Reviewed by David L. Perkins, Jr.

Unsettling. That’s the word that first comes to mind when I ponder the message in The 4-Hour Workweek.

Yes, it’s also interesting. And exciting, in a way. But unsettling because it makes me question everything.

Why do I work so hard? Is there a better way? Am I efficient and effective in my work?

Timothy Ferriss’ answer is unquestionable. “No, David Perkins. You work 50 hours per week and thus you are a sucker.”

I have always believed, and often say, “Hard work is good for the soul.” So do I simply fill up my plate with work so I can feel good about myself?

More to the point, am I really happy working this much?

Is there a better way? A more rewarding way?

Timothy Ferriss, author of The 4-Hour Workweek, is one strange dude. He’s apparently a best-selling author, highly paid speaker, angel investor, and owner of a profitable business (so he says), but he also says he answers email just once a day, has not had an in-person meeting in something like five years, keeps phone conversations to minutes, and spends half his time traveling overseas and does not accept any phone calls while away — even for “emergencies.”

Unquestionably, Ferriss is a different breed of cat. He says he does not answer his own phone, but rather lets all calls go to voice mail, which then automatically emails him a text version of the message. He’s just 32 years old; he says he was accepted to Princeton despite being vastly unqualified; and he became world champion of Chinese kickboxing in 1999 after just four months in the sport. How? He dropped shocking amounts of weight (doctor assisted) before weigh-in and then using his size/strength advantage to throw every single one of his opponents out of the ring. Oh, and he holds the Guinness Book of World Records record for most consecutive tango-spins in one minute. Huh?

Of course, innovations are not made by conformists. It’s the oddballs who change everything. Darwin would have loved this guy.

The 4-Hour Workweek is packed with tools, tips and tales designed to shake us out of our “work like a dog until retirement” style of living and get us to start living today. How? By redesigning our work lives so we reduce our workload and quadruple productivity and profit. He says it’s more than possible. He’s living proof.

Throughout the books, he shows his youth. He seems to think happiness is about being able to regularly take exotic, extreme adventures around the world. Even so, I guess we can do what we want with any spare time and cash we’re able to carve out by applying his suggestions.

Nina Zagat has been dining with clients three days a week for 30 years. It’s her business. She owns – with her husband – Zagat Survey restaurant guides. In a recent Wall Street Journal article, she suggested ways to make the most of business lunches and dinners.

She says the main goal should be to get to know each other on a personal level and have a pleasant experience. “The feeling that (all) the people should come away with at the end of the business dinner is that they’ve had a really nice conversation, met interesting people and had a good time,” she said. To help make that possible, she suggests:

• Select a location that fits your companion’s location and culinary preferences.
• Choose a restaurant that is not too loud. Restaurants with smaller rooms and tables that are spread comfortably apart tend to be better choices.
• For larger groups, let the most important guest (not you) sit at the end of the table. Better still would be a round table – they’re more conducive to conversation among all.
• When being seated, the host or hostess should ask the guest of honor or business partner to sit at his or her right. When dining a deux, just ask your dining partner where he or she would like to sit.
• At a business dinner or lunch you’re not trying to draw attention to yourself or what you’re eating. The food or drink should not become a topic of focus. Don’t order difficult-to-handle foods such as lobster, crab or spaghetti, and be discreet about your own preferences and needs such as food allergies or dietary requirements.
• Don’t bring up any hard business-related topics until the entree is served. This leaves ample time before and after the entree for comfortable, non-business chitchat in line with getting to know each other on a personal level and having a relaxing and pleasant time together.
• It’s okay to order half portions or offer to share an appetizer or dessert.
• Take care not to appear flashy or spendthrift by ordering, for example, the most expensive entree or wine. In fact, it’s a good idea to ask the waiter for a suggestion on a low or moderately priced wine – even asking for suggestions in the x price range – and quietly accept one.
• Acceptable topics of conversation can be quite broad, even including politics. After all, the goal is to get to know each other. If the conversation starts to get emotional or heated, just move to another topic.
• It’s okay to pick up a cell phone to refer to a note or email that is relevant to a topic of conversation, but don’t leave it on the table and don’t let it ring.

