Wise use of your time is critical as entrepreneurs and investors. We all have more projects than we do time in the day.
But the traditional word “time management” never struck me as extremely helpful. Management to me means getting more efficient at organizing and dealing with the thousands of stimuli in your life.
You could be very efficient at managing hundreds of emails, calls, and tasks per day yet still never accomplish anything significant. This was the main message of the following quote by 20th century business innovator Peter Drucker:
There is nothing quite so useless, as doing with great efficiency, something that should not be done at all.”
Efficiency is nice when needed. But I also like the idea of elegant efficiency. Economy of effort. Purposefulness. Focus. Space. Creativity.
You could call this the “anti-time management” philosophy.
I first got into this philosophy when I read about The Urgent and Important in the 7 Habits of Highly Effective People. Then I absorbed more great ideas on anti-time management from the The 4-Hour Work Week by Tim Ferriss.
In the rest of this article, I’ll unpack two of my favorite ideas from The 4-Hour Workweek called The 80:20 Principle and Parkinson’s Law.
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The 80:20 Principle
Just a few words on time management: Forget all about it.
In the strictest sense, you shouldn’t be trying to do more in each day, trying to fill every second with a work fidget of some type… Being busy is most often used as a guise for avoiding the few critically important but uncomfortable actions … In fact, if you want to move up the ladder in most of corporate America, and assuming they don’t really check what you are doing (let’s be honest), just run around the office holding a cell phone to your head and carrying papers. Now, that is one busy employee! Give them a raise.”
Timothy Ferriss, The 4-Hour Workweek
If you are frustrated because you are always busy and rarely get everything done, the solution is not just to become more efficient. Efficiency is creating 500 filters and labels to process the 1,000 daily emails, 98% of which are not important.
Effectiveness, on the other hand, is only checking and responding to the emails that matter most and delaying or eliminating what matters least.
So how do you decide what matters most? Enter the 80:20 principle.
The 80:20 principle is a popularized term for a discovery by an Italian economist named Vilfredo Pareto. Pareto noticed that 80% of the wealth and income was produced and possessed by 20% of the population. But he also noticed the rule in other many other places, like 80% of his garden peas were produced by 20% of the plants.
This is relevant to us because 80% of the results you want are coming from 20% of the time and effort you’re spending. Sometimes this ratio is even more skewed, like 90:10 or 99:1.
When I first learned this principle, I did an exercise that changed my life. Do you want to try it? If so, ask and answer these questions:
1. Which 20% of sources are causing 80% of my problems and unhappiness?
2. Which 20% of sources are resulting in 80% of my desired outcomes and happiness?
When I did this exercise in many areas of my life and business, I experienced some dramatic results.
With our rental properties I discovered, for example, that over 80% of the problems from our tenants were coming from less than 20% of our properties. Guess which ones we decided to sell? Rent collecting has now become much less of a hassle.
With our real estate acquisitions, I discovered that we spent 80% of our time trying to buy short sales, yet it represented less than 20% of our revenue. We eliminated that strategy and spent more time on more productive ones. Our income increased as a result.
With my personal time in the business, I discovered that talking to qualified sellers was BY FAR the most valuable, effective, money-earning use of my time. I was good at it, and it was one of the hardest parts of the business for other people. So I began measuring the success of my day by how many seller conversations I had. I also began creating systems to leverage my time, like lead generation from direct mail, ads, and other marketing. The result was the purchase of many more deals than before.
With my personal life, I realized that a HUGE part of my long-term happiness was a result of time invested in certain activities, like exercise, reading for pleasure, and spending time with my wife and family. So I’ve gotten better (although I’m far from perfect!) at scheduling these activities first. I’ve also learned to eliminate less important activities like T.V., useless meetings, and unimportant phone calls or emails.
If you do this 80:20 exercise, I promise you that you’ll find obvious improvements. And if you really follow through on the lessons you learn, you can transform the results in many areas of your life.
Parkinson’s Law: Time Allotted = Time Used
Parkinson’s Law dictates that a task will swell in (perceived) importance and complexity in relation to the time allotted for its completion. It is the magic of the immediate deadline. If I give you 24 hours to complete a project, the time pressure forces you to focus on execution, and you have no choice but to do only the bare essentials. If I give you a week to complete the same task, it’s six days of making a mountain out of a mole hill. If I give you two months, God forbid, it becomes a mental monster. The end product of a shorter deadline is almost inevitably of equal or higher quality due to greater focus.”
Timothy Ferriss, The 4-Hour Workweek
I have known about Parkinson’s Law long before I studied it. In college I always had too much on my plate between a grueling football schedule and difficult classes. Yet, I almost always achieved my best grades during the busiest times, like football seasons.
I remember a Biochemistry class, for example, where before the big exam some of my friends in the class studied for hours and hours in order to prepare. I was at practice, doing media interviews, or healing my football wounds in the training room, so I probably studied 1 hour for every 5 that my classmates did. In the end, however, my classmates got an A but so did I.
It wasn’t that I was smarter. It was that I knew I had less time, so I focused more intensely during class and more intensely during my limited study periods. Focused, intense attention for a short period of time often trumps extended, lazy attention over a long period of time.
How do you use this law in your life and business?
