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

by Eric Jorgenson

general contractor is obviously a better place to be. But how do we measure it? How do we know it’s better? Well, we know it’s better because this person has some accountability. They’re responsible for the outcome, they have to sweat at night if things aren’t working. Contractors have leverage through laborers working for them. They also have little bit more specific knowledge: how to organize a team, make them show up on time, and how to deal with city regulations. The next level up might be a real estate developer. A developer is someone who’s going to buy a property, hire a bunch of contractors, and transform it into something higher value. They probably have to take out a loan to buy a house or go to investors to raise money. They buy the old house, tear it down, rebuild it, and sell it. Instead of $50,000 like the general contractor, or fifteen dollars an hour like the laborer, the developer might be able to make a million dollars or half a million dollars in profit when they sell the house for more than they bought it for, including the expenses of construction. But now, notice what is required from the developer: a very high level of accountability.

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