Mrs. Zagat’s suggestions ring true. She focuses on developing relationships rather than silly rules of etiquette.

Reviewed by David Perkins

Want to know where the economy is headed? The stock market? Inflation and interest rates? Dr. Gary Shilling tells you. The only question is whether you believe him. He apparently has correctly forecast recessions and interest rate trends over the past 40 years. He’s foretold the Internet stock collapse of 2000 and the global real estate and mortgage debacle in which we are now mired.

Who is this seer?

He’s no slipper-footed swami. He’s an economist. He studies the pages of history and analyzes mountains of macroeconomic, socio-demographic and financial data — past and present — and spots unsustainable irregularities and instances where history is repeating itself. He’s able to look into layers of data and see weather patterns where most see just clouds.

How does he do it? He’s an intellectual cyborg. Bachelor’s in physics from Amherst, magna cum laude. Master’s and doctorate in economics from Stanford. He worked for The Fed while in his 20s and became chief economist for Merrill Lynch at the age of 29. He’s an economic advisor to investors and institutions across the globe and former member of the New York Stock Exchange. He has been named one of the world’s top stock market forecasters. He’s made a fortune investing his own funds. For example, he was an advisor to and co-investor with John Paulson (Paulson and Co.), who earned $20 billion in 2009 betting correctly on the collapse of collateralized debt obligation (CDO) securities.

In The Age of Deleveraging, Shilling tells us where he thinks the economy is headed and why. He also tells us where he thinks we should put our money in the years ahead. The Age of Deleveraging is fresh off the press. The foreword is dated May 2010 and the copyright is 2011.

Shilling says the coming decade will be marked by lower levels of consumer expenditures. The reason? Aging U.S. baby boomers will finally turn in earnest toward padding their financial nests for retirement. Real estate values have collapsed and home value appreciation can no longer be counted on. So consumers are amending their big-borrowing and big-spending ways. Savings rates will rise and spending will fall.

The impact? Low levels of economic growth worldwide.

U.S. consumer spending accounts for a whopping two-thirds of U.S. GDP and is the locomotive that pulls the entire world economy. Any sustained reduction in consumer spending will result in lower levels of economic growth. Slack demand — for everything from cars and houses to travel and entertainment — will result in excess supply and cutthroat price competition. As a result, deflation poses a far greater threat than inflation.

What can the business owner do with this information?

• Read the book. Don’t rely on this summary.
• Be cautious about adding capacity. Revenue growth may not be there to support it. Focus instead on cost reduction and efficiency enhancement.
• Pay down debt. Profit growth will be difficult. Survival could at times hinge on who has the lowest cash flow burden.

According to Dr. Shilling, the next 10 years will be more like the 1950s than the 1980s, 1990s or 2000s. It will become cool again to be thrifty and practical. It’s what we need to pay down debt at the personal, corporate and governmental levels, but it won’t be good for the economy or stock market.

The Association of Marketing and Communication Professionalschose The Business Owner Journal for three “2010 Hermes Creative Awards,” including a Platinum “Hermes” for Writing and Overall Editorial Content. Stephanie Coit, ublisher of The Business Owner Journal, accepted the award alongside her peers from organizations such as Cisco Systems, Booz Allen Hamilton, American Express, GEICO, Symantec and Wells Fargo.

Hermes Creative Awards are an international competition for creative professionals involved in the concept, writing and design of traditional materials and programs, and emerging technologies. Hermes Creative Awards are administered and judged by the Association of Marketing and Communication Professionals. The international organization comprises several thousand marketing, communication, advertising, public relations, media production, Web and freelance professionals. The association oversees awards and recognition programs, provides judges and sets standards for excellence.

The International Academy of the Visual Arts (IAVA) recently awarded The Business Owner Journal with two Silver “Communicator” awards, one each for best Business-to-Business Publication and Overall Publishing. IAVA member-voters include executives from organizations such as Coach, Disney, The Ellen DeGeneres Show, Estee Lauder, HBO, MTV, Sotheby’s Institute of Art, Victoria’s Secret, Wired and Yahoo!

The Communicator Awards are the leading international awards program honoring creative excellence for communication professionals. Founded by communication professionals more than a decade ago, the Communicator Awards receive more than 9,000 entries from companies and agencies of all sizes, making them one of the largest awards programs of their kind in the world.

At the 2010 Editorial and Marketing Awards Gala in Washington, D.C., the Specialized Information Publishers Foundation recognized The Business Owner Journal’s Web-based offerings (TheBusinessOwner.com) with Honorable Mention for “Best Interactive Content.” Winners in other categories included Harvard Health Publications and Nonprofit Business Advisor (a John Wiley publication).

The Specialized Information Publishers Foundation (SIPF) is a nonprofit foundation affiliated with the Specialized Information Publishers Association (SIPA), an international trade association dedicated to advancing the interests of for-profit subscription newsletter publishers and specialized-information services. SIPF promotes specialized-information publishing through outreach to academic and professional institutions, facilitation of research, and recognition of excellence in the field through its annual Editorial and Marketing Awards.

“Our staff has worked incredibly hard to enhance both the quality of the content and the look and feel of the product,” said publisher Stephanie Coit. “We take great pride in our work, and it is an honor to serve owners of small and midsize U.S. companies with the information they need to survive and thrive.”

Check out the chart below. It displays the historical index of leading indicators compiled and published by e-forecasting.com. The gray bars are recessions. As you can see, the index tends to dip in the months prior to a recession and rise before the end of the recession and through the expansion. Economists have identified economic data that tend to positively correlate with future economic conditions. That is, changes in these indicators tend to precede changes in overall economic activity.

Leading Economic Indicator Index

The federal government (Conference Board) has settled on 10 so-called leading indicators. It tracks them and publishes the data monthly. Possibly more useful is the index of leading indicators, similar to the one compiled by e-forecasting.com. An index is a compilation of indicators. You can view the federal government’s index of leading indicators at www.conference-board.org/data. You also can sign up to receive email alerts when new data are released.

Here are the 10 indicators used and tracked by the federal government:

Money supply (M2)

When the money supply does not keep pace with inflation, bank lending may fall in real terms, making it more difficult for the economy to expand. M2 includes currency, demand deposits, other checkable deposits, travelers checks, savings deposits, small-denomination time deposits and balances in money market mutual funds. The inflation adjustment is based on the implicit deflator for personal consumption expenditures. This data set is given the largest weight in the overall LEI index, a full 35.8 percent.

Average weekly hours, manufacturing

The average hours worked per week by production workers in manufacturing industries tend to lead the business cycle because employers usually adjust work hours before increasing or decreasing their workforce. This data set is given the second largest weight in the overall LEI index — 25.5 percent. For current and recent historical average wage data

Interest rate spread, 10-year Treasury bonds less federal funds

The spread or difference between long and short rates is often called the yield curve. This series is constructed using the 10-year Treasury bond rate and the federal funds rate, an overnight interbank borrowing rate. It is felt to be an indicator of the stance of monetary policy and general financial conditions because it rises when short rates are relatively low (high). When it becomes negative (i.e., short rates are higher than long rates and the yield curve inverts), its record as an indicator of recessions is particularly strong. This data set is given the third largest weight toward the overall LEI index, 9.9 percent.

