The Cult Of "Productivity"

0:00 Keeping up financially has clearly become

0:02 a significant challenge for most normal people.

0:04 Between a rising cost of living, home prices,

0:07 stagnating wages, mass layoffs, and the rise of gig work,

0:10 it's becoming clear to a lot of people that simply

0:12 having a job just isn't going to cut it anymore.

0:15 In response to this bitter reality,

0:17 there's been a growing roster of people lining up to sell the solution.

0:20 On one side, there are a lot of young people

0:23 and in particular young men who have just given up completely,

0:26 closed themselves off from society, lost hope of having a career or a family,

0:30 and are occupying their time with easy,

0:32 cheap entertainment that they can excel in, like video games.

0:35 Selling a sense of pride and accomplishment

0:37 to people who don't think they can accomplish anything

0:39 and have nothing to be proud of has

0:40 become a lucrative business in it and of itself.

0:43 But on the other hand,

0:44 there is a group that has responded

0:46 to this by acknowledging that a job isn't enough anymore.

0:49 So, the solution is remote working three jobs at the same time while

0:52 day trading labu NFT features on an AI powered bet on everything platform.

0:57 If you're not sure what the any of that means, don't worry about it.

1:00 Just buy my course, bro.

1:02 Now, people selling get-richqu courses

1:04 and schemes are nothing new by themselves.

1:06 But these days, it's getting a little bit different.

1:09 For a lot of people, the selling point of these schemes is not

1:12 that they will make them filthy rich overnight,

1:14 but rather that eventually they may give

1:16 them some kind of financial stability at all.

1:19 16-our days, let me tell you about them.

1:21 They suck.

1:22 I never want to do them again.

1:24 I refuse to do them and I probably will have to do them again at some point.

1:28 I be missing out my kids life and I work a lot.

1:31 So, I be have to provide for them and I really don't

1:33 be having time to spend with them and it hurts me a lot.

1:36 80% [music] of workers say they feel stressed at work.

1:39 I have two jobs.

1:40 Saving the money is very hard because you got to deal with food every day.

1:44 Thanks to the rising cost of living and stagnating wages,

1:47 you might also want to include a side hustle

1:49 or a business project in addition to everything else.

1:52 Oh, and at some point have some time to relax

1:54 with friends and family or just get a good night's sleep.

1:57 It's a lot.

1:58 And us humans were not meant to be this switched on all the time.

2:02 So to keep you on your grind and to help you feel

2:04 a little bit less overwhelmed by everything that you need to do,

2:07 there is a new movement of pseudo self-help gurus.

2:10 These people promise to teach you

2:12 simple tricks that conveniently fit into seminars,

2:14 books, or 15-minute YouTube videos that will

2:17 help you to better organize your life, stay motivated, and achieve your goals,

2:20 even if your goal is not having to work two jobs.

2:24 It sounds helpful or at the very least harmless.

2:27 But following this advice could put you further behind for four reasons.

2:32 The first reason is that it just doesn't work.

2:35 Productivity brands and influencers have the opposite problem to influencers.

2:39 Another group that promises to fix your finances

2:41 instead of everything else in your life.

2:43 Good personal finance should be boring and simple.

2:46 Save diligently, avoid high interest debt,

2:48 maximize your income, and invest responsibly for long-term goals.

2:52 It's so simple that everything you need to know

2:54 about personal finance can fit on a post-it note, and people have done it.

2:58 That's a problem for personal finance influencers

3:01 because they make a lot of money

3:02 by posting weekly content and can't keep saying the same thing every week.

3:06 So, they end up making uninformed predictions or telling financial success

3:09 stories that were more a product of luck than diligent financial planning.

3:13 But, we have already talked enough about these guys before.

3:15 Productivity influencers have the opposite problem.

3:18 There is just too much to talk about and without

3:21 knowing each and every one of their viewer situations,

3:24 they can't come up with good suggestions.

3:26 And uninformed advice is the same thing as bad advice.

3:29 A report by Psychology Today found that so-called toxic productivity

3:33 is one of the leading causes of diagnosed anxiety and depression.

3:37 A strong focus on productivity also produces worse outcomes for everyone.

3:41 A report by the Harvard Business Review studied

3:43 employees who were fired for bad workplace behavior.

3:46 The study found that a large share of those terminated employees were

3:49 high performers in the roles but brought down everybody that worked with them.

3:53 A strong belief in their own abilities,

3:55 a strict adherence to their own routines,

3:57 and a high expectation for everybody around them made

4:00 them worse at delivering good results for the business.

4:03 The researchers found that a worker that had an intense focus on their own

4:07 productivity might return $5,3 in cost

4:10 savings to a company through increased output.

4:12 Avoiding a toxic hire will net

4:14 an estimated $12,489 because they collaborate more

4:18 easily with co-workers and clients are

4:20 less resistant to changes in the organization.

4:22 An extreme focus on productivity in your personal life can also

4:26 simply make you less productive as you spend all your time

4:28 and effort hyperoptimizing every task in your life instead of just

4:32 getting them done in a way that works for you.

4:34 Despite the crazy amount of harm this can do,

4:37 there are three terrible reasons why

4:38 the cult of productivity isn't going anywhere.

4:42 So, it's time to learn how money works to find out why

4:44 trying to become more productive is only going to make things worse.

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5:56 The number of hours Americans work has gone

5:58 down over the decades according to the OECD.

6:00 But at the same time, people report having less time to themselves.

6:04 And there are three reasons for this.

6:06 Technology has made our work easier,

6:08 but it has also made it easier to be at work.

6:11 A 2017 Gallup survey of 15,000 American workers found that 43%

6:16 of people spent at least some of their personal time working remotely.

6:19 No follow-up studies have been done,

6:21 but that figure is likely to rise with the mass

6:24 adoption of work from home from 2020 until lately.

6:27 Employers are also demanding more unpaid overtime for non-ourly workers.

6:31 And these requests are often coming at odd times reducing the amount of quality

6:35 uninterrupted free time where workers are

6:37 allowed to totally disconnect from their job.

6:39 The psychologist Adam Alter said that if you carry around a phone

6:42 that your boss or team can message or call you on at any time,

6:45 you probably haven't had real free time to yourself for years.

6:48 The second reason is that people who work are working less.

6:52 But more people are working.

6:53 A stay-at-home partner who takes care of chores, children,

6:56 and other tasks is now a luxury that most people can't afford.

7:00 A growing number of people are also remaining single for longer,

7:03 so people have to do their jobs and their chores when they get home

7:06 without the help they would have got

7:07 in the past from more traditional family units.

7:10 The third reason is simply that there are more distractions.

7:13 When was the last time you felt bored?

7:15 [music] Probably a long time ago, right?

7:18 Because today, right there in your pocket is

7:20 a phone that gives you access to games, messages,

7:22 and apps that are literally designed from the ground up to give

7:25 you dopamine on demand and are hyper optimized to keep your attention.

7:29 companies and people pushing that #hustle

7:31 mindset have undoubtedly created these problems

7:34 and they are also cashing in on the opportunity to sell you the solution.

7:37 And that's the third reason why the cult

7:39 of toxic productivity has grown so large.

7:42 It's too profitable.

7:44 According to Precision Reports, a market research firm,

7:46 the global market for productivity apps was worth 9.42 billion in 2022

7:51 and is expected to grow by 9.2% per year until 2028.

7:56 In addition to this market,

7:57 there are also people selling books, courses, consultations,

8:00 and tutorials on avoiding the world's distractions

8:03 and squeezing the most out of your day.

8:05 It's a big market for one simple reason.

8:08 People who have decided that they want

8:10 to be more productive are high intent customers,

8:12 and they are willing to spend a lot of money on a good

8:15 solution because they think of it as an investment rather than a purchase.

8:19 If someone could give you an app or a course that would let you

8:21 focus for longer and build out a side business that doubled your monthly income,

8:25 of course you would pay a lot for that.

8:26 [laughter] People seeking out ways to maximize

8:30 their productivity are also on average

8:32 wealthier as people who are into self-improvement

8:34 and are short on time often are.

8:37 This means that people can make millions of dollars very quickly if they can

8:40 amass an audience and convince them

8:42 that they have the secret to maximizing productivity.

8:44 I am going to stop short of calling these a get-rich quick scheme style grift

8:48 because I do believe that the most

8:50 popular personalities in the space like Ali Abdal,

8:53 Alex Hermoszi, and even Gary Vee really do have good

8:56 intentions with their audience and they don't intend any harm.

9:00 Some other self-improvement personalities don't care as much and just want

9:04 to get you to buy their course by any means necessary.

9:06 But even these good guys still have something to sell you.

9:09 It's a classic strategy of, "Hey, look at me.

9:11 I am rich and successful and you could be

9:13 too if you do this thing that I am selling.

9:15 A video about how someone made $10 million a year and a breakdown

9:19 of their revenue sources might genuinely be

9:21 made with the best of intentions of transparency.

9:23 But it also serves as a demonstration of how well their advice

9:26 has worked for them and how it could work for you too.

9:29 In the interest of my own transparency,

9:31 I have made the same kind of video because I

9:33 thought it was interesting and I thought it would get views.

9:36 But I don't have a course on how

9:37 to run multiple businesses or get big on YouTube.

9:40 Some of these tools these people and companies are selling are totally free,

9:43 but some can cost thousands of dollars.

9:46 And with an audience that is so intent on changing their life for the better,

9:49 it's not unusual for people to take on credit card debt to attend

9:52 a mindset conference or buy a course that they think will change their life.

9:56 Now, if you pick up some tricks that help you stay on top

9:58 of your meetings or just feel less

10:00 stressed about your everyday chores, that's great.

10:02 And if that's worth investing some money, go ahead.

10:05 But there aren't millions of people watching

10:06 this with a goal of minor improvements.

10:08 People are expecting something much bigger that simply can't be bought.

10:12 Working out how to stay focused for every hour

10:14 of the day is probably not going to radically change your life.

10:17 In my career as an investment banker,

10:19 I got to work directly with hundreds of very successful company

10:21 founders that were raising hundreds of millions of dollars for their businesses.

10:25 All of them were very busy people,

10:27 but none of them tried to optimize every hour of the working

10:30 day or work 100hour weeks to make their business a success.

10:33 It's also not fair to even compare

10:35 regular people to highly successful business people

10:37 either because they often have assistants and other staff to take care of them.

10:41 So even if they are spending long hours in the office,

10:44 they have everything else in their life taken care of.

10:46 And that's the third reason why falling into the productivity rabbit

10:49 hole can leave you much worse off in the long run,

10:52 which is that you are probably wasting your time.

10:55 This works in two ways.

10:57 So let's call them reason 3 A and reason 3B.

11:00 The first way this will end up wasting

11:01 your time is that after setting up calendars,

11:04 reminders, journals, meditation sessions,

11:06 attending seminars, and watching productivity content,

11:09 you have probably wasted more time than you will ever save

11:11 with a simple plan that you work out as you go along.

11:14 Reason 3b is a little bit more interesting, though.

11:17 Being productive is not the same as being busy.

11:20 But if you're focused on not wasting any of your time,

11:23 you are more likely to divert your attention

11:25 to things that aren't going to do you any good.

11:27 A survey conducted by 1,989 office workers

11:31 in the United Kingdom found that the average

11:33 person was on task for just 2 hours and 53 minutes a day.

11:37 Trying to optimize that time to get more done in a day

11:40 is only going to result in you being given more work to do,

11:43 which is great for the company you work for, but doesn't help you much.

11:46 Strong performance is important for career progression.

11:49 But being the guy that does the work of three normal co-workers

11:52 isn't the right way to show you're the right person for a promotion.

11:55 Being too good at your job is also one of the leading reasons that managers

11:58 have given for not promoting staff because they will be too hard to replace.

12:02 Even if you are a business owner and you do financially

12:05 benefit directly from every additional bit of work you get done,

12:08 the mindset that a lot of productivity gurus preach

12:10 is not going to make your business sustainable or scalable.

12:13 The cult of productivity is weirdly split on this.

12:16 Some people advocate working 100 weeks until you are a billionaire

12:20 and only then are you worthy of a day off.

12:22 And some argue that if you are getting paid based on how many hours you work,

12:25 you are a loser that can't properly delegate.

12:28 Rich [music] people buy time.

12:31 Poor people sell time.

12:34 How many times have you heard some variation of this phrase?

12:37 Don't sell your time for money.

12:39 You're exchanging your time for money.

12:41 And what does that mean?

12:42 Trading your time for money is a sucker's bet.

12:45 I don't want to work anymore.

12:46 I can't trade my dollars and hours.

12:47 Our country wasn't founded on this concept of trading time.

12:52 I I look at it as if if you're trading your time for money,

12:55 you're always going to be limited in how much money you can make.

12:57 This is a finance bro way of saying don't make money exclusively from a source

13:01 where you get paid x amount of dollars for y amount of work,

13:05 which is basically every job.

13:07 There are various reasons given for why selling

13:09 your time for money is a bad idea.

13:11 Like you only have so many hours in a day you can work.

13:13 So a trading your time for money limits your potential income.

13:16 B, trading your time for money also makes you

13:19 more financially vulnerable if you are unable to work.

13:21 And C, it's really hard to sell a course

13:24 on trading your time for money unless you're a college.

13:26 Although maybe don't say that last one out loud.

13:29 The alternative to trading your time for money is usually investing,

13:33 starting a business, living a wildly alternative lifestyle,

13:36 or some combination of all three of these things.

13:38 But I am here to tell you that while

13:40 this very broad phrase might have some merit in specific situations,

13:44 it's probably very much complete and you really

13:46 shouldn't take anybody who says it too seriously.

13:49 At best, the phrase, "Don't sell your time for money," is

13:52 just another example of hustle bros needlessly

13:55 bashing on regular day jobs that provide

13:57 stable living to a majority of Americans.

13:59 It also perpetuates the idea that simply

14:01 working a full-time job is not good enough and that a side hustle or whole extra

14:06 business is mandatory to get ahead these days.

14:09 They might not be wrong, but we will get to that later.

14:12 Most importantly, the thinking behind the line of don't

14:14 sell your time for money is just wrong.

14:17 Without being a trust fund baby,

14:18 there really is no way to reliably make money without investing some time.

14:23 And more importantly,

14:24 trading your time for money can be a genuinely great way to build wealth.

14:27 So, as long as you're doing it correctly,

14:29 the most common way people sell their time for money is by working at a job.

14:33 The transaction of dollars per hour is very easy to see

14:36 because it will be included in the employment contract and regular paychecks.

14:40 Problem?

14:41 Well, the person at Starbucks gets paid by the hour.

14:43 The person at the gas station gets paid by the hour.

14:45 But guess what?

14:46 Most doctors and lawyers also get paid by the hour.

14:49 An employer will buy an hour of time

14:51 from an employee for a predetermined amount of money.

14:54 This amount could be anything from minimum wage to hundreds

14:57 of dollars an hour for highly skilled and very senior employees.

15:01 Another increasingly popular way that people are selling

15:03 their time for money is through gig work,

15:05 which isn't as clear-cut as x amount of dollars for y amount of hours,

15:10 which means there's a chance for workers to take home

15:12 less than the minimum wage for the hours they put in.

