Naval Ravikant on Wealth Creation

Here is a list of ideas from Naval’s now-famous Tweetstorm, elaborated in this blog/podcast. I turned this into a checklist to avoid errors in judgment when evaluating business opportunities and how to spend my time.

  1. Seek Wealth, Not Money or StatusWealth is assets that earn while you sleep
  2. Make Abundance for the World Wealth isn’t about taking something from somebody else
  3. Free Markets Are Intrinsic to HumansWe use credits and debits to cooperate across genetic boundaries
  4. Making Money Isn’t About LuckBecome the kind of person who makes money
  5. Make Luck Your DestinyBuild your character in a way that luck becomes deterministic
  6. You Won’t Get Rich Renting Out Your Time You can’t earn non-linearly when you’re renting out your time
  7. Live Below Your Means for FreedomPeople busy upgrading their lifestyles just can’t fathom this freedom
  8. Give Society What It Doesn’t Know How to GetSociety will pay you for creating what it wants and delivering it at scale
  9. The Internet Has Massively Broadened Career PossibilitiesThe Internet allows you to scale any niche obsession
  10. Play Long-Term Games With Long-Term PeopleAll returns in life come from compound interest in long-term games
  11. Pick Partners With Intelligence, Energy and IntegrityYou can’t compromise on any of these three
  12. Partner With Rational OptimistsDon’t partner with cynics and pessimists; their beliefs are self-fulfilling
  13. Arm Yourself With Specific KnowledgeSpecific knowledge can be found by pursuing your genuine curiosity
  14. Specific Knowledge Is Highly Creative or TechnicalSpecific knowledge is on the bleeding edge of technology, art and communication
  15. Learn to Sell, Learn to Build If you can do both, you will be unstoppable
  16. Read What You Love Until You Love to Read You should be able to pick up any book in the library and read it
  17. The Foundations Are Math and LogicMathematics and logic are the basis for understanding everything else
  18. There’s No Actual Skill Called ‘Business’ Avoid business schools and magazines
  19. Embrace Accountability to Get LeverageTake risks under your own name and society will reward you with leverage
  20. Take Accountability to Earn EquityIf you have high accountability, you’re less replaceable
  21. Labor and Capital Are Old LeverageEveryone is fighting over labor and capital
  22. Product and Media Are New LeverageCreate software and media that work for you while you sleep
  23. Product Leverage is EgalitarianThe best products tend to be available to everyone
  24. Pick a Business Model with LeverageAn ideal business model has network effects, low marginal costs and scale economies
  25. Example: From Laborer to Entrepreneur From low to high specific knowledge, accountability and leverage
  26. Judgment Is the Decisive SkillIn an age of nearly infinite leverage, judgment is the most important skill
  27. Set an Aspirational Hourly RateOutsource tasks that cost less than your hourly rate $5,000 an hour
  28. Work As Hard As You CanEven though what you work on and who you work with are more important
  29. Be Too Busy to ‘Do Coffee’Ruthlessly decline meetings 
  30. Keep Redefining What You DoBecome the best in the world at what you do
  31. Escape Competition Through Authenticity Nobody can compete with you on being you 
  32. Play Stupid Games, Win Stupid PrizesCompetition will blind you to greater games
  33. Eventually, You Will Get What You DeserveOn a long enough timescale, you will get paid
  34. Reject Most AdviceMost advice is people giving you their winning lottery ticket numbers
  35. A Calm Mind, a Fit Body, a House Full of LoveWhen you’re finally wealthy, you’ll realize it wasn’t what you were seeking in the first place 
  36. There Are No Get Rich Quick SchemesGet rich quick schemes are just someone else getting rich off you
  37. Productize Yourself Figure out what you’re uniquely good at, and apply as much leverage as possible
  38. Accountability Means Letting People Criticize YouYou have to stick your neck out and be willing to fail publicly
  39. We Should Eventually Be Working for OurselvesBut we will have to make sacrifices and take on more risk 
  40. Being Ethical Is Long-Term GreedyIf you cut fair deals, you will get paid in the long run
  41. Envy Can Be Useful, or It Can Eat You AliveEnvy can give you a powerful boost, or it can eat you alive 
  42. Principal-Agent Problem: Act Like an OwnerIf you think and act like an owner, it’s only a matter of time until you become an owner
  43. Kelly Criterion: Avoid RuinDon’t ruin your reputation or get wiped to zero
  44. Schelling Point: Cooperating Without CommunicatingPeople who can’t communicate can cooperate by anticipating the other person’s actions
  45. Turn Short-Term Games Into Long-Term GamesImprove your leverage by turning short-term relationships into long-term ones
  46. Compounding Relationships Make Life EasierLife gets a lot easier when you know someone’s got your back 
  47. Price Discrimination: Charge Some People MoreYou can charge people for extras based on their propensity to pay
  48. Consumer Surplus: Getting More Than You Paid ForPeople are willing to pay more than what companies charge
  49. Net Present Value: What Future Income Is Worth TodaySee what future income is worth today by applying a discount to its future value
  50. Calculating the Hidden Costs of ProductsExternalities let you account for the true cost of products by including hidden costs
  51. Bonus: Finding Time to Invest in Yourself If you have to work a “normal job,” take on accountability to build your specific knowledge

Technology is, by definition, the intellectual frontier. It’s taking things from science and culture that we have not figured out how to mass-produce or create efficiently and figuring out how to commercialize it and make it available to everybody. 

Another good indicator of specific knowledge is when someone can’t give a straight answer to the question: “What do you do every day?” Or you get an answer along the lines of, “Every day is different based on what’s going on.”

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