Advice on building wealth, becoming a better thinker, happiness, health, and philosophy
Do you know those questions where if you could have dinner with anyone living or dead, who would you have it with and why?
For me, it would be Naval Ravikant.
And to be honest, I didn’t know much about his life. Maybe you don’t either. I know that he founded AngelList. I know that he has a brother Kamal Ravikant who is also a force of nature. Here is a short timeline from a new (and free book) called The Almanack of Naval Ravikant.
- 1974 — Born in Delhi, India
- 1985 — Age 9 — Moved from New Delhi to Queens, NY
- 1989 — Age 14 — Attended Stuyvesant High School
- 1995 — Age 21 — Graduated Dartmouth (studied computer science and economics)
- 1999 — Age 25 — Founder / CEO of Epinions
- 2001 — Age 27 — Venture Partner at August Capital
- 2003 — Age 29 — Founder of Vast.com, a classified ad marketplace
- 2005 — Age 30 — Is called “Radioactive Mud” in Silicon Valley
- 2007 — Age 32 — Founded Hit Forge, a small VC fund originally conceived as an incubator
- 2007 — Age 32 — Launched VentureHacks blog
- 2010 — Age 34 — Launched AngelList
- 2010 — Age 34 — Invested in Uber
- 2012 — Age 36 — Lobbied Congress to get the JOBS Act passed
- 2018 — Age 43 — is named “Angel Investor of the Year”
Through an e-mail newsletter, I learned about the Almanack of Naval Ravikant. It is being written by Eric Jorgenson and collects and curates Naval’s wisdom from Twitter, Podcasts, and Essays over the past decade. The wisdom of Naval Ravikant, created and edited by Eric Jorgenson, with Illustrations by Jack Butcher, and a Foreword by Tim Ferriss.
It was released on Sept 15th, 2020. Within one day, I devoured the book. I rarely read and finish books so quickly, but this book was a wealth of amazing tidbits and deep dives into things that I thought a lot about but did not have the wisdom to put it into concepts as Naval can. I encourage you to check out the book for yourself, but this is what I took away:
Advice on building wealth
Making money is not a thing you do — it’s a skill you learn
When you think of making money as a skill that you learn, that changes it from something ‘magical’ that happens or that people are born with, to something that anyone can learn. Except what I am realizing is that I’m not very good at making money myself, even though I’ve earned what I consider good salaries in my work.
Rather than learning how to make money, I have learned how to trade my time for money, which is, as I’m learning, not how to become wealthy.
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.
While in management consulting, I remember everybody had ambitious A-type personalities. I wondered if I was in and with, the right company (that imposter syndrome feeling that I’m sure everybody gets during a change). When the promotion season began, everybody worked with their counselors to make the case for their promotion. And then in September and October, the consultants would havehush discussions with each other about who got promoted. We were all seeking money and status. But I doubt that any of us were thinking about wealth.
In a way, this is the idea that Rich Dad, Poor Dad by Robert Kiyosaki outlines. You get rich by acquiring assets that earn while you sleep.
You will get rich by giving society what it wants but does not yet know how to get. At scale.
Steve Jobs realized that everybody wanted a smartphone. They wanted a computer that they could have in their pocket that did everything a phone did and more. Steve, and Apple, figured out how to build the iPhone and then scale it so that millions of people could have one.
If society already knew how to get what they want, they would not need you. In other words, a lot of the times, when we adopt a ‘me too’ attitude and mindset and copy other companies or people’s business models, it does not get us far. Instead, we have to keep redefining ourselves (see the below quote on becoming the best in the world).
Arm yourself with specific knowledge, accountability, and leverage.
Naval says that there are three components to making money: specific knowledge, accountability, and leverage.
Specific knowledge is knowledge you cannot be trained for. If society can train you, it can train someone else and replace you.
For example, one type of specific knowledge is sales skills. You are not a ‘natural’ at selling.
Specific knowledge cannot be taught, but it can be learned.
When you see a salesman sell, you see that they are amazing. They are good at selling. They learned how to sell from somewhere, but not from a classroom setting. Maybe they learned to do it when they were younger. Or they made a hundred cold calls in university for alumni donations. Or their parents were hard negotiators.
How do you know what kind of specific knowledge you have? Take a look at the things that you did when you were younger that were effortless.
- Did you play a lot of games when you were younger? You may understand game theory.
- Could you pick up an instrument and quickly learn and play it? You have musical talent.
- An obsessive personality: you dive into things and remember them quickly.
Why is specific knowledge so important? It is important because it is something you and only you can know.
No one can compete with you on being you.
Naval, for instance, loves to read and loves technology. He learns quickly but also gets bored easily. He is in venture investing, which requires him to come up to speed very quickly on new technologies. It matches up well with his specific knowledge and skillsets.
Embrace accountability, and take business risks under your own name. Society will reward you with responsibility, equity, and leverage.
In other words, you need to have skin in the game. If a company hires you to do work, but the work fails for whatever reason, it is the company that takes the blame, not you. Conversely, if the work is successful, the company gets all the reward. Again, think back to the idea of choosing wealth over money and status. The company pays you for your time and expertise (money), but they have all of the wealth (you as an asset to generate them money).
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.
In Naval’s vast startup experience, he sees that code and media are the leverage that people need. Combine that specific knowledge and accountability and you have a winning combination.
Take a look at Casey Neistat who video blogged every day under his name and channel. If he failed, it is his reputation at stake. Through video blogging every day, he developed specific knowledge around entertaining videos, storylines, narratives, and more.
If you can’t code, write books and blogs, record videos and podcasts.
Can’t code? Learn to write. Learn to shoot and record videos. Use your voice and record podcasts. Media is an asset that, maybe it won’t build your wealth right away, but if you are playing the long game, will help you at some point down the road, whether it becomes content that new fans discover down the road or whether it helps you build specific knowledge and skills.
Reading is faster than listening. Doing is faster than watching.
I would agree that doing is faster than watching. I’m not sure about reading vs. listening though — that’s something that I’ll have to experiment with more. I will say that I do a lot more reading than listening these days and I do believe that listening can be a great way of absorbing the knowledge and experience of others while doing things that do not require your full attention or focus.
Become the best in the world at what you do. Keep redefining what you do until this is true.
Love this quote. If you are struggling to find what you are the best at, start to steal from others. I don’t mean plagiarizing or copying content and strategies directly, but stealing and then adapting it to your situation. Put your spin on the content or the strategy. Do this enough with other people, and you will start to have a unique take on things.
You don’t get rich by spending your time to save money. You get rich by saving your time to make money.
Hard work is important. But think about this: you can work at a restaurant 80 hours/week and never become rich. This means that although hard work is important, the direction you focus your hard work in is even more important. How do you know what direction to apply it to? You have to develop judgment.
Advice on becoming a better thinker
How do you form good judgment? Smart people with good judgment are clear thinkers. They reason from first principles. There are people (I would include myself in here) that memorize a lot of advanced concepts but have no way of explaining these concepts to a child or deriving these from basic fundamental principles. Clear thinkers can explain concepts with such simplicity, they could explain it to a child.
Decision-making is everything.
Naval says that if you are right 80% of the time compared to someone 70% of the time, the person that is right 80% of the time will be valued and compensated in the market hundred of times more. For example, if you manage $1 billion and you are right 10% more often than somebody else, that means your decision-making creates $100 million worth of value on a judgment call.
Collect mental models… [they] are really just compact ways for you to recall your own knowledge
Naval collects mental models from evolution, game theory, Charlie Munger, Nassim Taleb, and Benjamin Franklin.
The idea of inversion
Nassim cannot say what is going to work. But, he can try to eliminate what is not going to work. He believes that being successful is about not making mistakes. In other words, it is not about having good judgment, it is about not having bad judgment.
If you can’t decide, the answer is no
Whenever Naval is faced with a difficult choice:
- Should I marry this person?
- Should I take this job?
- Should I buy this house?
If he cannot decide, the answer is no. The reason is that there are tons and tons of options. When you choose something, you get locked in for a long time. You start a relationship with someone that will be five years or more. You buy the house and live in it for decades. It is important that you only say yes when you are very certain. You may never be absolutely certain, but you can be fairly certain.
Simple heuristic: If you’re evenly split on a difficult decision, take the path more painful in the short term.