15:14 But exploitive or not, gig work is just another way of selling time for money.

15:19 The gig economy could be a much better [music] option for everybody if we

15:23 untied the protections and benefits that we

15:27 have [music] created to support this full-time job.

15:29 Cool.

15:30 Great.

15:30 I'm pretty sure you all know how jobs work.

15:33 So, why am I telling you about this in such basic detail?

15:36 Well, because jobs are not the only way that we sell our time for money.

15:40 Sorry about that.

15:41 People will often spend hours clipping coupons, avoiding toll roads,

15:44 and spending their weekends trying to sell used junk

15:47 from around their house to make a few extra bucks without

15:50 realizing that the time they spent doing this was worth

15:53 a lot more than the money they made or saved.

15:55 If they were doing this to have more money

15:57 in their pocket at the end of the month,

15:59 then they would have been better off picking up a few extra hours at work.

16:02 I get it.

16:03 Some people work fixed schedules and don't have

16:05 the option to pick up more work on a whim.

16:07 But we have already seen that gig work has exploded in popularity.

16:11 So that could offer an alternative.

16:13 If you're a high-income earner,

16:14 gig work might struggle to match your regular income.

16:17 But then clipping coupons is likely to put you even further behind.

16:20 And so will most other activities for that matter.

16:23 Amongst financial professionals,

16:24 there is a type of investor called the sophisticated idiot.

16:27 A sophisticated or accredited investor is someone

16:29 who has more than a million dollars

16:31 in assets outside of their primary residence or earns more than $200,000 a year.

16:36 American financial regulators have decided that people making this kind of money

16:40 are smart enough to [music] have enough financial security to make riskier,

16:44 less regulated investments.

16:46 Medical professionals like doctors and dentists fall

16:48 into the sophisticated idiot category all the time

16:51 because they frequently make big investments that take up a lot of their time.

16:55 A dentist developing an apartment [music] complex might

16:57 be able to make a lot of money.

16:59 But investments like this can take hours of planning and oversight.

17:02 Even if they are successful,

17:04 they often walk away with less money than had they just

17:06 taken on a few more cases and stayed in the operating room.

17:09 Doctors and dentists are very smart people,

17:12 but because they don't think they're selling their time for money,

17:14 they often undervalue the money they could have

17:16 made if they weren't trying to make passive income.

17:19 Now, [music] if you love flipping properties, selling stuff on Craigslist,

17:22 or seeing how much money you can save at Walmart with your coupons,

17:25 then by all means, go ahead.

17:27 But just remember, if you are only doing this to save money,

17:30 then you are just selling your time for money in a different

17:32 way and probably not getting a great price for it in the process.

17:36 What do you want from me, man?

17:37 People not realizing that they are always going to be selling

17:40 their time for money also make the exact opposite mistake to this.

17:43 They overvalue their time.

17:46 There are things you could do right now that would only take an hour and would

17:49 save you a lot more money than you would make in an hour [music] at work.

17:52 Renegotiating insurance, utilities, and mortgages,

17:55 canceling subscriptions you never use anymore,

17:57 or applying for a new credit card with a sweet signup bonus.

18:00 All of these will take a bit of time,

18:02 but will put much more money back into your pocket than doing an extra

18:06 hour in the office because you waste [music] time on things that never pay you.

18:10 This segus us nicely into the next reason

18:13 why you should sell your time for money.

18:15 It's going to be a better way to invest for a lot of young people.

18:18 There are investments that are more passive than others.

18:21 For example, if the doctor would have just used

18:23 their money to buy a bunch of dividend stocks,

18:25 then it would have likely only taken them

18:26 a few hours to do some research and make

18:28 the purchase trades to get a well- balanced

18:30 portfolio that will pay them for decades to come.

18:32 [music] If a dentist could earn $1,000 an hour while practicing,

18:36 and it took them $5 to consult with a financial planner

18:38 that charged them another $1,000 on how

18:40 to structure a million-doll stock portfolio,

18:43 then the dentist would need to make up $6,000

18:45 for this to have been a good use of their time.

18:47 A million-doll portfolio should return between $50,000

18:50 and $100,000 per year over the long term.

18:53 So, it would take roughly a month

18:55 for the dentist to get ahead on this investment.

18:57 This was a good way for the dentist to sell their time for money.

19:00 And that's using very generous figures for how

19:02 much that dentist could make at their practice.

19:04 But the math doesn't work like this for most people.

19:07 Most people earn much less, but also have less to invest.

19:11 A regular professional making $15 an hour

19:13 with $1,000 to invest really shouldn't overthink things.

19:17 Even if they make phenomenal returns of 100% per year by day trading

19:21 using techniques they picked up from some totally legit guy on the internet,

19:25 that's still only $1,000 a year.

19:27 And before you start talking about compounding returns in the comment section,

19:31 may I remind you that the greatest hedge fund

19:33 of all time only made 60% annualized returns before fees.

19:37 So, if you really think some random guy is going to make 100%

19:40 annualized returns after watching a tutorial

19:42 from some random guy on the internet,

19:44 then I have truly failed to teach you how money works.

19:47 Anyway, the problem is that because working for money gets such a bad rap

19:51 and passive income is continuously held up

19:53 as the holy grail of financial success,

19:55 a lot of people choose to make small investments with money

19:58 [music] that would have been way better spent increasing their earnings power.

20:01 $1,000 can pay for qualifications to do a lot

20:04 of jobs that pay significantly more than minimum wage.

20:07 Now, I'm not talking about online courses or college degrees.

20:10 I am talking about real work qualifications

20:13 to do work that require specialized training.

20:16 If you have some technical skill,

20:17 a coding boot camp can get you an entry-level job as a software engineer.

20:21 It might not be Google, but you could still be earning a lot more than

20:24 minimum wage plus the passive income from a $1,000 stock portfolio.

20:28 Working on acquiring qualifications and marketable skills is not

20:32 as sexy to most people as picking the next Tesla,

20:35 but it's a much more reliable way to make money.

20:37 And hey, once you are selling your time for more money,

20:40 you can use that extra money to work on building passive income.

20:44 But maybe you want to speed up this process by starting your own business.

20:47 Well, then understanding that you are always selling your time

20:50 for money is going to be even more important.

20:53 In my career as an investment banker, I've been lucky enough to talk with a lot

20:57 of successful company founders about what made their business work.

21:00 Starting a business is always going to take a lot of time and energy.

21:04 And as an early founder,

21:05 you will need to accept that you are going to basically be doing everything

21:08 from the sexy stuff like product design

21:10 and marketing to the boring stuff like accounting.

21:13 As a business grows,

21:14 a big mistake that a lot of business owners make is either trying

21:17 to continue to do everything themselves

21:19 or delegating away everything but the fun stuff.

21:22 A business can only get so large before it

21:24 can no longer be operated by a single person.

21:27 And letting go of something that you control can be hard.

21:30 The finance gurus are absolutely right when they say that you

21:32 need to leverage other people's time and experience to scale a business.

21:36 But this isn't the excuse to forgo the boring stuff either.

21:39 If a business owner has a background in design

21:41 and no experience at all in business management,

21:44 then they should hire a business manager to delegate the day-to-day operations

21:47 of the business to them because

21:49 their time is better spent designing new products.

21:51 Similarly, if a business owner has a decade of experience

21:54 as an operations executive and no experience whatsoever as a designer,

21:58 they should hire a designer and delegate that work to them,

22:01 even if they think they would have more fun thinking of cool new products.

22:05 Understanding that you are always selling your time for money will

22:08 really help you if you decide to go into business for yourself,

22:11 because it will always remind you to stick

22:12 to the tasks where you are worth the most

22:14 and delegate the tasks that you can't do

22:16 to a professional standard even if you really want to.

22:19 Despite the few stories of college dropouts starting billion-dollar companies,

22:23 the average age of a billion-dollar founder is 47 years old.

22:27 And that's because they spent decades in a career that gave them skills,

22:30 which meant they could leverage their time

22:31 to build a company worth a billion dollars.

22:35 So, if selling your time for money is not such a bad plan,

22:37 then why does every personal finance bro on the internet on it so much?

22:41 Even the infallible Warren Buffett has been quoted saying

22:44 that if you don't make money while you sleep, you will never be wealthy.

22:48 Oh, damn.

22:49 So, are all of these guys wrong?

22:51 Well, not really, but they aren't getting to the point

22:54 I think they're trying to get across very well,

22:56 and they are definitely reading their audience all wrong.

23:00 Let's start with Warren Buffett.

23:02 I struggled to find an instance of him actually saying this quote.

23:05 So, it's entirely possible that someone falsely credited him with this line

23:08 and everybody else on the internet just went with it.

23:11 But that doesn't matter.

23:12 He has definitely said some similar things at one of his many talks.

23:15 Anyway, he is totally correct.

23:17 Wealthy people should have passive investments

23:19 that make them money while they sleep.

23:21 But that doesn't mean that the best way

23:22 they become wealthy is by focusing on those investments.

23:25 It's a classic rich people eat caviar,

23:27 but eating caviar won't make you rich scenario.

23:29 When Buffett gives his speeches,

23:31 he's normally talking to rooms of Berkshire investors or people

23:34 that could afford to attend an event that Buffett was speaking at.

23:37 They are by and large already selling their time for lots of money.

23:40 So passive investing is the next step.

23:42 Nobody is reasonably choosing between a $4 million investment in Berkshire

23:46 and a course that can make them an extra $20 an hour.

23:49 Now, as for all the other financial influencers on the internet,

23:51 at least 50% of them are just saying

23:53 that earned income is trash and passive income

23:56 is the bomb because they want to sell

23:57 you a course on how to make passive income.

23:59 I don't think anybody should be surprised

24:01 by scams and dubious claims on the internet anymore.

24:04 But what about the other 50%.

24:06 The other 50% of people making personal finance

24:08 content really are trying to do their best.

24:11 But financial content given to a general audience can only be so good because,

24:15 well, it's general advice.

24:17 Invest into a portfolio that will make you passive income is not bad advice.

24:21 And yeah, eventually if you want to retire,

24:24 you will need most of your money to come

24:25 from a source that requires very little time input.

24:28 The problem is that broad statements like this perpetuate the idea that making

24:31 money one way is inherently good and making money another way is bad.

24:35 This good advice makes no considerations for someone's age, qualifications,

24:39 income, existing assets and liabilities, obligations, time horizon, and goals.

24:45 You shouldn't watch a Dr.

24:46 Mike video instead of getting a checkup.

24:48 So, you shouldn't watch a Graham Stefen video in lie

24:50 of making a personalized plan

24:52 for improving your own personal financial situations.

24:55 Unfortunately, not everybody can make money for doing nothing.

24:58 The world does need people to work.

25:00 No matter what you do, you are always going to be selling your time for money.

25:03 It's up to you to make sure that you do everything you can

25:06 to make the hours in your day a highly sought-after and marketable product.

25:10 But then, what about the very real trend of people giving up on work entirely?

25:15 It's a classic gripe of outofouch corporate

25:17 executives hiring minimum wage workers or the trust

25:19 fund baby who is angry that their gym is busy in the middle of the day.

25:23 Nobody wants to work anymore.

25:25 Now, I really hate to say this, but by looking at the numbers,

25:28 they might have a point.

25:30 Labor force participation is approaching

25:32 generational lows even after the pandemic,

25:34 while labor force participation amongst men specifically

25:36 is the lowest it has ever been.

25:38 These declines have been happening at the same

25:40 time that unemployment is theoretically quite low,

25:44 which if the economists are to be believed,

25:46 means it should be easy for people who want to get a job to get a job, right?

25:50 Well, not quite.

25:52 And these numbers are confusing at best or downright misleading at worst

25:56 is people just don't want to go to work.

25:58 There's a poll I read a long time ago.

26:00 Only like 18% of Americans feel engaged when they're at work.

26:03 I hate my job.

26:05 The signs are everywhere.

26:07 Businesses, especially restaurants, need employees and they need them.

26:11 Dude, less than 20% of the country likes theiring job.

26:15 Okay, so there are two general schools that people fall

26:17 into when they see that nobody wants to work anymore.

26:20 The first group are wealthy executives, business owners,

26:23 or just people who have always worked incredibly hard,

26:25 who don't like that jobs are going unfilled.

26:28 So, they blame it on lazy young people who would

26:30 rather sit around all day smoking cones and watching skibity toilets.

26:33 The second school of thought agrees that yes, people don't want to work.

26:37 They don't want to work demeaning jobs where they won't

26:39 get paid enough to support a decent quality of life.

26:42 It's nice when two groups who are so different can agree on something.

26:45 So, really, the only thing left is to work out why people don't want to work.

26:49 Now, in most cases, the jobs that nobody

26:51 wants to work fall into one of three categories.

26:54 The first are jobs that are just paying well

26:56 below market rates given the experience or the location required.

26:59 Businesses aren't going to be able to fill a full stack senior development role

27:02 in Silicon Valley for $50,000 a year

27:05 plus equity in their questionable preede startup.

27:08 But there are still plenty that try.

27:10 Even entry-level jobs that pay minimum wage

27:12 in very high cost of living areas are going to be much harder to fill in a city

27:16 where even finance bros are living in shared housing.

27:19 Now, hot take alert.

27:20 But just like there are no shortage of crappy businesses and managers

27:23 that expect to pay workers nothing for worldclass skills and experience,

27:27 there are lots of workers who expect

27:29 worldclass pay with little or no marketable expertise.

27:32 One of the most insightful pieces of data

27:34 on this issue is this recent survey right here.

27:37 It asked a selection of Americans what they considered to be

27:40 the minimum salary they would need to be financially successful.

27:43 Now, most of the responses to these numbers

27:45 have been laughing at the GenZ's just

27:47 entering the workforce who think that almost

27:49 $600,000 a year is a realistic salary goal.

27:52 Because for most people, it just isn't.

27:55 Unless you are in a few very specific career paths,

27:58 there are basically no jobs that pay this money.

28:00 And even then, you need an insane amount of luck to get those opportunities.

28:04 Now, you can blame this on young people

28:06 who don't really know how the world works yet,

28:08 or social media that makes it look like every hustle bro is flying private,

28:11 but it's all distracting from a more interesting data point.

28:14 The average boomer thinks financial success is

28:17 achieved with a salary of just under $100,000.

28:20 According to the Bureau of Labor Statistics,

28:23 this is still almost double the median national salary.

28:26 But in most major cities,

28:27 where people can actually find jobs that pay this much,

28:29 $100,000 certainly doesn't afford a lifestyle of financial success.

28:33 There is simply a massive gap in expectations between the generations looking

28:37 for their first jobs and the group responsible for giving out most of the jobs.

28:41 So they both agree that nobody wants to work just for different reasons.

28:45 The second type of job that nobody wants

28:47 to work are in workplaces that push their staff,

28:49 demand unreasonable overtime, or have management that are needlessly abusive.

28:53 This happens in a shocking amount of businesses across the country.

28:56 And even if you are lucky enough to avoid

28:58 a boss that thinks shouting is an effective motivation tool,

29:00 you have probably worked some overtime out

29:02 of fear of losing your job or being reprimanded.

