> For the complete documentation index, see [llms.txt](https://um.fz.ax/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://um.fz.ax/business/how-to-get-rich-naval.md). # how to get rich ### Seek Wealth, Not Money or Status * Wealth is assets that earn while you sleep * Wealth buys your freedom * Money is how we transfer wealth * Status is your rank in the social hierarchy * Status is a very old game * People creating wealth will always be attacked by people playing status games ### Make Abundance for the World * Ethical wealth creation makes abundance for the world * Everyone can be rich ### Free Markets Are Intrinsic to Humans * Free markets are intrinsic to the human species * Too many takers and not enough makers will plunge a society into ruin ### Making Money Isn’t About Luck * Making money isn’t about luck * 4 Kinds of Luck: * **1. Blind luck** * **2. Luck from hustling** * **3. Luck from preparation** * **4. Luck from your unique character** * In 1,000 parallel universes, you want to be wealthy in 999 of them * Wealth stacks up one chip at a time, not all at once ### Make Luck Your Destiny * Build your character so opportunity finds you * You have to be a little eccentric to be out on the frontier by yourself ### You Won’t Get Rich Renting Out Your Time * You won’t get rich renting out your time * Renting out your time means you’re essentially replaceable * You must own equity to gain your financial freedom ### Live Below Your Means for Freedom * People living below their means have freedom * The most dangerous things are heroin and a monthly salary * Ideally, you’ll make your money in discrete lumps ### Give Society What It Doesn’t Know How to Get * Give society what it wants, but doesn’t know how to get—at scale * Figure out what product you can provide and then figure out how to scale it ### The Internet Has Massively Broadened Career Possibilities * The Internet has massively broadened the possible space of careers * The Internet allows you to scale any niche obsession * Escape competition through authenticity ### Play Long-term Games With Long-term People * Play long-term games with long-term people * When you switch industries, you’re starting over from scratch * Long-term players make each other rich * Returns come from compound interest in iterated games ### Pick Partners With Intelligence, Energy and Integrity * Pick business partners with high intelligence, energy and integrity * Motivation has to come intrinsically * Integrity is what someone does, despite what they say they do ### Partner With Rational Optimists * Don’t partner with pessimists * Partner with rational optimists * We’re descended from pessimists * BOCTAOE ### Arm Yourself With Specific Knowledge * Arm yourself with specific knowledge * Specific knowledge can’t be trained * Specific knowledge is found by pursuing your curiosity * Building specific knowledge will feel like play to you ### Specific Knowledge Is Highly Creative or Technical * Specific knowledge can be taught through apprenticeships * Specific knowledge is often highly creative or technical * Specific knowledge is specific to the individual and situation * You can’t be too deliberate about assembling specific knowledge * Build specific knowledge where you are a natural ### Learn to Sell, Learn to Build * Learn to sell, learn to build * The Silicon Valley model is a builder and seller * If you can do both you will be unstoppable * I’d rather teach an engineer marketing than a marketer engineering **Read What You Love Until You Love to Read** * Read what you love until you love to read * Read the original scientific books in a field * Don’t fear any book * The means of learning are abundant, the desire to learn is scarce ### The Foundations Are Math and Logic * The ultimate foundations are math and logic * It’s better to read a great book really slowly than to fly through a hundred books quickly * Learn persuasion and programming ### There’s No Actual Skill Called “Business” * There’s no actual skill called “business” * Doing is faster than watching * The number of “doing” iterations drives the learning curve * If you’re willing to bleed a little every day, you may win big later ### Embrace Accountability to Get Leverage * You have to have accountability to get leverage * Take business risks under your own name * A well-functioning team has clear accountability for each position * People who can fail in public have a lot of power ### Take Accountability to Earn Equity * Accountability is how you’re going to get equity * Taking accountability is like taking equity in all your work * Accountability is reputational skin in the game ### Labor and Capital Are Old Leverage * Our brains aren’t evolved to comprehend new forms of leverage * Society overvalues labor leverage * You want the minimum amount of labor that allows you to use the other forms of leverage * Capital has been the dominant form of leverage in the last century * You need specific knowledge and accountability to obtain capital ### Product and Media are New Leverage * Product and media are the new leverage * Product leverage is where the new fortunes are made * Combining all three forms of leverage is a magic combination * Product and media leverage are permissionless * The robot army is already here—code lets you tell them what to do ### Product Leverage is Egalitarian * Product leverage is a positive sum game * Status goods are limited to a few people * The best products tend to be targeted at the middle class * Creating wealth with product leads to more ethical wealth * You want to use the product that is used by the most people * Capital and labor are becoming permissionless ### Pick a Business Model With Leverage * Scale economies: the more you produce, the cheaper it gets * Zero marginal cost of reproduction: producing more is free * Network effect businesses are natural monopolies * In a network effect, each new user adds value to the existing users * Zero marginal cost businesses can pivot into network effect businesses ### Example: From Laborer to Entrepreneur * Laborers get paid hourly and have low accountability * General contractors get equity, but they’re also taking risk * Property developers pocket the profit by applying capital leverage * Architects, large developers and REITs are even higher in the stack * Real estate tech companies apply the maximum leverage ### Judgment Is the Decisive Skill * In an age of infinite leverage, judgment becomes the most important skill * Everything else you do is setting you up to apply judgment * Judgment is knowing the long-term consequences of your actions * Without experience, judgment is often less than useless * The people with the best judgment are among the least emotional * A lot of the top investors often sound like philosophers * The more outraged someone is, the worse their judgment ### Set an Aspirational Hourly Rate * Set and enforce an aspirational hourly rate * You can’t penny pinch your way to wealth * My aspirational rate was $5,000/hr * If you can outsource something for less than your hourly rate, do it * Your hourly rate should seem absurdly high ### Work As Hard As You Can * Work as hard as you can * What you work on and who you work with are more important * Nobody really works 80 hours a week * Inspiration is perishable * Impatience with actions, patience with results ### Be Too Busy to “Do Coffee” * Be too busy to “do coffee” while keeping an uncluttered calendar * People will meet with you when you have proof of work * Networking is overrated even early in your career ### Keep Redefining What You Do * Keep redefining what you do until you’re the best at what you do * Find founder-product-market fit ### Escape Competition Through Authenticity * Competition will trap you in a lesser game * No one can compete with you on being you * In entrepreneurship, the masses are never right * Combine your vocation and avocation ### Play Stupid Games, Win Stupid Prizes * Businesses that seem like they’re in direct competition really aren’t * My first company got caught up in the wrong game ### Eventually You Will Get What You Deserve * On a long enough time scale you will get paid * What are you really good at that the market values? ### Reject Most Advice * The best founders listen to everyone but make up their own mind * Advice is maxims you can recall later, when you get your own experience ### A Calm Mind, a Fit Body, a House Full of Love * When you’re wealthy, you’ll realize it wasn’t what you were seeking * A calm mind, a fit body and a house full of love must be earned * Practical advice for a calmer internal state * A lot of divorces happen over money, a lot of battles happen over internal anger ### There Are No Get Rich Quick Schemes * There are no get rich quick schemes * We don’t have ads because it would ruin our credibility * Anyone giving advice on how to get rich should have made their money elsewhere ### Productize Yourself * Figure out what you’re uniquely good at and apply as much leverage as possible * Find hobbies that make you rich, fit and creative link: