The Almanack of Naval Ravikant: A Guide to Wealth and Happiness

by Eric Jorgenson

I take Naval seriously because he: Questions nearly everything Can think from first principles Tests things well Is good at not fooling himself Changes his mind regularly Laughs a lot Thinks holistically Thinks long-term And…doesn’t take himself too goddamn seriously.

It’s not really about hard work. You can work in a restaurant eighty hours a week, and you’re not going to get rich. Getting rich is about knowing what to do, who to do it with, and when to do it.

Understand ethical wealth creation is possible. If you secretly despise wealth, it will elude you.

You’re not going to get rich renting out your time. You must own equity—a piece of a business—to gain your financial freedom.

Pick an industry where you can play long-term games with long-term people.

Play iterated games. All the returns in life, whether in wealth, relationships, or knowledge, come from compound interest.

Learn to sell. Learn to build. If you can do both, you will be unstoppable.

Arm yourself with specific knowledge, accountability, and leverage.

Specific knowledge is found by pursuing your genuine curiosity and passion rather than whatever is hot right now.

If you can’t code, write books and blogs, record videos and podcasts.

There is no skill called “business.” Avoid business magazines and business classes.

Study microeconomics, game theory, psychology, persuasion, ethics, mathematics, and computers.

Set and enforce an aspirational personal hourly rate. If fixing a problem will save less than your hourly rate, ignore it. If outsourcing a task will cost less than your hourly rate, outsource it.

Become the best in the world at what you do. Keep redefining what you do until this is true.

Apply specific knowledge, with leverage, and eventually you will get what you deserve.

Your summary says “Productize yourself”—what does that mean? “Productize” and “yourself.” “Yourself” has uniqueness. “Productize” has leverage. “Yourself” has accountability. “Productize” has specific knowledge. “Yourself” also has specific knowledge in there. So all of these pieces, you can combine them into these two words.

Society always wants new things. And if you want to be wealthy, you want to figure out which one of those things you can provide for society that it does not yet know how to get but it will want and providing it is natural to you, within your skill set, and within your capabilities.

Then, you have to figure out how to scale it because if you only build one, that’s not enough.

Specific knowledge cannot be taught, but it can be learned.

When I talk about specific knowledge, I mean figure out what you were doing as a kid or teenager almost effortlessly.

Examples of what your specific knowledge could be: Sales skills Musical talents, with the ability to pick up any instrument An obsessive personality: you dive into things and remember them quickly Love for science fiction: you were into reading sci-fi, which means you absorb a lot of knowledge very quickly Playing a lot of games, you understand game theory pretty well Gossiping, digging into your friend network. That might make you into a very interesting journalist.

“Escape competition through authenticity.” Basically, when you’re competing with people, it’s because you’re copying them. It’s because you’re trying to do the same thing. But every human is different. Don’t copy. [78]

If you are fundamentally building and marketing something that is an extension of who you are, no one can compete with you on that. Who’s going to compete with Joe Rogan or Scott Adams? It’s impossible. Is somebody else going to come along and write a better Dilbert? No. Is someone going to compete with Bill Watterson and create a better Calvin and Hobbes? No. They’re being authentic. [78]

The most important skill for getting rich is becoming a perpetual learner.

If you go to the library and there’s a book you cannot understand, you have to dig down and say, “What is the foundation required for me to learn this?” Foundations are super important. [74]

You do need to be deep in something because otherwise you’ll be a mile wide and an inch deep and you won’t get what you want out of life. You can only achieve mastery in one or two things. It’s usually things you’re obsessed about. [74]

“All the returns in life, whether in wealth, relationships, or knowledge, come from compound interest.”

Compounding in business relationships is very important. Look at some of the top roles in society, like why someone is a CEO of a public company or managing billions of dollars. It’s because people trust them.

Compound interest also happens in your reputation. If you have a sterling reputation and you keep building it for decades upon decades, people will notice.

Obviously, nothing is ever completely wasted because it’s all a learning moment. You can learn from anything. But for example, when you go back to school, 99 percent of the term papers you did, books you read, exercises you did, things you learned, they don’t really apply. You might have read geography and history you never reuse. You might have studied a language you don’t speak anymore. You might have studied a branch of mathematics you completely forgot.