29:05 According to a 2023 workplace survey,

29:07 the average full-time worker across the country studied is now

29:10 putting in an average of 9.2 hours of unpaid overtime.

29:14 These jobs often don't have much trouble finding people to start,

29:17 but they do struggle with high staff turnover.

29:20 The third are simply jobs that never actually existed.

29:23 You probably all know about ghost jobs by now,

29:26 but even if you really do want to work,

29:28 there is a good chance that most of your applications

29:30 are just going to build out a workforce database,

29:32 not to actually be considered for employment.

29:35 Now, whatever the specific reason, the results are the same.

29:38 Less people end up working.

29:39 But aside from settling some beef

29:41 between entitled zoomers and some outofouch boomers,

29:43 this data all reveals something more

29:45 concerning about work in the current economy.

29:47 It's not that people don't want to work anymore.

29:50 They simply can't afford to.

29:52 There are millions of people out there that think nobody

29:54 wants to work because they couldn't hire someone with 20

29:57 years of experience on a programming language that has

29:59 only been out for 5 years for $15 an hour.

30:02 There are also people who don't want to work because they think unless

30:05 they are offered six figures in their first role out of high school,

30:08 it's not worth their time and they would be better

30:10 off sitting at home working on their NFT drop shipping business.

30:14 Both of these groups definitely exist in shockingly large numbers.

30:17 But even though it's really fun to make fun of both sides,

30:20 it distracts from the much more important

30:22 reason why labor force participation is getting worse.

30:25 Well, as you might have been able to guess,

30:27 this trend is really being driven by specific age groups and specific locations.

30:32 If you look at labor force participation and exclude

30:34 the youngest generation of workers and the oldest generation of workers,

30:38 it's actually approaching all-time highs,

30:40 which really makes sense when you think about it.

30:42 It's common for both men and women to work full-time these days.

30:46 And for most households, it's simply a financial necessity.

30:49 So yeah, even if people don't want to work anymore,

30:52 they kind of are stuck doing it anyway.

30:54 The reason labor force participation has fallen off in general though is because

30:58 the average is being dragged down by a lot of young workers and old workers.

31:03 The old workers are the easiest to explain.

31:05 As people started living longer, retirement ages were pushed back and more

31:09 of the population began working in non-physical jobs.

31:12 As a result, a larger share of the population over 55 remained in the workforce.

31:17 This has started to reverse though

31:18 as self-funded retirement systems and general asset prices

31:22 have allowed a lot of over 55s to step back from the labor force,

31:25 especially after COVID as a lot

31:27 of people received severance packages and decided

31:29 that an early retirement was better than going back to the office.

31:32 Labor force participation from young people just entering the workforce either

31:36 out of high school or college is also pulling down the average,

31:39 just for different reasons.

31:41 More people than ever are getting a college degree,

31:43 which means they are starting to work later.

31:45 And fewer people are working part-time jobs while they study because for many,

31:48 it's simply not worth it given how much debt

31:51 they are going to be in when they graduate anyway.

31:53 This might not also be a shock to you,

31:56 but it's getting really damn hard to find a job out of college.

31:59 A few months ago, a post from a professor at Berkeley made the rounds after

32:03 it spoke about his top students from a top

32:05 college struggling to find work in technology,

32:07 an industry that was hiring highly intelligent graduates like this.

32:10 as fast as they could make them just 24 months ago.

32:14 Previously, a Berkeley CS graduate, even if not a top student,

32:17 would receive multiple appealing job offers in terms of work type,

32:21 location, salary, and employer.

32:23 However, outstanding students like those with a 4.0 in major

32:26 GPA are now contacting me worried because they have zero offers.

32:30 I suspect this trend is irreversible and likely part

32:33 of the broader trend impacting almost every employment sector.

32:36 It's pretty grim stuff coming out of one of the best schools in the country.

32:40 It might not be the most logical thing to do,

32:43 but a common reaction from people who can't land a job with a degree

32:46 they got to make them more employable is to just go get another degree.

32:50 The rate of masters and PhD recipients has grown even faster than people getting

32:54 an undergraduate degree because that's now normal

32:57 to stand out in a highly competitive job market.

32:59 And to be honest, it's a nice way for people

33:02 to avoid the reality of the job market for another few years.

33:06 Spending another 2 to 8 years at college to get

33:08 advanced degrees means people aren't in the labor force,

33:11 which pulls down the average to look worse than it really is.

33:14 So, those are the ages that are perpetuating this dumb myth.

33:18 But this trend is also highly dependent on location.

33:21 And to see that, you need to go to the place

33:23 where apparently the absolute least amount of people want to work.

33:29 West Virginia.

33:31 Yes, the rust belt state has

33:33 the lowest labor force participation in the country,

33:36 but also some of the most unusual statistical anomalies.

33:39 The state is quite poor after its major industries like coal mining

33:43 and manufacturing were either outsourced or simply fell out of widespread use.

33:47 This means that a lot of areas have

33:49 effectively been left behind with no major employment opportunities,

33:52 meaning that labor force participation is much lower than the national average.

33:56 But strangely, in some areas,

33:58 the participation rate is much higher than what would be expected.

34:01 A recent study conducted by economists from Hamlin University,

34:04 Cornell, and Virginia Tech found that depending on the county,

34:07 labor force participation in West Virginia ranges from 42% to 77%.

34:12 A gap between regions of 35% while the average across the US states is just 17%.

34:18 Less than half of West Virginia.

34:20 It's not unusual that cities and working

34:22 towns will have higher labor force participation

34:24 than other areas because people often specifically

34:27 move to these locations just to get work.

34:30 But this variance was startling and uncovered a bigger national trend.

34:34 The people in areas that still had work can't afford not to work.

34:38 And the people in areas with no work

34:40 couldn't afford to move to areas with work since

34:42 it could mean giving up family support networks

34:44 or simply paying for the cost to relocate housing.

34:48 A lot of people who had the financial means have already moved out of the state,

34:51 only making this problem worse [music] as they

34:53 take business opportunities and money away with them.

34:56 It's a dense read because it's an academic paper.

34:59 It's for nerds.

35:00 But if you ever feel compelled to say that nobody wants to work anymore,

35:04 I definitely suggest you have a look at it.

35:06 The report itself also looks at welfare issues specific to West Virginia.

35:10 But just because the state is experiencing this problem the worst

35:13 doesn't mean that it's in any way just something hurting them.

35:17 The trend of a few concentrated cities doing extremely well

35:21 while everywhere else stagnates can make nationwide figures look good.

35:24 But it also means people who want to work have

35:26 an option of trying their luck for one of the few

35:29 jobs left in areas with fewer opportunities or living

35:32 in an extremely expensive city to compete with everybody else,

35:35 fighting over a spot in the few places left where people can reliably get ahead.

35:39 Finance and tech have become one of the last escape ropes for people to make

35:42 a deal with the devil to get out of these areas with little to no opportunities.

35:47 Another thing some influencers have been promoting is starting a side

35:50 hustle and maybe even turning your hobby into a career.

35:53 But it's not all it's cracked up to be.

35:56 The promise of a side hustle is that you can

35:58 earn some extra money to treat yourself to a vacation,

36:01 save for a future goal, or simply to make your everyday finances less stressful.

36:06 Side hustles can take on many different forms,

36:08 ranging from flipping stuff on eBay to driving for Uber.

36:11 Some of these hustles have the promise of making some very decent money.

36:15 And alongside a boost to everyday finances, some people might maintain the dream

36:19 of making their side hustle their full-time job.

36:22 This dream can be particularly alluring for people that are

36:24 making a side hustle out of monetizing their hobbies.

36:27 Who wouldn't want to be paid for doing

36:28 something that they would have done for fun anyway?