When you have a difficult decision, you may have two paths. One path is painful in the short-term. Your brain wants to avoid pain. But the other path has pain further out in the future. The path that has pain in the short-term has long-term gain associated. And when you factor in compound interest, the long-term gain is what you want to go toward.
When you read and you get confused, it is like working out and your brain is getting overwhelmed. In the long run, you are getting smarter because you are absorbing new concepts from working at the limit or edge of your capability.
How do you develop mental models?
How do you develop a habit of reading?
Read what you love until you love to read.
The best books to read are the ones you’re excited about reading all the time. Also do not be afraid to skip around and leave books unfinished. I do it all the time — I skip around different books, reading only what interests me at the moment or to solve a problem that I am working on.
Advice on happiness
Maybe happiness is not something you inherit or even choose, but a highly personal skill that can be learned, like fitness or nutrition.
This quote surprised me — happiness is a skill? I have always thought of happiness as part of the process itself, the journey, not the destination.
For Naval, happiness is there when you remove the sense of something missing in your life. The state when nothing is missing. When nothing is missing, your mind shuts down and stops running into the past or future to regret something or to plan something.
Every positive thought or action has a seed of a negative thought or action within it. If you say that you are happy, it means that you were sad at one point. If you do something nice for someone, you were not able to do something nice for someone else.
Happiness is about the absence of desire.
Happiness, love, and passion…aren’t things you find — they’re choices you make.
Happiness, as Naval mentions, is a skill that you develop. Meditation can help, but in his experience (and mine), as much as it can help you to stay present and focused, one little comment can get your ego worked up.
A happy person isn’t someone who’s happy all the time. It’s someone who effortlessly interprets events in such a way that they don’t lose their innate peace.
Peace is happiness at rest, and happiness is peace in motion. We think that peace is achieved by resolving all of your external problems (money, having a great relationship, fancy toys, etc.), but there are unlimited external problems. There’s always someone out there with more money, or better relationships with their family or kids or partner, or has fancier toys than you. Therefore, the only way to get peace on the inside is to give up this idea of solving all of your external problems.
How can you build the skill of happiness?
If you look at happiness as a skill, and I think you should, you can build the skill by adopting good habits. Working out. Eating healthy. Not spending your time on social media or the news.
At the end of the day, you are a combination of your habits and the people who you spend the most time with.
What is the difference between people who get happier as they get older and people who don’t? The habits they have developed. Some habits will increase your short term happiness in compensation for your long term happiness (e.g., coffee or video games).
What habits can help you build the skill of happiness?
- Meditation and being present in the moment
- Asking yourself, what’s the positive side of this?
- Identify your desires and ask yourself, is this that important that I’ll be unhappy unless this goes my way?
- Working out every day
- Tell your friends you are a happy person. Then you will be forced to conform to it (you are using a consistency bias against you).
You’re going to die one day, and none of this is going to matter. Are you aiming to leave a legacy? In three generations, you will be forgotten. So enjoy yourself while you still have the time. Do something positive. Make someone happy. Laugh. And do your work.
Advice on health
Outside of math, physics, and chemistry, there isn’t much ‘settled science’. We’re still arguing over what the optimal diet is.
Many of our health problems are based on the environment around us. We did not evolve to live in a perfectly sterile and clean environment. We’re evolved to live in much smaller tribes and to have more family around us. We’re not meant to check our phones every five minutes. There’s a constant struggle to say no when your genes always want to say yes (to sugar, to staying in the relationship, to drugs and alcohol).
The harder the workout, the easier the day.
I have found this to be true in my life. One morning, while on a travel project, I decided to see if I could run 5k before work. I had never run 5 km before without walking or stopping. After running that 5k, I was on fire for that day, even for that week.
“I don’t have time” is just another way of saying “It’s not a priority”
This is the most common excuse that people throw up whenever someone tells them to adopt a good habit. But when you say you don’t have the time, you are saying that it is not a priority in your life. Saying that it isn’t a priority is better because you don’t delude yourself into thinking that if you just had the time, you would do it.
That was the excuse that I threw up every time someone said “you should start a business”. “I don’t have time” is what I would say. But after realizing that it wasn’t a priority, I felt a lot better saying that it wasn’t a priority instead. Because whenever I do have free time, I’m not constantly thinking I should start a business.
