Tim Ferris is a productivity genius.
His best-selling book, the 4-Hour Workweek, blew up the minds of a brand-new batch of entrepreneurs in 2007. The world was just discovering working from…anywhere. He was an influencer before influencers.
One of his often-revisited tricks is – oversimplification.
Have you ever started and stopped a habit that you knew was a game-changer? Why did you quit?
Game-changing habits come in many areas of life.
Buying bitcoin in 2011… (doh.)
I know I have, dozens of times. We do not succeed because we do not simplify the noise.
The endless “how-to” distract us from clear goals and even clearer accountability. Take marriage, for example. Far more marriages fail than is necessary. Why? It’s possibly as simple as this:
Marriages fail because couples rarely set a simple goal to have a great marriage.
Asking yourself, “what can I do today to have a great marriage” cuts through miles of BS around tit-for-tat everyday marriage fights that build into giant disagreements. She’s tired from watching the kids and you’re tired from a long day’s work. Both demand what they’re due, and rightly so. But a clear dedication to managing that tension at a high level, from both parties, can be the game changer in how that evening plays out — to both of your benefit. In the endless conversation of how to love your spouse well, this clear goal oversimplification comes in clutch.
Need another example, if you want to lose weight, Tim Ferriss unapologetically states that it is as easy as this:
30/30/30 Thirty grams of protein within 30 minutes of waking up, followed by 30 minutes of light cardio. That’s all you need.
Well, of course, that’s not really all, right?
Obviously, if you eat like garbage the rest of the day, don’t sleep, or drink yourself to sleep every night. You’re probably not going to see the results you’re looking for. But you’d be wrong, and here’s why. By starting the day with a ridiculously simple but clear, positive start to the day — you trick your brain into wanting to continue on that success. If you were doing this every day (30/30/30), would you be drawn to changing how you eat at night? Absolutely you would; I mean, you started the day so well, why waste that effort in the evening? Maybe you’d want to start reading about what else you could do to speed up the process. You’d probably look for a way to implement it.
Spend your energy on big, oversimplified goals and ideas rather than getting lost in the nuance.
Here’s how to use oversimplification.
Gaining wealth can be oversimplified to profit margin. If you craft a dead simple accountability to profit margin, you are almost guaranteed to increase it. Profit margin is the only metric that matters at the end of the year.
How do you create accountability to profit margin?
You’re going to start to track just 2-5 numbers on a weekly or monthly (at the very least).
If you do not have tight control of your numbers, here’s a short way to ensure you’re putting profit margin first. Start tracking this.
- How much monthly recurring revenue did you bill this month?
- How much ($) did you do in one-time sales?
- What was your total monthly expense for the month? Actual dollars out the door. Even if it’s for a future job, measure what you actually spent this month.
- What your profit margin was/is for the month? In actual dollars and in actual expenses for the calendar month. If you sold a big job, but aren’t getting paid until next month, it doesn’t count to this month. It only counts when the money hits the bank account.
Add them to a spreadsheet or notebook. Track them week after week. Monthly. Quarterly.
For now, that’s it.
I can unapologetically insist, just like Tim Ferriss, that if you stick to tracking these numbers, you will almost certainly increase your wealth.
Some of you will increase it a LOT. Do it long enough and you can become seriously rich.
If you have never tracked these numbers before, what I just asked for will seem like a big ask.
How do I calculate profit margin? What’s the best way to track MRR?
Don’t overcomplicate this. Just get started. Stay consistent.
The most important thing is to start a system and stay consistent with this oversimplified goal.
If you stick to this, the following will happen.
You’ll start to keep more profits.
You’ll stress less.
You’ll recognize wasteful spending.
You’ll feel in more control of your business and spending.
You’ll avoid stupid mistakes.
Done long enough, you can’t help getting wealthy.
Any business that can stack a 10% profit margin month over month will be stacked with extra cash in a year or two.
Be the exception, and let oversimplification lead you to massive wins!
Till next time.