36:31 It's a promising concept,

36:33 and it's no wonder that interest in side hustles has exploded in recent years.

36:38 But if we try to be honest with ourselves, nobody wants a side hustle.

36:42 Nobody gets home from a long day in the office and thinks to themselves,

36:45 "I can't wait to drive drunk people home from the bar

36:48 or deal with customer complaints on my eBay store." No,

36:52 people need side hustles.

36:54 And if they are lucky,

36:55 they have convinced themselves that they don't totally hate them.

36:58 You have probably heard platitudes like in order to be successful

37:02 you need multiple streams of income or nobody ever got wealthy

37:05 off a 9 to-5 and these ideas really support the idea

37:09 of getting out there and working on something more than your career.

37:12 Side hustles and hustle culture in general might look harmless.

37:16 After all, what's the problem with motivated individuals doing a little

37:20 bit of extra work to put some more money in their pockets?

37:23 Maybe side hustles can do some good.

37:25 And I promise I will look at some examples

37:27 that do genuinely make some sense in this video.

37:30 But as always, my main goal is to try to ruin a good thing and show you

37:34 that this push to normalize and incentivize side hustles

37:37 is something we probably shouldn't be too excited about.

37:40 So it's time to learn how money works,

37:42 which was made possible this week by Storyblocks,

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38:05 Story Blocks can take hours worth of work

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38:32 Now, a side hustle should ideally

38:34 be able to accommodate four important parameters.

38:37 It has to make money, otherwise it's just a hobby.

38:40 It has to be doable outside your regular working hours.

38:43 It has to be something you have the expertise and resources to accomplish.

38:47 And if it accomplishes this, then why not make it your full-time job.

38:50 Conveniently, these requirements give a wouldbe side hustler a checklist

38:54 of very important questions they should ask themselves before starting out.

38:58 But I am getting ahead of myself now.

39:00 Let's start with the first one.

39:02 Most side hustles are just very small businesses

39:05 and making money in business is surprisingly difficult.

39:08 There is a reason why most of them fail.

39:10 You can go for the easy options like driving for Uber and you will be guaranteed

39:14 a basic level of income so long as you pick up rides as they become available.

39:18 But there are obviously problems with this system.

39:21 You will be giving a fair chunk of your income

39:23 away to the company that facilitates this work.

39:26 And even if you do fully commit yourself to driving in your off hours,

39:29 the income you receive from doing this is likely going to be lower than most

39:33 regular jobs after factoring in additional insurance

39:36 and the extra miles you put on your car.

39:38 I have already made an entire video about

39:40 the shortfalls of starting a business with apps like Uber,

39:43 so I won't dwell on these for too long and instead

39:46 I want to look at side hustles that are more self-driven.

39:49 Flipping things in online marketplaces, consulting,

39:52 or doing chores like gardening are other popular options that give

39:55 you the opportunity to make money without an app-based middleman.

39:59 Let's go with something very simple like

40:01 mowing lawns for your neighbors on the weekend.

40:04 This can make money, so it passes the first test.

40:07 It's also done outside of regular working hours, so it passes the next test.

40:12 And you might think that you wouldn't need

40:13 much expertise and resources to set this gig up.

40:16 But you might be surprised.

40:18 Most lawns only need to be cut once every 2 weeks.

40:21 Which means if you want to make this a consistent hustle,

40:23 you are going to need more than just the lawn mower and a gallon of lemonade.

40:27 Before you start making any money, you are going to need to go doortodoor

40:31 asking people if they want their lawns mowed.

40:33 It sounds easy, but going door todo to sell

40:36 something is a terrifying experience for 99% of people.

40:40 And even people confident enough to do it would

40:42 be surprised how hard it would be to find

40:44 enough people to agree with your services to make

40:47 wasting your weekend worth it in the first place.

40:50 And yes, before you write about it in the comment section,

40:52 I did have a job for 3 weeks doing doortodoor sales in college.

40:56 Please don't hate me.

40:58 Anyway, let's say you are made of the right stuff to go out and drum a business

41:02 for your weekend lawnmowing gig and it goes so

41:04 well that you are fully booked out mowing lawns.

41:07 You have to ask yourself the question of why

41:09 you don't just make this your new full-time job.

41:12 If you make more money at your regular job,

41:14 then perhaps you would have been better served just doing some overtime.

41:17 If overtime isn't a thing in your office,

41:19 then perhaps finding a part-time weekend job

41:21 in the same field would work for you.

41:23 If you do make more money mowing lawns,

41:26 then maybe your answer to this question is that you just

41:28 don't want to mow lawns for more than one day a week.

41:31 That's fair.

41:32 But then why the hell are you doing this to yourself?

41:35 If you enjoy mowing lawns less than your day job,

41:37 then you have just signed yourself up for some well- paid torture.

41:41 But there is a solution to this, which is to focus

41:43 on where you added the most value in your hustle.

41:46 In this example, that would be in the doortodoor sales.

41:49 If you didn't hate that, then you would be

41:51 best focusing on and pursuing a career in sales where

41:54 you can just focus on where you're good at without

41:57 a need to push a lawnmower around all weekend.

42:00 Of course, this is just one example amongst

42:02 the plethora of different side hustles available to you.

42:05 So, don't take this as career advice

42:07 on building your lawn care empire, but instead,

42:10 let it demonstrate that most value comes from specializing

42:13 in one thing and then doing that thing extremely well.

42:16 An extremely good salesman who spends most

42:18 of their time pushing around a lawnmower is not

42:21 going to make as much money as an extremely

42:23 good salesman who focuses on closing deals.

42:26 A website developer will on average make more money building websites all day

42:30 than they would by building their own website to try and sell socks online.

42:35 This advice goes directly against what you might have

42:37 heard about most millionaires having seven different sources of income.

42:41 So, who's telling the truth here?

42:43 Well, this claim originally comes from a 2002 study published by the IRS,

42:48 which tracked 6,053 wealthy individuals who had died between 1996 and 2002.

42:54 The study looked at their tax returns and found

42:57 that these millionaires had seven distinct forms of income:

43:00 investment income, earned income, rental income,

43:03 royalty income, capital gains, profits, and interest income.

43:07 Immediately, you can start to see the problem here.

43:10 Most of these income types are simply the result of being

43:12 rich to begin with, not from going out and hashtag grinding.

43:16 The study also showed that most people built their wealth

43:19 by building one business or focusing on one highly compensated career,

43:23 which they could then use to buy up

43:25 assets that would provide these other income streams.

43:28 The claim that the average millionaire has an average of seven income streams is

43:32 also pushing the wording of this report to the level that it's an outright lie.

43:36 Only 29% of millionaires in this study reported five

43:39 or more streams of income with the majority having just three.

43:43 Still impressive, but it's not out of the ordinary

43:45 for a wealthy person to have a job,

43:47 get some dividends, and earn some money from interest in a savings account.

43:51 This rather disappointing reality is a far cry from what some

43:54 people might want you to think when they say this phrase.

43:57 But I'm sorry, nobody really gets rich by doing half a dozen jobs.

44:02 There is also one other problem with drawing any conclusions from this study,

44:06 which is becoming a common theme for this channel, and that is selection bias.

44:10 This study looked at people that died between 1996 and 2002.

44:15 Most people die when they're old.

44:17 Older people, especially rich older people,

44:19 have had more time to accumulate assets to diversify

44:22 their income away from their primary earned income.

44:25 Most of you watching are a long way from death, hopefully.

44:28 And 99% of people that achieve massive financial success at a young age do it

44:33 by maxing out one income stream or you

44:35 know getting a nice inheritance that works too.

44:39 So if the common belief about multiple income streams is not true,

44:42 why then do you see it repeated everywhere?