Average weekly initial claims for unemployment insurance

The number of new claims filed for unemployment insurance is typically more sensitive than either total employment or unemployment to overall business conditions, and this series tends to lead the business cycle. It is inverted when included in the leading index; the signs of the month-to-month changes are reversed because initial claims increase when employment conditions worsen (i.e., layoffs rise and new hiring falls). For current and recent historical initial claims for unemployment, see the graph below.

Manufacturers’ new orders for consumer goods and materials

These goods are primarily used by consumers. The inflation-adjusted value of new orders leads actual production because new orders directly affect the level of both unfilled orders and inventories that firms monitor when making production decisions.

Manufacturers’ new orders, non-defense capital goods

New orders received by manufacturers in non-defense capital goods industries (in inflation-adjusted dollars) are the producers’ counterpart to the consumer orders index, above.

Index of supplier deliveries — vendor performance

This index measures the relative speed at which industrial companies receive deliveries from their suppliers. Slowdowns in deliveries increase this series, and they are most often associated with increases in demand for manufacturing supplies rather than negative shocks to supplies. This index, therefore, tends to lead the business cycle. Vendor performance is based on a monthly survey conducted by the Institute for Supply Management that asks purchasing managers whether deliveries from their suppliers have been faster, slower or the same as the previous month. The slower-deliveries diffusion index counts the proportion of respondents reporting slower deliveries plus one-half of the proportion reporting no change in delivery speed.

Building permits, new private housing units

The number of residential building permits issued is an indicator of construction activity, which typically leads most other types of economic production.

Stock prices

The Standard & Poor’s 500 stock index reflects the price movements of a broad selection of common stocks traded on the New York Stock Exchange. Increases (decreases) of the stock index can reflect both the general sentiments of investors and the movements of interest rates, usually another good indicator for future economic activity.

Index of consumer expectations

This index reflects changes in consumer attitudes about future economic conditions and, therefore, is the only indicator in the leading index that is completely expectation-based. Data are collected in a monthly survey conducted by the University of Michigan’s Survey Research Center. Responses to the questions about various economic conditions are classified as positive, negative or unchanged.

If you are unsure about where the broader economy is headed, it might make sense to check an index of leading indicators. The U.S. Conference Board is the most widely used. Other private indexes, such as the one compiled by e-forecasting.com, also should provide reliable data that can help you decide when to invest for growth and when to pull back.

To grow your business, you must continually entice new people to give you a try. To buy something from you. And because they don’t have actual experience with you or your products, they make their purchase decision based on signals of quality, integrity and dependability. “Symbolic gestures,” as Quy Huy and Christoph Zott call them.

Symbolic gestures can be made in all sorts of ways. Commonly it’s things such as your appearance; your business card or brochure; the look and feel of your website; the way you answer the phone; your customer testimonials; your well-appointed office space; your impeccably planned social event; your thoughtful follow-up note; your fine customized gift; or you associating with prestigious persons or organizations.

As described in the article “Trust Me,” Huy and Zott interviewed 28 entrepreneurs seeking funding for their venture. They found that the ones who eventually succeeded tended to be “masters of the symbolic gesture.” They refer to it as sending messages of credibility and professionalism.

They also found that success tends to follow those who can persuasively explain how they are personally committed to the project. Why he or she is uniquely committed to the venture’s success. Huy and Zott says that to convey this requires getting personal. To reveal more of yourself. To share, on a personal level, why you the entrepreneur are deeply committed to the venture, product or service.

We’re talking about communicating to clients, potential clients, employees, potential employees, vendors, potential vendors, and the media through symbolic gestures that convey your quality, integrity, professionalism, commitment and passion.

People judge a book by its cover. Perception is reality.

The most successful entrepreneurs tended to be “masters of the symbolic gesture.” Persons who regularly go out of their way to demonstrate a commitment to quality, such as going the extra mile to ensure that presentation attendees and website visitors, or impromptu guests at their offices, for example, have a first-class experience.

* Wall Street Journal, November 30, 2009, “Trust Me”

Plan by the month, not by the year. Keep a daily log of three things: bookings, cash collections and owner withdrawals.

These are Mark LeBlanc’s suggestions. He’s a veteran of the public-speaking circuit. You know: land speaking gigs, sell books at the back of the room, do some consulting and coaching.

It’s not an easy business. Scores are lured each year by the glamour of getting paid handsomely to travel the globe and entertain groups over lunch or dinner. Many try. Few make it. It’s a business, to be sure, and like every business, it’s not nearly as glamorous as it looks and a whole lot more work than people realize. Few find enduring success. Mark LeBlanc apparently has, and he started out 25 years ago with little more than determination.

The niche he’s carved out helps business owners grow their businesses. He’s written a little book aptly titled Growing Your Business! I attended a presentation by LeBlanc to a group of public speakers. Aspiring public speakers, I think it’s safe to say. His advice?

• Focus on just three things: bookings, cash received and owner withdrawals. Track each on a daily, monthly and rolling 12-month basis. Keep all three rising.
• Set goals monthly. Setting goals and having focus are important. Most of us do the first of each year. So when you’re off track by the third week of January, why let another 49 weeks go by? What kind of goals should you set each month? Just one: bookings. Each month, set a goal for bookings. LeBlanc calls it your “optimistic number” for the month. Then work each day to hit your optimistic number.

LeBlanc offered the following advice to keep focused. Each morning ask yourself:

What am I going to do today to book my optimistic number for the month?

Then each evening ask yourself:

What did I do today to book my optimistic number for the month?

At the break, I explained to LeBlanc that this is all simple until you’re swamped with work. When you’re busy, all this prospecting goes out the window. He understood, of course, but said if you want to continually make more money, you must continually focus on the three key things: bookings, cash collections and take-home pay. Yes, you must deliver your service and handle administrative duties such as collections, but your job is to figure out how you can get the work done and also continually focus on growth.

He said business owners also tend to get distracted on all kinds of things that don’t contribute directly to booking revenue and taking more money home. Focus on the three essentials and the unproductive activities will automatically fall away. I like LeBlanc’s advice. It’s simple. Makes sense to me.

Recency Bias: tendency to be overly influenced by recent events.

Our memory of recent events is more salient than those of more distant experiences. This seemingly innocuous memory trait can seriously warp our ability to see the world objectively. And because our actions are influenced by our experiences and beliefs, overemphasis on recent events leads to skewed beliefs and inappropriate assessments.

During the bull market of 2003-2008, many investors lost sight of the long-term history of the stock market. They invested as if the future would mirror the more recent past (i.e., steady gains). This occurred in the real estate market, too. But an objective review of the facts would have led one to conclude that the stock market goes up AND down, sometimes way down, and the real estate industry has long been marked by boom-and-bust cycles.

Loss Aversion Bias: tendency to place a higher value on risk avoidance than gain.

Investment involves risk, so persons with a high degree of risk aversion tend to make poorer investment decisions. For example, an overwhelming amount of data supports that the stock market is the best option for at least a portion of one’s long-term investment dollars, but many avoid the market for fear of loss. They choose to invest in more “safe” investments, such as U.S. government bonds, though statistics show that the choice is almost guaranteed to result in substantially lower long-term returns.

Loss aversion plays out with investors in another interesting way — unwillingness to accept loss. So investors deal with a losing investment by rationalizing that it’s not a loss unless and until it is realized, meaning that until they sell out of the position at a loss, they hold onto it. They watch it go all the way to zero instead of doing the rational thing — cutting their losses early and getting their money redeployed into more promising and higher-yielding investments.

Finally, car rental companies prey on this by getting us to buy additional “damage waiver” insurance, and phone companies try to get us to accept flat-fee service to avoid the risk of getting a surprise bill.

Overconfidence Bias: tendency to overestimate one’s own abilities.