1st – Use a Timer
Set the timer on your watch or phone when you do an activity. Give yourself a set amount of time to finish, and push yourself to get it done during that time.
2nd – Batch like activities together
Don’t check email or make calls constantly throughout the day. Do it once or twice per day, and limit how much time you have to complete it.
3rd Eliminate distractions and interruptions
If you’re working on something important, turn off the cell phone, get rid of notifications, close the door, and put a “do not disturb” sign on it. Decide to focus on one thing and one thing only until it’s complete.
Once you’ve applied some of the practical tips above, I also recommend that you journal on some of these awesome questions that Tim Ferriss offered in the book to bring both Parkinson’s Law and the 80:20 Principle home:
- If you had a heart attack and had to work two hours per day, what would you do?
- If you had a gun to your head and had to stop doing 4/5th of different time-consuming activities, what would you remove?
- What are the top 3 activities that you use to fill your time to feel as though you’ve been productive?
- If this is the only thing you accomplish today, will you be satisfied with your day? (I use a variation of this question daily).
- What will happen if you don’t do this? (Helps to judge the importance of activities)
Exploring your answers to these kinds of questions can lead to major breakthroughs. They force you to use your imagination and push yourself beyond your comfort zone.
When you ask the questions over and over, your mind will continue to surprise you with insights. Slowly but surely the answers you come up with will change your relationship to work and to time.
Have you applied the 80:20 Principle or Parkinson’s Law in your life? How have they been helpful for you? What activities have you eliminated or done less of in order to become more effective with your time? I’d love to hear from you in the comments below.
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Brian - Rental Mindset says
Excellent book that is so much more than the title!
I’m curious to hear – now that you eliminated short sells, where do you get your best deals?
Chad Carson says
We still did short sales since that time, but we were very selective and let realtors handle the back and forth with the seller. But we focused more on owners with equity (landlords and long-time residents), some MLS/REOs, some estates/inheritances, and a lots of referrals. Building up referrals took a little while, but it’s been the gift that keeps on giving.
What about you? What sources have been good for you?
Brian - Rental Mindset says
Very cool. I am doing all turnkey right now, so relying on people who run a business (like you) to do the work!
Chad Carson says
Turnkey. That’s right. As long as the numbers and the fundamentals work, it really doesn’t matter where you get it from, does it?
Hi Chad, We built and self manage a good sized rental portfolio, no effort really.
What are you doing for your new deal leads, exactly? 🙂 I’m wanting to move to creative deals and away from banks, so marketing for the seller for whom a lease / option buy or subject too is the head scratcher?
Chad Carson says
Hey Curt, the last few years we’ve purchased fewer, bigger deals – maybe 3-5 per year. These have been small multifamily properties and some single families. Most of the deals were referrals from realtors or commercial agents who just sent the deals my way. Others were direct mail to specific lists, like tax liens or absentee owners. When I do market, I just try to market to sellers likely to have equity and then screen for motivation/terms as they call. Nothing too special. It’s more like fishing with a net, and some of them will end up being creative terms with the seller, others will be cash outs. Subject-to is a minor tool for me I don’t use often. Lease options are similar. I like them in certain cases, but just not as many situations have been a fit for those as other solutions in my world.
Got it Chad. Where do you get your tax lien lists?
Rebogateway.com has late taxes depending on the state / county. Spotty data in GA.
I see realist/realfast has a deed type filter.
What would you say are the highest converting lead source? I know you don’t do this much but still asking for your oppinion. Absentee as the only criteria is weak these days. You need more stress/motivation. Late taxes is better, late taxes and divorce or expired are heading the right direction in combining problems up.
Chad Carson says
http://taxsaleresources.com/ is who we used most recently. Seemed pretty good.
I am with you motivation from a seller is important. But I’ve also found that a lot of deals are missed by trying to judge motivation too quickly. Not everyone has shown me their cards right away, even if they eventually sell me a good deal down the road. Particularly with buying on terms … a slow dance where you don’t push it as hard right off the bat, learn more about their situation, and build trust, seems to be a more consistent path to deals for me. Yes, I’ve also “wasted” my time on some, but I’ve found a lot of diamonds in the rough that other investors would have tried to prescreen too heavily for motivation up front. And when you focus your market really tight like I do, none of the conversations are really a waste. Connections and friendships with people are nice to have.
Scott Stamps says
Chad, great article. I’ve got to re-evaluate how i am spending my time. One specific question regarding batching activities form The 4-hour Work Week – have you had any issues with batching activities making tasks take longer than normal? Here is an example. If i only check email twice a day ( i actually like the concept), then i am only responding to people or asking questions twice a day regarding projects etc.
Sometimes email chains become quite long and i can’t imagine how long it would take to get even simple tasks completed if i only checked twice daily. This can be even more problematic when multiple people are responding to an email. Thanks for your feedback.
Chad Carson says
That is a really good question, I am not perfect on this concept of batching, but I am certainly better than I was. Specifically with email, I have tried to not use it as a means for quick communication. Especially with people on my work team, I encourage them to use google hangouts or text. I then schedule batches of time, usually in the afternoon, when I am available for back and forth communication on those media. If I manage a rehab project, I usually also need an early a.m. “available” batch so contractors can contact me with questions when they get started.
Getting a rhythm with your schedule is all an experiment, but I have found it a highly worthwhile project to work on.