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

link: https://nav.al/how-to-get-rich