44:45 The cynic in me wants to say

44:46 that a lot of people spouting this nonsense have some

44:49 kind of hidden interest in selling you a course

44:51 or something on building out your next income stream.

44:54 And that's definitely part of it.

44:56 But honestly, I think that most people that perpetuate

44:58 these ideas are people who genuinely need to believe it's true.

45:02 Young workers have never known a world with the level of job security,

45:05 career progression, and opportunities available

45:08 to the generations that came before them.

45:10 Having a backup form of income in case you get fired

45:12 out of the blue one day no longer sounds like doomsday prepping.

45:16 It's just prudent advice.

45:18 I am also well aware of people that need multiple gigs to support

45:21 themselves and their families because they don't

45:23 receive enough income from their main job.

45:25 But to be fair, this should be called what it is,

45:28 which is working multiple jobs.

45:30 To call what someone is doing in these situations

45:32 a side hustle is just sugar coating a shitty situation.

45:36 So despite what I have said so far,

45:38 I don't want you to brush the whole idea of side hustles off.

45:41 I just want to make sure you are asking these questions so you can

45:45 avoid wasting your time working just to make some guru or tech company rich.

45:49 So what would a decent side hustle look like?

45:52 I have no doubt that some people have already

45:54 left comments pointing out how hypocritical it is of me

45:57 to point out the shortcomings of side hustle culture

45:59 on a YouTube channel that is literally my side hustle.

46:02 But I do practice what I preach and I

46:04 did ask these questions before I started making videos.

46:08 Does YouTube have the potential to make money?

46:10 Yes.

46:11 It's by no means a guarantee,

46:13 but if you work hard and are extremely lucky, it can be very rewarding.

46:17 [music] Is it doable outside my regular working hours?

46:20 Yes, I can make videos any time of day.

46:23 Do I have the expertise to make it work?

46:25 Yes, I work in banking,

46:27 so I have experience on the subject matter of my channel,

46:30 and I did some online courses in video editing.

46:32 As for the question, why not make it my full-time job?

46:36 Well, I want to, and it's hopefully something

46:38 I will be able to do full-time this year.

46:40 I didn't start this as a side hustle.

46:42 I started this as something I wanted to make my primary business.

46:46 Building a business on the side of your regular

46:48 job is a great way to try things out.

46:50 It lets you experience what running a business is like,

46:53 and it's much less risky than going allin and depending

46:56 on the success of a new business to put food on the table.

46:59 But what are some things that make sense to do

47:01 if your plans are to just keep your day job long-term?

47:05 There are actually a few.

47:07 Take an example like credit card churning.

47:09 This is where you will sign up for new credit cards,

47:11 spend money you normally would on living expenses to qualify for signup bonuses,

47:16 and then exchange those bonus points for cash.

47:18 Anybody with decent credit can do this.

47:20 It only takes a few minutes to fill out an application form,

47:23 and some bonuses can be worth thousands of dollars.

47:26 There are examples of people making this their full-time jobs.

47:30 In fact, I made a video about a man who did just that last week.

47:34 But unless you find a loophole in the system,

47:36 you are really limited by the amount of the signup promotions on offer and how

47:40 many credit cards the bank will let you have open at any given time.

47:43 Credit card churning is just one example

47:45 of a side hustle that actually does make sense.

47:48 And I'm not even saying it's the best one, but it works to show that if you

47:52 ask these questions before starting a new project,

47:54 you won't be sucked into doing something you hate because some schmuck

47:57 on the internet said you should be working 120 hours a week in your 20s.

48:01 In fact, it might even be better for all of us,

48:04 even for the economy at large, if we were working less.

48:08 Just 100 years ago, the 5-day work week was unthinkable for American laborers.

48:12 But in 1932, the states officially adopted the 5-day work week in an attempt

48:17 to combat the unemployment crisis caused by the stock

48:20 crash and subsequent Great Depression of 1929.

48:23 We are currently amid another shakeup of our own way of life,

48:26 one that is on par with the severity of the Great Depression.

48:29 So perhaps it's time again to reassess how we work.

48:33 Maybe it's time again to look at the surprisingly solid case

48:35 for cutting down the days that the average American worker devotes to labor.

48:39 There is a surprisingly solid case for a working

48:42 week of just 3 days for most jobs.

48:44 And let me be clear, the benefits are not that people get to spend more time

48:48 at home with their kids or have a better work life balance.

48:51 I don't know if you have realized,

48:53 but companies don't give a about your well-being

48:55 beyond how it immediately affects your ability to work.

48:58 Unfortunately, those same companies are going to be

49:01 the ones that decide our working arrangements.

49:03 So, for the sake of this video,

49:05 I'm going to leave all of the personal fulfillment rubbish to the side and just

49:08 focus on demonstrating why shorter work weeks

49:10 are good for business and the economy.

49:13 Before the 5-day work week was officially adopted as the industry standard,

49:16 Henry Ford gave it to his employees as a reward in 1926.

49:20 This came as a huge shock at a time when the standard was

49:23 a 6-day work week with the expectation of 12-hour days for most jobs.

49:28 Ford was still a ruthless businessman,

49:30 so he wasn't doing this out of the kindness of his heart.

49:33 His motivations were purely those of a pragmatic businessman.

49:36 The first benefit was that it would help with staff retention.

49:39 Building cars today is considered a bluecollar job, but back in the 1920s,

49:44 an auto worker needed experience far beyond that of the average American.

49:48 Auto workers were the tech employees of their day.

49:51 Offering 6 days pay for 5 days work was a huge reason for valuable

49:55 employees to stay with Ford rather than going to work for any other car company.

49:59 It also meant that Ford could hire experienced workers

50:02 from other companies without needing to offer a higher salary.

50:06 A line worker that has been building cars for years is going to be

50:08 able to produce more in 5 days than a rookie employee would produce in six.

50:13 The biggest benefit though was what these new working

50:15 arrangements could do to businesses beyond just his own.

50:19 Business is the exchange of goods.

50:21 Goods are bought only as they meet needs.

50:23 Needs are filled only as they are felt.

50:26 They make themselves felt largely in leisure hours.

50:28 The man who worked 15 and 16 hours a day

50:31 desired only a place to live and a hunk of food.

50:34 He had no time to cultivate new needs.

50:36 No industry could ever be built up by fulfilling

50:38 his needs because he had none but the most primitive.

50:42 The people with a 5-day work week will consume

50:44 more goods than the people with a 6- day week.

50:46 People who have more leisure must have more clothes.

50:50 They must have a greater variety of food.

50:52 They must have more transportation facilities.

50:54 They naturally must have more service of various kinds.

50:58 Ford knew that if he could prove that the 5-day work week was possible,

51:01 then other businesses would need to follow his lead

51:04 or risk losing their best employees to his company.

51:07 If other businesses did adopt the 5-day work week,

51:10 then people would have more time to buy things, things like Ford Motor Cars.

51:14 It's a win-win either way.

51:16 There are companies today that might be in the same kind of win-win position.

51:19 Tech companies being the most obvious.

51:22 The classic fang companies depend on armies of highly skilled

51:25 programmers to maintain their operations and push out new product offerings.

51:29 The demand for these employees is strong,

51:32 which is why developers at these companies make an easy six-f figureure income.

51:36 These companies were amongst the first to fully embrace

51:38 a work from home model at the outset of the pandemic.

51:41 And a big reason for this is that they could.

51:44 By its very nature, software development is done entirely on computers,

51:48 and these companies already had the infrastructure in place

51:50 to allow their employees to work from anywhere in the world.

51:53 It's obviously a lot harder for someone like a realer to work remotely.

51:58 But working from home for the same number of hours is

52:00 very different from working for just 3 days a week, right?