Meditation is intermittent fasting for the mind.
Meditation is one of the few activities where your autonomic nervous system meets your voluntary nervous system (and that is through your breath). For example, if you, sitting at your desk, started to heavily breathe (imagine you ran full speed around the block), you will start to feel stressed. And take a situation where you are stressed (job interview, first date) and take long deep breaths, and you will feel immediately calmer.
Life-hack: When in bed, meditate. Either you will have a deep meditation or fall asleep. Victory either way.
There are different forms of meditation:
- Hiking is walking meditation
- Journaling is writing meditation
- Praying is gratitude meditation
- Showering is accidental meditation
- Sitting quietly is direct meditation
Advice on choosing yourself
A good way to take action? Commit externally to enough people. For example, if you want to quit smoking, all you have to do is go to everybody you know and say “I quit smoking. I did it. I give you my word.”
Most of us can’t go to that extreme though. And it is okay to be honest with yourself and say “I’m not ready to give up smoking. But I’ll set a more reasonable goal for myself and cut down in stages.”
Impatience with actions, patience with results.
When you have inspiration, act on it right then and there.
On growing yourself
Motivation is relative. Everyone is motivated at something. You just have to find the thing you’re into.
Naval’s principles that he would pass down to his kids?
- Read everything that you can. Not just the things that society tells you are ‘good’ books. Develop a love for reading. Eventually, you will guide yourself to the things that you should and want to be reading.
- Develop mathematics and persuasion skills. These are related to reading and help you navigate the real world. You don’t have to know a lot of math, just the basics.
On freeing yourself
Naval’s definition of freedom has changed over the years, which I think is fascinating. He used to think of freedom as “freedom to”. Freedom to do anything. Freedom to go wherever, whenever. Now, he thinks of freedom as “freedom from”. Freedom from being sad. From being forced to do things. From anger.
A taste of freedom can make you unemployable.
What is the meaning and purpose of life?
Because it is such a big question, Naval provides three answers:
- 1. It’s personal. You have to find your own meaning.
- 2. There is no meaning and no purpose in life. Anything you do will fade. It will disappear, just like the human race will disappear and the planet will disappear. No one is going to remember you past a certain number of generations. You have to create your own meaning.
- 3. In physics, the second law of thermodynamics states that entropy only goes up. Everything that we do, from working on our computers, to driving cars, to buying groceries, increases entropy until the heat death of the universe. Eventually, everybody will be at the same energy level, which means that we are all one thing.
Naval’s core values
- Honesty. Naval wants to be able to just be himself. Any time there is a disconnect between what he is thinking and saying, it creates multiple threads in his mind. He is no longer present and he has to be future-planning or past-regretting every time he talks.
- Long term thinking. All benefits in life come from compound interest, whether in money, relationships, love, health, activities, or habits.
- Peer relationships. He does not like the hierarchical relationship. He never wants to be above or below somebody.
- Anger. Naval has made it a point to cut out all anger in his life. He doesn’t want to be angry. He doesn’t want to be around angry people.
“To find a worthy mate, be worthy of a worthy mate.” — Charlie Munger
After reading the book, and writing up the notes, I think the takeaways that I will be thinking about for a long time include:
- Be yourself. No one can compete at being you better than you. And therein is your competitive advantage.
- Play the long game and let compound interest, well, compound. The long game applies to money. It applies to relationships and love. It applies to health. What are the things that you can do now that will compound in the future? Focus on those things.
- Become a better thinker by reading and understanding the basics.Any problems that we face today, and have been faced in the past, have been written about in the past. If we want to solve a problem that only exists at this time, read books written at this time.
- Run uphill. Naval quotes Jerzy Gregorek: “Easy choices, hard life; hard choices, easy life”. If you are faced with two almost equal options, choose the one with short term pain.
- Happiness is the absence of desire. I love the quote from Naval, “Desire is a contract that you make with yourself to be unhappy until you get what you want.”
- If you can’t decide [easily], the answer is no. There are so many options and the moment you choose an option, you are ‘stuck’. This means that if you are choosing something important (such as where to live, who to marry, etc.), you should take a long time to consider the decision.