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

by Eric Jorgenson

Getting rich is about knowing what to do, who to do it with, and when to do it.

Seek wealth, not money or status. Wealth is having assets that earn while you sleep. Money is how we transfer time and wealth. Status is your place in the social hierarchy.

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

Ignore people playing status games. They gain status by attacking people playing wealth creation games.

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.

You will get rich by giving society what it wants but does not yet know how to get. At scale.

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.

Pick business partners with high intelligence, energy, and, above all, integrity.

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

Specific knowledge is knowledge you cannot be trained for. If society can train you, it can train someone else and replace you. ↓ Specific knowledge is found by pursuing your genuine curiosity and passion rather than whatever is hot right now. ↓ Building specific knowledge will feel like play to you but will look like work to others. ↓ When specific knowledge is taught, it’s through apprenticeships, not schools. ↓ Specific knowledge is often highly technical or creative. It cannot be outsourced or automated.

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

Fortunes require leverage. Business leverage comes from capital, people, and products with no marginal cost of replication (code and media).

Code and media are permissionless leverage. They’re the leverage behind the newly rich. You can create software and media that works for you while you sleep.

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

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

Reading is faster than listening. Doing is faster than watching.

You should be too busy to “do coffee” while still keeping an uncluttered calendar.

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.

There are no get-rich-quick schemes. Those are just someone else getting rich off you.

What’s the difference between wealth and money? Money is how we transfer wealth. Money is social credits. It is the ability to have credits and debits of other people’s time.

If I do my job right, if I create value for society, society says, “Oh, thank you. We owe you something in the future for the work you did in the past. Here’s a little IOU. Let’s call that money.” [78]

Wealth is the thing you want. Wealth is assets that earn while you sleep. Wealth is the factory, the robots, cranking out things. Wealth is the computer program that’s running at night, serving other customers. Wealth is even money in the bank that...

Technology democratizes consumption but consolidates production. The best person in the world at anything gets to do it for everyone.

Specific knowledge is found much more by pursuing your innate talents, your genuine curiosity, and your passion. It’s not by going to school for whatever is the hottest job; it’s not by going into whatever field investors say is the hottest.

If you’re not 100 percent into it, somebody else who is 100 percent into it will outperform you.

“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.

The old model of making money is going to school for four years, getting your degree, and working as a professional for thirty years. But things change fast now. Now, you have to come up to speed on a new profession within nine months, and it’s obsolete four years later. But within those three productive years, you can get very wealthy.

It’s much better to be at 9/10 or 10/10 on foundations than to try and get super deep into things.

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]

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]

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.

Another example is all the people you dated until you met your husband or wife. It was wasted time in the goal sense. Not wasted in the exponential sense, not wasted in the learning sense, but definitely wasted in the goal sense.

When you’re dating, the instant you know this relationship is not going to be the one that leads to marriage, you should probably move on. When you’re studying something, like a geography or history class, and you realize you are never going to use the information, drop the class. It’s a waste of time. It’s a waste of your brain energy.

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]

To get rich, you need leverage. Leverage comes in labor, comes in capital, or it can come through code or media. But most of these, like labor and capital, people have to give to you. For labor, somebody has to follow you. For capital, somebody has to give you money, assets to manage, or machines.

So to get these things, you have to build credibility, and you have to do it under your own name as much as possible, which is risky. 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. [78]

It’s ownership versus wage work. 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.

If you look at even doctors who get rich (like really rich), it’s because they open a business. They open a private practice. The private practice builds a brand, and the brand attracts people. Or they build some kind of a medical device, a procedure, or a process with an intellectual property.

Essentially, you’re working for somebody else, and that person is taking on the risk and has the accountability, the intellectual property, and the brand. They’re not going to pay you enough. They’re going to pay you the bare minimum they have to, to get you to do their job. That can be a high bare minimum, but it’s still not going to be true wealth where you’re retired but still earning. [78]

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] Everybody who really makes money at some point owns a piece of a product, a business, or some IP. That can be through stock options if you work at a tech company. That’s a fine way to start. 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]

You get rewarded by society for giving it what it wants and doesn’t know how to get elsewhere. A lot of people think you can go to school and study for how to make money, but the reality is, there’s no skill called “business.” [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] 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. You’re one short hop from a mutiny or getting eaten or torn apart by the mob. [78]

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]

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.