Studies show that people tend to overestimate their intellect and abilities. For example, in a spelling task, students scored an 80% on average when they were “100% certain” that they scored 100%.1 Similar to this is optimism bias — the tendency for people to be overoptimistic about the outcome of current efforts or planned actions. This includes overestimating the likelihood of positive outcomes and underestimating the likelihood of negative outcomes, such as graduate school students overestimating the number of job offers they’ll get and starting salary.

It seems that we develop beliefs and then look for supporting evidence. So experts suggest we try looking for evidence that refutes a conclusion or theory that we’ve concocted. Ask others to “poke holes ” or provide refuting information.

Commitment Bias: tendency to support or justify a past decision in the face of contrary evidence.

Irrational loyalty to an old strategy that was previously successful (staying the course) is not in our best interest. Some catastrophic airplane crashes have been the result of commitment bias. Pilots develop a myopic focus on their commitment to on-time arrivals and departures, and ignore clear and obvious danger signs.

Businesses fall prey to commitment bias, too. Experts suggest we step back from the project or task at hand and ask, “If I were just arriving on the scene and reviewed the facts, is this solution the rational one?”

Anchoring Bias: tendency to rely too heavily on one trait or piece of information when making decisions.

When I was a senior in high school, the college I was slated to attend had a very active fraternity/sorority system. I didn’t know which would be best for me, but then I overheard a beautiful older woman say, “Sigma Alpha Epsilon is the best.” That’s all that mattered to me. I ignored every other piece of information and signed SAE. Clearly, my decision was irrationally anchored to a very small piece of information.

Another example is overreliance on the beginning price (i.e., asking price) in negotiating purchase of goods or services. “Hey, this MUST be a good deal, it’s 30% off the asking price.” The subject buyer has anchored his/her assessment of “fair price” or “value” on a single piece of largely irrelevant information — the asking price.

Finally, anchoring bias plays out in everyday life in the tendency of some people to let a single, terrible event dominate their psyche and decision making, such as when an individual avoids investing in the stock market because of a bad prior investment.

Value Attribution: tendency to place value on a person or thing based on a very limited piece of data.

First impressions work this way. When we know very little about a person or thing, we — consciously or subconsciously — imbue him, her or it with the qualities we perceive in the things in close proximity, such as the clothes or surroundings. This is why consumer product manufacturers try so hard to get their products seen with famous people. It’s why packaging matters and Mercedes dealerships are spotless and marble-clad.

But if we want to make better decisions, we must keep in mind that context clouds our ability to see real attributes. We may turn down a pitch or idea presented by the “wrong” person, or blindly follow the advice of someone we highly regard. Similarly, our expectations of “context” influence our assessments. Value attribution bias hinders our ability to objectively assess value. Studies show that the price we pay for a ticket affects our enjoyment of the performance. So make a conscious effort to see things for what they really are and not just how they appear to be. Differentiate between “packaging” and real attributes. Initial impressions can be wrong, of course.

No cure-alls protect you from these biases, but here are some suggestions. First, when you face a financial or business decision and the stress level is high, step back. Take a break, remove yourself from the stress and revisit the decision after you cool down.

Second, if it’s a transaction or business deal you’re already in, ask yourself, “If I were just appearing on the scene, would I get in today at the current terms or would I decline?”

Third, run the facts by a person you trust. Don’t argue with his or her answers, just give him/her the facts as best you can, and gain his/her thoughts and perspectives.

Fourth, once you have developed your interpretation or viewpoint, test it. Look for refuting evidence.

Fifth, remember Warren Buffett’s #1 Rule of Investing — Margin of Error. Our ability to assess and predict is imperfect, so leave a lot of room for error.

Finally, be willing to cut your losses. Get out with what you can and move on to more promising endeavors.

_{1 Adams, P. A. & Adams, J. K . (1960). Confidence in the recognition and reproduction of words difficult to spell. American Journal of Psychology, 73 pp. 544-552.}

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