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

by Eric Jorgenson

Books make for great friends, because the best thinkers of the last few thousand years tell you their nuggets of wisdom.

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

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

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

Basic arithmetic and numeracy are way more important in life than doing calculus. Similarly, being able to convey yourself simply using ordinary English words is far more important than being able to write poetry, having an extensive vocabulary, or speaking seven different foreign languages. Knowing how to be persuasive when speaking is far more important than being an expert digital marketer or click optimizer. Foundations are key. It’s much better to be at 9/10 or 10/10 on foundations than to try and get super deep into things.

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 very talented but is not keeping the compound interest in reputation going.

Intentions don’t matter. Actions do. That’s why being ethical is hard.

So, accountability is a double-edged thing. It allows you to take credit when things go well and to bear the brunt of the failure when things go badly.

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.

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.

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.

management. I would love to be paid purely for my judgment, not for any work. I want a robot, capital, or computer to do the work, but I want to be paid for my judgment.

Just from being marginally better, like running a quarter mile a fraction of a second faster, some people get paid a lot more—orders of magnitude more. Leverage magnifies those differences even more. Being at the extreme in your art is very important in the age of leverage.

Value your time at an hourly rate, and ruthlessly spend to save time at that rate. You will never be worth more than you think you’re worth.

What is the most important thing to do for younger people starting out? Spend more time making the big decisions. There are basically three really big decisions you make in your early life: where you live, who you’re with, and what you do.

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

I’m always “working.” It looks like work to others, but it feels like play to me. And that’s how I know no one can compete with me on it. Because I’m just playing, for sixteen hours a day. If others want to compete with me, they’re going to work, and they’re going to lose because they’re not going to do it for sixteen hours a day, seven days a week.

The winners of any game are the people who are so addicted they continue playing even as the marginal utility from winning declines.

Why do you say, “Get rich without getting lucky”? In 1,000 parallel universes, you want to be wealthy in 999 of them. You don’t want to be wealthy in the fifty of them where you got lucky, so we want to factor luck out of it.

I have great people in my life who are extremely successful, very desirable (like everybody wants to be their friend), very smart. Yet, I’ve seen them do one or two things slightly not great to other people. The first time, I’ll say, “Hey, I don’t think you should do this to that other person. Not because you won’t get away with it. You will get away with it, but because it will hurt you in the end.”

Not in some cosmic, karma kind of way, but I believe deep down we all know who we are. You cannot hide anything from yourself. Your own failures are written within your psyche, and they are obvious to you. If you have too many of these moral shortcomings, you will not respect yourself. The worst outcome in this world is not having self-esteem. If you don’t love yourself, who will?

One thing I figured out later in life is generally (at least in the tech business in Silicon Valley), great people have great outcomes. You just have to be patient. Every person I met at the beginning of my career twenty years ago, where I looked at them and said, “Wow, that guy or gal is super capable—so smart and dedicated”…all of them, almost without exception, became extremely successful. You just had to give them a long enough timescale. It never happens in the timescale you want, or they want, but it does happen.

It takes time—even once you have all of these pieces in place, there is an indeterminate amount of time you have to put in. If you’re counting, you’ll run out of patience before success actually arrives.

The most common bad advice I hear is: “You’re too young.” Most of history was built by young people. They just got credit when they were older. The only way to truly learn something is by doing it. Yes, listen to guidance. But don’t wait.

You don’t get rich by spending your time to save money. You get rich by saving your time to make money.

The hard thing is seeing the truth. To see the truth, you have to get your ego out of the way because your ego doesn’t want to face the truth. The smaller you can make your ego, the less conditioned you can make your reactions, the less desires you can have about the outcome you want, the easier it will be to see the reality.

It’s actually really important to have empty space. If you don’t have a day or two every week in your calendar where you’re not always in meetings, and you’re not always busy, then you’re not going to be able to think. You’re not going to be able to have good ideas for your business. You’re not going to be able to make good judgments. I also encourage taking at least one day a week (preferably two, because if you budget two, you’ll end up with one) where you just have time to think. It’s only after you’re bored you have the great ideas. It’s never going to be when you’re stressed, or busy, running around or rushed. Make the time. [7] Very smart people tend to be weird since they insist on thinking everything through for themselves.

