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

by Eric Jorgenson

“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]

The most important skill for getting rich is becoming a perpetual learner. You have to know how to learn anything you want to learn.

It’s much more important today to be able to become an expert in a brand-new field in nine to twelve months than to have studied the “right” thing a long time ago.

You can only achieve mastery in one or two things. It’s usually things you’re obsessed about. [74]

Compound interest is a very powerful concept. Compound interest applies to more than just compounding capital.

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. They are trusted because the relationships they’ve built and the work they’ve done has compounded. They’ve stuck with the business and shown themselves (in a visible and accountable way) to be high-integrity people.

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. Your reputation will literally end up being thousands or tens of thousands of times more valuable than somebody else who was ...

I love working with Elad because I know when the deal is being done, he will bend over backward to give me extra. He will always round off in my favor if there’s an extra dollar being delivered here or there. If there’s some cost to pay, he will pay it out of his own pocket, and he won’t even mention it to me. Because he goes so far out of his way to treat me so well, I send him every deal I have—I try to include him in everything. Then, I go out of my way to try and pay for him. Compounding in those relationships is very valuable. [10]

When you find the right thing to do, when you find the right people to work with, invest deeply. Sticking with it for decades is really how you make the big returns in your relationships and in your money. So, compound interest is very important. [10]

99% of effort is wasted.

The reason I say this is not to make some glib comment about how 99 percent of your life is wasted and only 1 percent is useful. I say this because you should be very thoughtful and realize in most things (relationships, work, even in learning) what you’re trying to do is find the thing you can go all-in on to earn compound interest.

I’m not saying don’t do the 99 percent, because it’s very hard to identify what the 1 percent is. 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]

Embrace accountability and take business risks under your own name. Society will reward you with responsibility, equity, and leverage.

Clear accountability is important. Without accountability, you don’t have incentives. Without accountability, you can’t build credibility. But you take risks. You risk failure. You risk humiliation. You risk failure under your own name.

I took a risk. Same with crypto. Early on, I took a risk. But when you put your name out there, you take a risk with certain things. You also get to reap the rewards. You get the benefits. [78]

Realize that in modern society, the downside risk is not that large. Even personal bankruptcy can wipe the debts clean in good ecosystems. I’m most familiar with Silicon Valley, but generally, people will forgive failures as long as you were honest and made a high-integrity effort.

There’s not really that much to fear in terms of failure, and so people should take on a lot more accountability than they do. [78]

If you don’t own a piece of a business, you don’t have a path towards financial freedom.

If you are paid for renting out your time, even lawyers and doctors, you can make some money, but you’re not going to make the money that gives you financial freedom. You’re not going to have passive income where a business is earning for you while you are on vacation. [10]

Without ownership, your inputs are very closely tied to your outputs. In almost any salaried job, even one paying a lot per hour like a lawyer or a doctor, you’re still putting in the hours, and every hour you get paid.

Without ownership, when you’re sleeping, you’re not earning. When you’re retired, you’re not earning. When you’re on vacation, you’re not earning. And you can’t earn nonlinearly.

Owning equity in a company basically means you own the upside.

You have to work up to the point where you can own equity in a business. You could own equity as a small shareholder where you bought stock. You could also own it as an owner where you started the company. Ownership is really important. [10]

But usually, the real wealth is created by starting your own companies or even by investing. In an investment firm, they’re buying equity. These are the routes to wealth. It doesn’t come through the hours. [78]

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

Knowledge only you know or only a small set of people knows is going to come out of your passions and your hobbies, oddly enough.

If it entertains you now but will bore you someday, it’s a distraction. Keep looking.

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. Ironically, when you do things for their own sake, you create your best work.

The year I generated the most wealth for myself was actually the year I worked the least hard and cared the least about the future. I was mostly doing things for the sheer fun of it. I was basically telling people, “I’m retired, I’m not working.” Then, I had the time for whatever was my highest valued project in front of me. By doing things for their own sake, I did them at their best. [74]

If they can train you to do it, then eventually they will train a computer to do it.

You get rewarded by society for giving it what it wants and doesn’t know how to get elsewhere.

Think about what product or service society wants but does not yet know how to get. You want to become the person who delivers it and delivers it at scale. That is really the challenge of how to make money.

You are waiting for your moment when something emerges in the world, they need a skill set, and you’re uniquely qualified. You build your brand in the meantime on Twitter, on YouTube, and by giving away free work. You make a name for yourself, and you take some risk in the process. When it is time to move on the opportunity, you can do so with leverage—the maximum leverage possible. [1]

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]

Money is good as a form of leverage. It means every time you make a decision, you multiply it with money. [1]

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. Code is probably the most powerful form of permissionless leverage. All you need is a computer—you don’t need anyone’s permission. [1]

For the last generation, fortunes were made by capital. The people who made fortunes were the Warren Buffetts of the world. But the new generation’s fortunes are all made through code or media.

Probably the most interesting thing to keep in mind about new forms of leverage is they are permissionless. They don’t require somebody else’s permission for you to use them or succeed. For labor leverage, somebody has to decide to follow you. For capital leverage, somebody has to give you money to invest or to turn into a product.

Coding, writing books, recording podcasts, tweeting, YouTubing—these kinds of things are permissionless. You don’t need anyone’s permission to do them, and that’s why they are very egalitarian. They’re great equalizers of leverage. [78]

You’re never going to get rich renting out your time.

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]

Forget 10x programmers. 1,000x programmers really exist, we just don’t fully acknowledge it. See @ID_AA_Carmack, @notch, Satoshi Nakamoto, etc.

What you want in life is to be in control of your time. You want to get into a leveraged job where you control your own time and you’re tracked on the outputs. If you do something incredible to move the needle on the business, they have to pay you. Especially if they don’t know how you did it because it’s innate to your obsession or your skill or your innate abilities, they’re going to have to keep paying you to do it.

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

Tools and leverage create this disconnection between inputs and outputs. The higher the creativity component of a profession, the more likely it is to have disconnected inputs and outputs. If you’re looking at professions where your inputs and your outputs are highly connected, it’s going to be very hard to create wealth and make wealth for yourself in that process. [78]

If you want to be part of a great tech company, then you need to be able to SELL or BUILD. If you don’t do either, learn.

Learn to sell, learn to build. If you can do both, you wi...

Earn with your mind, not your time.

You may pull a team together to do it where each have different skill sets, but that combined entity would have specific knowledge in technology and in real estate. It would have massive accountability because that company’s name would be a very high-risk, high-reward effort attached to the whole thing, and people would devote their lives to it and take on significant risk. It would have leverage in code with lots of developers. It would have capital with investors putting money in and the founder’s own capital. It would have some of the highest-quality labor you can find, which is high-quality engineers, designers, and marketers who are working on the company. Then, you may end up with a Trulia, Redfin, or Zillow company, and then the upside could potentially be in the billions of dollars, or the hundreds of millions of dollars. [78]

I think every human should aspire to being knowledgeable about certain things and being paid for our unique knowledge. We have as much leverage as is possible in our business, whether it’s through robots or computers or what have you. Then, we can be masters of our own time because we are just being tracked on outputs and not inputs.