52:04 Well, yes, obviously, but it's still a step in the right direction.

52:08 Tech companies have seen that they can get away

52:10 with paying their employees less if they work remotely.

52:13 And this pay cut is often worthwhile for the employees too because

52:16 it allows them to work away from expensive tech hubs like New York,

52:20 Seattle, and San Francisco.

52:21 The demand for programmers outweighs the supply.

52:24 Throwing a remote work cherry on top has

52:26 become almost essential for attracting and maintaining talent.

52:30 A 3-day work week would achieve the same thing, but turned up to 11.

52:35 Let's look at the pros and cons list for a company like Netflix.

52:39 The biggest con is the lost manh hours.

52:41 If people are working 40 fewer days,

52:43 then the company should expect 40% less output.

52:46 That means projects will take almost twice as long

52:48 to complete and issues will take twice as long to solve.

52:51 Right?

52:52 Wrong.

52:53 To start with, the company could rightfully demand extra hours

52:56 to be worked on the 3 days that people are in.

52:58 I would gladly work 10 hours a day if it meant I only had to work 3 days a week.

53:03 And a community poll I ran last week has shown that most of you agree with me.

53:07 A 30-hour week is still a reduction in man-hour,

53:10 but there is a good chance that those hours will be more productive.

53:13 There are fixed and variable hours of productivity during a working day.

53:17 A typical 40-hour week spread out over 5 days

53:20 will have five daily team meetings, five lunch breaks, five morning coffee runs,

53:25 basically five of everything that takes

53:27 staff away from their primary responsibilities.

53:29 A 30-hour work week spread out over 3 days will still have these distractions,

53:34 but it will have less of them.

53:36 Companies would be looking at the difference

53:37 between 31 hours and 25 hours on task.

53:41 Those hours are also going to be more productive because people just

53:45 work better once they are in the groove of getting stuff done.

53:48 Let's just be honest with each other.

53:50 The first and last hours in the office are not times of peak performance.

53:54 A 3-day work week also cuts down on these lazy hours.

53:57 It gets even better for the workers themselves because there are

54:00 wasted hours in a working day that aren't born by the employer.

54:04 The average American commutes 30 minutes back and forth from their job.

54:08 When you add in the time to get ready for work and catch up once you get home,

54:11 it can easily add up to another 10 hours per week,

54:14 which would be cut down to six in a 3-day work week model.

54:17 The days that you do work would suck,

54:20 but they would probably suck less knowing that you could get

54:22 away with doing nothing but relaxing and sleeping when you got home,

54:26 and the chores can wait for one of your four days off.

54:29 Again, we really don't care about the individual experience here,

54:33 unless it directly benefits the company offering the 3-day work week.

54:37 So, the con of lost manh hours remains,

54:39 but it's not nearly as bad as you would expect.

54:42 The other big con would be lost opportunities due to downtime.

54:45 The Monday to Friday work week exists because almost all

54:48 professional jobs involve dealing with other companies on similar schedules.

54:52 A business-to- business company would lose two days worth of potential

54:56 deals if they gave their staff Thursday and Friday off.

54:59 A company that provides an ongoing service could

55:01 also find this exchange extremely hard to make.

55:04 If a CFO calls their bank to extend their line

55:07 of credit by another $20 million on a Thursday,

55:10 they are going to have taken their business elsewhere by Monday

55:12 morning when the 3-day banker gets back into the office.

55:16 There are ways to mitigate this.

55:18 have half of your staff work Monday to Wednesday

55:20 and the other half work Wednesday to Friday,

55:22 but that would admittedly work out to be more

55:25 expensive than just having everybody work 5 days per week.

55:28 There are some industries where these working

55:30 hours would actually be a benefit though.

55:32 Working from 9 to 7 means that staff would still be available

55:36 to talk to potential customers who have

55:38 just finished working a traditional 9 to5.

55:40 So, it is more viable for end customer focused companies.

55:44 It would also have no impact on tech companies since most of their workers

55:47 are focused on in-house projects which

55:49 require very little interaction with external stakeholders.

55:52 Of course, any issues that did exist would slowly be eliminated

55:56 as more and more companies got on board with the 3-day work week,

55:59 but this is still going in the cons column because businesses don't

56:03 care if they change the world if it pushes them into bankruptcy first.

56:07 So, what about the pros?

56:09 We have already seen how important remote

56:11 work has been for attracting valuable talent

56:13 to companies and a three-day work week would no doubt be an even bigger draw.

56:17 We were using Netflix as an example.

56:19 So, let's start with them.

56:21 If they rolled out the 3-day work week for their HQ staff,

56:24 they would be flooded with applications from people looking

56:26 to jump ship from other companies in the valley.

56:29 Netflix would be able to pick and choose the very best programmers,

56:32 producers, and managers without offering them higher salaries.

56:36 In the short term, other companies in similar

56:38 industries would almost be forced to follow suit.

56:41 Over the course of a few years,

56:43 even companies outside of the tech sphere would be pressured to do the same.

56:47 Top students would be incentivized to go into tech for its work life balance.

56:51 And fields like finance, law,

56:52 and medicine would either have to offer similar arrangements or offer

56:56 more money to ensure that they could still attract new graduates.

56:59 Some roles would really need to maintain the working hours.

57:02 In my experience, investment banks would probably

57:05 just offer higher salaries, and that's fine.

57:08 But your average company that wants to attract the average workers

57:11 will probably do what companies do best and take the cheaper option.

57:15 That leads us on to the next big advantage.

57:17 This arrangement will be cheaper.

57:20 There are huge costs involved in running an office every day.

57:23 Rent is the big one,

57:24 but the pandemic has shown that it might not be worth paying.

57:27 Companies have been on a spree of downsizing their office

57:30 spaces as most professional work gets done from home.

57:33 A 3-day work week could have the same effect on rents.

57:37 Companies would have offices that lay empty for a majority of the time,

57:40 which gives them some options.

57:42 They can rent out the office to another business,

57:45 but that would really depend on what a 3-day work week looks like.

57:48 If it's staggered, then this office sharing could work really well.

57:52 But if people decide that the new week is Tuesday to Thursday,

57:55 then obviously the demand won't be there from Friday to Monday.

57:58 But even if businesses can't cut down on rent directly,

58:01 there are other variable costs involved in running an office.

58:04 Cleaners would have to come in three nights a week instead of five,

58:08 electrical consumption will be cut,

58:10 and even wear and tear on things like elevators would almost be cut in half.

58:14 We don't really think about these costs,

58:15 but they can add up to tens of thousands

58:17 of dollars a month for even a small inner city office.

58:20 Assuming your company doesn't pay

58:22 for your work rellated electricity and internet,

58:24 working from home has already pushed a lot of these costs onto the workers.

58:28 A 3-day work week would reduce them even further.

58:31 So, a 3-day work week does mean losing some man-hour,

58:34 but the benefits are really starting to add up here,

58:37 but probably not enough for a big company to take the risk just yet.

58:41 Unless we think back to the lessons of Ford in the 1920s.

58:45 The greatest advantage to the businesses that could make

58:47 this change today is the growth of their services.

58:50 If you had 4 days off, you would probably end up watching a lot more Netflix,

58:54 playing a lot more video games,

58:56 and mindlessly scrolling through a lot more Facebook posts.

58:59 You can't lie to yourself and say that you

59:01 would use this extra time to exercise or start painting.

59:04 But even that would involve paying for a gym membership or an easel.

59:08 People with more time have more time to spend money,

59:11 more time to watch ads, more time to hand over all their precious data.

59:15 A 3-day work week would provide a massive upside to the very same companies

59:18 who are best suited for being the first to offer this to their employees.