A contrarian isn’t one who always objects—that’s a conformist of a different sort. A contrarian reasons independently from the ground up and resists pressure to conform. Cynicism is easy. Mimicry is easy. Optimistic contrarians are the rarest breed.

is” or “this is what it isn’t.” —Richard Feynman It’s really important for me to be honest. I don’t go out of my way volunteering negative or nasty things. I would combine radical honesty with an old rule Warren Buffett has, which is praise specifically, criticize generally. I try to follow this. I don’t always follow it, but I think I follow it enough to have made a difference in my life. If you have a criticism of someone, then don’t criticize the person—criticize the general approach or criticize the class of activities. If you have to praise somebody, then always try and find the person who is the best example of what you’re praising and praise the person, specifically. Then people’s egos and identities, which we all have, don’t work against you. They work for you. [4]

It’s almost always possible to be honest and positive.

The best mental models I have found came through evolution, game theory, and Charlie Munger. Charlie Munger is Warren Buffett’s partner. Very good investor. He has tons and tons of great mental models. Author and trader Nassim Taleb has great mental models. Benjamin Franklin had great mental models. I basically load my head full of mental models. [4]

ways for you to recall your own knowledge. [78] Evolution I think a lot of modern society can be explained through evolution. One theory is civilization exists to answer the question of who gets to mate. If you look around, from a purely sexual selection perspective, sperm is abundant and eggs are scarce. It’s an allocation problem. Literally all of the works of mankind and womankind can be traced down to people trying to solve this problem.

Evolution, thermodynamics, information theory, and complexity have explanatory and predictive power in many aspects of life.

Microeconomics and game theory are fundamental. I don’t think you can be successful in business or even navigate most of our modern capitalist society without an extremely good understanding of supply-and-demand, labor-versus-capital, game theory, and those kinds of things.

Sometimes, even the founders of these companies are surprised by how large the business scales.

I think basic mathematics is really underrated. If you’re going to make money, if you’re going to invest money, your basic math should be really good. You don’t need to learn geometry, trigonometry, calculus, or any of the complicated stuff if you’re just going into business. But you want arithmetic, probability, and statistics.

Least understood, but the most important principle for anyone claiming “science” on their side—falsifiability. If it doesn’t make falsifiable predictions, it’s not science. For you to believe something is true, it should have predictive power, and it must be falsifiable. [11] I think macroeconomics, because it doesn’t make falsifiable predictions (which is the hallmark of science), has become corrupted. You never have a counterexample when studying the economy. You can never take the US economy and run two different experiments at the same time.

If you can’t decide, the answer is no. If I’m faced with a difficult choice, such as: Should I marry this person? Should I take this job? Should I buy this house? Should I move to this city? Should I go into business with this person? If you cannot decide, the answer is no. And the reason is, modern society is full of options.

You’re biologically not built to realize how many choices there are. Historically, we’ve all evolved in tribes of 150 people. When someone comes along, they may be your only option for a partner.

What are the most efficient ways to build new mental models? Read a lot—just read.

Reading science, math, and philosophy one hour per day will likely put you at the upper echelon of human success within seven years.

The genuine love for reading itself, when cultivated, is a superpower. We live in the age of Alexandria, when every book and every piece of knowledge ever written down is a fingertip away.

Read what you love until you love to read.

These days, I find myself rereading as much (or more) as I do reading. A tweet from @illacertus said, “I don’t want to read everything. I just want to read the 100 great books over and over again.” I think there’s a lot to that idea. It’s really more about identifying the great books for you because different books speak to different people. Then, you can really absorb those.

Reading a book isn’t a race—the better the book, the more slowly it should be absorbed.

Real people, I think, read a minute a day or less. Making it an actual habit is the most important thing.

“As long as I have a book in my hand, I don’t feel like I’m wasting time.” —Charlie Munger

Pointing out obvious exceptions implies either the target isn’t smart or you aren’t.

The number of books completed is a vanity metric. As you know more, you leave more books unfinished. Focus on new concepts with predictive power.

two chapters of it. I got the gist. If they wrote it to make money, don’t read it. What practices do you follow to internalize/organize information from reading books? Explain what you learned to someone else. Teaching forces learning. It’s not about “educated” vs. “uneducated.” It’s about “likes to read” and “doesn’t like to read.” What can I do for the next sixty days to become a clearer, more independent thinker? Read the greats in math, science, and philosophy. Ignore your contemporaries and news. Avoid tribal identification. Put truth above social approval.