What I’m saying is: when you find the 1 percent of your discipline which will not be wasted, which you’ll be able to invest in for the rest of your life and has meaning to you—go all-in and forget about the rest. [10]

Following your genuine intellectual curiosity is a better foundation for a career than following whatever is making money right now. [11]

I only really want to do things for their own sake. That is one definition of art. Whether it’s business, exercise, romance, friendship, whatever, I think the meaning of life is to do things for their own sake.

One form of leverage is labor—other humans working for you. It is the oldest form of leverage, and actually not a great one in the modern world. [1] I would argue this is the worst form of leverage that you could possibly use. Managing other people is incredibly messy. It requires tremendous leadership skills.

Money is good as a form of leverage. It means every time you make a decision, you multiply it with money. [1] Capital is a trickier form of leverage to use. It’s more modern. It’s the one that people have used to get fabulously wealthy in the last century. It’s probably been the dominant form of leverage in the last century.

The final form of leverage is brand new—the most democratic form. It is: “products with no marginal cost of replication.” This includes books, media, movies, and code.

Whenever you can in life, optimize for independence rather than pay. If you have independence and you’re accountable on your output, as opposed to your input—that’s the dream. [10]

Forty hour work weeks are a relic of the Industrial Age. Knowledge workers function like athletes—train and sprint, then rest and reassess.

Learn to sell, learn to build. If you can do both, you will be unstoppable.

You start as a salaried employee. But you want to work your way up to try and get higher leverage, more accountability, and specific knowledge. The combination of those over a long period of time with the magic of compound interest will make you wealthy. [74]

We waste our time with short-term thinking and busywork. Warren Buffett spends a year deciding and a day acting. That act lasts decades.

Literally, being anti-wealth will prevent you from becoming wealthy, because you will not have the right mindset for it, you won’t have the right spirit, and you won’t be dealing with people on the right level. Be optimistic, be positive. It’s important. Optimists actually do better in the long run. [10]

There are fundamentally two huge games in life that people play. One is the money game. Because money is not going to solve all of your problems, but it’s going to solve all of your money problems. People realize that, so they want to make money. But at the same time, many of them, deep down, believe they can’t make money. They don’t want any wealth creation to happen. So, they attack the whole enterprise by saying, “Well, making money is evil. You shouldn’t do it.” But they’re actually playing the other game, which is the status game. They’re trying to be high status in the eyes of other people watching by saying, “Well, I don’t need money. We don’t want money.” Status is your ranking in the social hierarchy. [78]

Humans evolved as hunters and gatherers where we all worked for ourselves. It’s only at the beginning of agriculture we became more hierarchical. The Industrial Revolution and factories made us extremely hierarchical because one individual couldn’t necessarily own or build a factory, but now, thanks to the internet, we’re going back to an age where more and more people can work for themselves.

There are almost 7 billion people on this planet. Someday, I hope, there will be almost 7 billion companies.

Retirement is when you stop sacrificing today for an imaginary tomorrow. When today is complete, in and of itself, you’re retired.

Well, one way is to have so much money saved that your passive income (without you lifting a finger) covers your burn rate. A second is you just drive your burn rate down to zero—you become a monk. A third is you’re doing something you love. You enjoy it so much, it’s not about the money. So there are multiple ways to retirement.

I can create a new business within three months: raise the money, assemble a team, and launch it. It’s fun for me. It’s really cool to see what can I put together. It makes money almost as a side effect. Creating businesses is the game I became good at. It’s just my motivation has shifted from being goal-oriented to being artistic. Ironically, I think I’m much better at it now. [74]

I think the best way to stay away from this constant love of money is to not upgrade your lifestyle as you make money. It’s very easy to keep upgrading your lifestyle as you make money. But if you can hold your lifestyle fixed and hopefully make your money in giant lump sums as opposed to a trickle at a time, you won’t have time to upgrade your lifestyle. You may get so far ahead you actually become financially free. Another thing that helps: I value freedom above everything else. All kinds of freedom: freedom to do what I want, freedom from things I don’t want to do, freedom from my own emotions or things that may disturb my peace. For me, freedom is my number one value.

To the extent money buys freedom, it’s great. But to the extent it makes me less free, which it definitely does at some level as well, I don’t like it. [74]