how to get rich
by naval
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
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