time. Wealthfront, as I mentioned, since it's using software instead of retail locations, etc., can offer all of this at low costs that were previously completely impossible. Right off the bat, you never pay commissions or account fees. For everything, they charge 0.25% per year on assets above the first $15,000, which is managed for free if you use my link, wealthfront.com/tim. That is less than $5 a month to invest a $30,000 account, for instance. Now normally, when I have a sponsor on the show, it's because I use them and recommend

• 26:34Tim Ferriss?

  them. In this case, it's a little different. I don't use Wealthfront yet because I'm not allowed to. Here's the deal. They wanted to sponsor this podcast, but because of SEC regulations, companies that invest your money are not allowed to use client testimonials. So I couldn't be a user and have them on the podcast. But I've been so impressed by Wealthfront that I've invested a significant amount of my own money, at least for me, in the team and the company itself. So I am an investor and hope to soon use it as a client. Now, back to the recommendation. As a Tim Ferriss Show listener, you'll get $15,000 managed for free if you decide to open an account. But just start with seeing the portfolio that they would suggest for you. Take two minutes, fill out their questionnaire at wealthfront.com/tim. It's fast, it's free.

• 27:18Tim Ferriss?

  There's no downside that I can think of.