5-Hour Rule: If You’re Not Spending 5 Hours Per Week Learning, You’re Being Irresponsible
Author’s Note: This article was written over 60 hours with love and care using the blockbuster mental model.
In my whole life, I have known no wise people (over a broad subject matter area) who didn’t read all the time — none. Zero.
—Charlie Munger, Self-made billionaire & Warren Buffett’s longtime business partner
Why did the busiest person in the world, former president Barack Obama, read an hour a day while in office?
Why has the best investor in history, Warren Buffett, invested 80% of his time in reading and thinking throughout his career?
Why has the world’s richest person, Bill Gates, read a book a week during his career? And why has he taken a yearly two-week reading vacation throughout his entire career?
Why do the world’s smartest and busiest people find one hour a day for deliberate learning (the 5-Hour Rule), while others make excuses about how busy they are?
What do they see that others don’t?
The answer is simple: Learning is the single best investment of our time that we can make. Or as Benjamin Franklin said, “An investment in knowledge pays the best interest.”
This insight is fundamental to succeeding in our knowledge economy, yet few people realize it. Luckily, once you do understand the value of knowledge, it’s simple to get more of it. Just dedicate yourself to constant learning.
Knowledge is the new money
Intellectual capital will always trump financial capital.
—Paul Tudor Jones, self-made billionaire entrepreneur, investor, and philanthropist
We spend our lives collecting, spending, lusting after, and worrying about money—in fact, when we say we “don’t have time” to learn something new, it’s usually because we are feverishly devoting our time to earning money, but several things are happening right now that are changing the relationship between money and knowledge.
#1. While goods are becoming demonetized, knowledge is becoming increasingly valuable
The central event of the twentieth century is the overthrow of matter. In technology, economics, and the politics of nations, wealth in the form of physical resources is steadily declining in value and significance. The powers of mind are everywhere ascendant over the brute force of things.
—George Gilder (technology thinker)
We are at the beginning of a period of what renowned futurist Peter Diamandis calls rapid demonetization, in which technology is rendering previously expensive products or services much cheaper, or even free.
This chart from Diamandis’ book Abundance shows how we’ve demonetized $900,000 worth of products and services you might have purchased between 1969 and 1989.
This demonetization will accelerate in the future. Automated vehicle fleets will eliminate one of our biggest purchases: a car. Virtual reality will make expensive experiences, such as going to a concert or playing golf, instantly available at a much lower cost. While the difference between reality and virtual reality is almost incomparable at the moment, the rate of improvement of VR is exponential.
While education and healthcare costs have risen, innovation in these fields will likely lead to eventual demonetization as well. Many higher educational institutions, for example, have legacy costs to support multiple layers of hierarchy and to upkeep their campuses. Newer institutions are finding ways to dramatically lower costs by offering their services exclusively online, focusing only on training for in-demand, high-paying skills, or having employers who recruit students subsidize the cost of tuition.
Finally, new devices and technologies, such as CRISPR, the XPrize Tricorder, better diagnostics via artificial intelligence, and reduced cost of genomic sequencing will revolutionize the healthcare system. These technologies and other ones like them will dramatically lower the average cost of healthcare by focusing on prevention rather than cure and management.
While goods are becoming demonetized, knowledge is becoming increasingly valuable.
Perhaps the best example of the rising value of certain forms of knowledge is the self-driving car industry. Sebastian Thrun, founder of Google X and Google’s self-driving car team, gives the example of Uber paying $700 million for Otto, a six-month-old company with 70 employees, and of GM spending $1 billion on their acquisition of Cruise. He concludes that in this industry, “The going rate for talent these days is $10 million.”
That’s $10 million per skilled worker, and while that’s the most stunning example, it’s not just true for incredibly rare and lucrative technical skills. People who identify skills needed for future jobs—e.g., data analyst, product designer, physical therapist—and quickly learn them are poised to win.
Those who work really hard throughout their career but don’t take time out of their schedule to constantly learn will be the new “at-risk” group. They risk remaining stuck on the bottom rung of global competition, and they risk losing their jobs to automation, just as blue-collar workers did between 2000 and 2010 when robots replaced 85 percent of manufacturing jobs.
Why?
People at the bottom of the economic ladder are being squeezed more and compensated less, while those at the top have more opportunities and are paid more than ever before. The irony is that the problem isn’t a lack of jobs. Rather, it’s a lack of people with the right skills and knowledge to fill the jobs.
An Atlantic article captures the paradox:
Employers across industries and regions have complained for years about a lack of skilled workers, and their complaints are borne out in U.S. employment data. In July [2015], the number of job postings reached its highest level ever, at 5.8 million, and the unemployment rate was comfortably below the post-World War II average. But, at the same time, over 17 million Americans are either unemployed, not working but interested in finding work, or doing part-time work but aspiring to full-time work.
In short, we can see how at a fundamental level knowledge is gradually becoming its own important and unique form of currency. In other words, knowledge is the new money.
#2. Knowledge often serves as a medium of exchange and store of value
But, unlike money, when you use knowledge or give it away, you don’t lose it. In fact, it’s the opposite. The more you give away knowledge, the more you:
Remember it
Understand it
Connect it to other ideas in your head
Build your identity as a role model for that knowledge
This is known as the Explanation Effect.
Furthermore, knowledge has several other fascinating properties…
Transferring knowledge anywhere in the world is free and instant.
It can be converted into many things, including things that money can’t buy, such as authentic relationships and high levels of subjective well-being.
It helps you accomplish your goals faster and better.
It’s fun to acquire.
It makes your brain work better.
It expands your vocabulary, making you a better communicator.
It helps you think bigger and beyond your circumstances.
It connects you to communities of people you didn’t even know existed.
It puts your life in perspective by essentially helping you live many lives in one life through other people’s experiences and wisdom.
#3. Knowledge investors will be the new wealthy
Fundamentally, there are three ways to make money:
Time
Knowledge
Money
Employees, entrepreneurs, and investors combine time, knowledge, and money in different ways:
Employees combine time and knowledge into a salary.
Investors combine knowledge and money into assets that have compounding gains.
Entrepreneurs combine time, knowledge, and money into both salary and ownership.
As we move into the Web 3.0 world, which is built on top of the blockchain, a new class of investors is emerging. Here’s why: