Notes: How to Get Rich - Naval Ravikant
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Naval Ravikant provides principles for wealth creation through entrepreneurship and leverage. Wealth is created through businesses and assets that earn income without constant work. The most important skills for wealth creation are reading, writing, arithmetic, persuasion, and computer programming. Entrepreneurs should find founder-product-market fit by pursuing their specific knowledge and building something that utilizes leverage at scale through the internet. Judgment, accountability, and developing wisdom over the long term are essential for accessing leverage that can multiply wealth.
![2. Product (b)
• How to decide what should I do? You should feel…
– “This is something I can be amazing at” [Be the best]
– “While still being authentic to who I am.” [Be authentic]
• How to become the best in the world at what you do?
– Keep redefining what you do until this is true.
– Your objective & skills should converge to make you #1
– Keep changing your objective until it arrives at your…
• specific knowledge,
• authentic skillsets,
• position and capabilities,
• location and interests.](https://image.slidesharecdn.com/pptnoteshowtogetrichnavalravikant-200718165957/85/Notes-How-to-Get-Rich-Naval-Ravikant-19-320.jpg)
Notes: How to Get Rich - Naval Ravikant
- 1. How to Get Rich (without getting lucky) - Naval Ravikant Summary & Infographics by Kyle Kowalski, @Slowwco https://www.sloww.co/how-to-get-rich-naval- ravikant/
- 2. Table of Contents 1. Money & Wealth 3. Leverage Mythbusting Traditional Work Wealth Creation Compound Interest Freedom & “Retirement” Beyond Wealth What is Leverage? Forms of Leverage Scale of the Internet Accountability Judgment Wisdom Specific Knowledge 2. Entrepreneurship 4. Important Skills Entrepreneurship in a Nutshell Founder-Product-Market Fit Wealth as a Byproduct Inspiration-Sprint-Rest Cycles 5 Most Important Skills Learn to Sell, Learn to Build Reading Learning Decision Making
- 3. Minimum Viable Principles for Wealth Creation • Wealth creation is a skillset anyone can develop • It’s merely a question of education and desire • It is not about… – penny-pinching your way to basic sustenance – keeping expenses low, and – maybe retiring early • It is about wealth creation
- 4. Who is this for? • Anybody who wants to be entrepreneurial • Anybody who wants to control their own life • Anybody who wants to deterministically and reliably improve their ability to create wealth over time • Anybody who is patient and is looking at the long haul • Applies to almost everybody who has a complete body, sound mind, and is looking to work.
- 5. 1. Money & Wealth
- 6. Mythbusting Traditional Work • You’re not going to create wealth through ‘traditional’ work – You’re not going to get rich renting out your time – You can’t earn non-linearly – Because your inputs are very closely tied to your outputs • Get a job, career, or profession where… – Your inputs don’t match your outputs – With higher the creativity component – Use tools and leverage to disconnect inputs & outputs
- 7. Wealth Creation • Wealth is businesses and assets that earn while you sleep. • Wealth is a very positive-sum game. Everybody can be wealthy. • Money is how we transfer wealth; It’s the ability to have credits and debits of other people’s time. • Money is not going to solve all of your problems; but it’s going to solve all of your money problems. • Ethical wealth creation is possible. Don’t despise wealth
- 8. Compound Interest • All the benefits in life come from compound interests—relationships, wealth, learning, reading, creating • You’ll get paid on a long enough timescale – 10 or 20 years. Sometimes five. – Not generated in one giant payout or one big year • So, enjoy it. Keep doing it & doing it & doing it
- 9. Freedom & “Retirement” (1) You don’t have to… You can… You don’t have to be any place you don’t want to be You can wake up when you want You don’t have to do anything you don’t want to do You can sleep when you want You don’t have a boss You are being your own sovereign individual This is the purpose of wealth! • How to achieve this? Own equity - a piece of: – a product, or – a business, or – some kind of IP
- 10. Freedom & “Retirement” (2) • People who are living far below their means enjoy a freedom that people busy upgrading their lifestyles just can’t fathom. • Maintain your freedom instead of upgrading your lifestyle. • You will have much more creative expression, and it’s much less about money.
- 11. Beyond Wealth • These cannot be bought. It must be earned. You have to cultivate them. • They can bring you a lot more peace and happiness than any amount of money ever will. 3 things money cannot buy A fit body A calm mind A house full of love Health Mental health Close relationships
- 13. Entrepreneurship in a Nutshell • Entrepreneurship is an act of: – Creating something new from scratch – Predicting that society will want it – Figuring out how to scale it, and – Get it to everybody in a profitable, self-sustaining way Ask yourself: What am I really good at that the market values? First variable: If you can find what you are good at, Second variable: If you can find what the market values… You’ll keep it up You’ll develop the judgment You’ll like to do it Eventually people will give you the resources You won’t be afraid to take on accountability
- 14. “Productize Yourself” • You can get paid for just being you. • Making money should be… – a function of your identity, and – what you like to do. • If you are building and marketing something that’s an extension of who you are, no one can compete with you.
- 15. Founder-Product-Market Fit • The combination of the three should be your overwhelming goal ; It’s the most important thing for any entrepreneur to find. • If you find the fit, then you are naturally inclined to build the right product for a market • It’s inevitable if you’re doing something… – you love and – the market wants it
- 16. 1. Founder (a) • What am I obsessed with? – Find things you’re good at, things you enjoy doing – It’s like doing all of your hobbies for a living. – Just keep an eye out to commercialize it. • Where am I a natural? Is this authentic to me? – Everyone is a natural at something. Pick things where you are a natural. Double down on that. – You can escape competition. Because no one can compete with you on being you.
- 17. 1. Founder (b) • Where is my unique combination/ intersection? – There are probably multiple things you’re natural at; you have different skillsets/ interests/ obsessions – Take those things and combine them – Through your sheer interest and enjoyment, end up top 25% or top 10% or top 5% • What feedback have I received from others? – People (smart bosses, co-workers, investors) will realize you are world-class in this one thing. – They will push you towards that too
- 18. 2. Product (a) • What should I create? – Create something for yourself, because you want it – “It feels like play to me, but it looks like work to others.” • Ask yourself, what’s the product…. – that I’m excited to work on? – that I know how to build it (specific knowledge)? • Then, figure out – Which one of those things you can provide for society that it does not yet know how to get (but it will want)? – How to get it to everyone?
- 19. 2. Product (b) • How to decide what should I do? You should feel… – “This is something I can be amazing at” [Be the best] – “While still being authentic to who I am.” [Be authentic] • How to become the best in the world at what you do? – Keep redefining what you do until this is true. – Your objective & skills should converge to make you #1 – Keep changing your objective until it arrives at your… • specific knowledge, • authentic skillsets, • position and capabilities, • location and interests.
- 20. 3. Market • Pick an industry where you can play long-term games with long-term people Pick a business model where you can benefit from… ‘0’ Marginal cost Network effects Scale economies Your product should’ve zero/ low marginal costs Each new user adds value to the existing user base Get paid at scale; Scale with labor/ capital/ code/ media Ex. Tech/ media products - where creating another copy (reproduction) is free Always think about how your users/ customers can add value to each other Figure out how to scale it so everybody can have one
- 21. Wealth as a Byproduct • Society will pay you for creating things that it wants. At scale. • But don’t be too goal-oriented on money. • Then… – you won’t pick the right thing, – you won’t pick the thing that you love to do, – so you won’t go deep enough into it.
- 22. Inspiration-Sprint-Rest Cycles (a) Work effectively by building a marathon of sprints Inspiration SprintRest • Be impatient with actions, patient with results • Inspiration is perishable. So when you’ve inspiration, act on it right then and there.
- 23. Inspiration-Sprint-Rest Cycles (b) • Nobody really works or can work for 80 to 120 hours a week at high output, with mental clarity. – Your brain breaks down. – You won’t have good ideas. Do not have Aim to have A busy calendar Enough free time A busy mind A free mind A cluttered calendar A very clean calendar Do coffee meetings Have (almost) no meetings
- 24. 3. Leverage
- 25. What is Leverage? • We are now living in an age of nearly infinite leverage • To get rich, you’re going to need leverage. Technology leverage Business leverage Technology drives leverage 1. People Technology helps to mass produce or create efficiently 2. Capital To figure out how to commercialize it, and to make it available to everybody. 3. Products with no marginal cost of replication (code and media)
- 26. Labour leverage Capital leverage Code/ Media leverage Permission-based Permission-based Permission-less Oldest & the worst form of leverage Powerful form of leverage The most interesting & the most important leverage It’s the people working for you Can be converted to labor and other things Products have no marginal cost of replication Have the minimum amount of people working with you Somebody has to give you money to invest or to turn into a product. You can multiply your efforts without other humans and without money So that you can use the other forms of leverage To raise money, apply your specific knowledge, with accountability, & show resulting good judgment. If you can’t code, write books & blogs, record videos & podcasts. You don’t need anyone’s permission to do them. Forms of Leverage
- 27. Scale of the Internet • Internet connects every human to each other on the planet – You can now reach anyone and everyone – You can find your audience • Through the internet, just by uniquely expressing yourself , you can: – build a business, – create a product, – build wealth, and – make people happy…. • The internet enables any niche interest, as long as you’re the best at it to scale out. • And the great news is because every human is different, everyone is the best at something. Being themselves.
- 28. Accountability • Accountability is important because that’s how you’re going to: – get leverage – get credibility – get equity/ a piece of the business. • Accountability is to: – Put your skin in the game – Put your personal reputation on the line • If you take on accountability… – People will line up behind you. – Society will reward you with responsibility, equity, and leverage. • Accountability is something you can take on immediately. Judgment and leverage tend to come later.
- 29. Judgment • In an age of infinite leverage, judgment becomes the most important skill. – Leverage is a force multiplier for your judgement. – Leverage is something that society gives you after you’ve demonstrated judgment. • Get it faster by learning high-leverage and foundational skills (e.g. permissionless leverage) • Judgement requires experience – Put yourself in positions where you can exercise judgment – That will come from taking on accountability.
- 30. Wisdom • Wisdom is… – knowing the long-term consequences of your actions, and – then making the right decision to capitalize on that. • Wisdom is just judgment on a personal domain. • The longer your time horizon, the wiser you’re going to seem to everybody around you.
- 31. Specific Knowledge (a) • Specific knowledge is knowledge that… – you cannot be trained for, – it cannot be outsourced or automated – often highly technical or creative • Specific knowledge are… – Things you enjoy doing or are naturally inclined doing – It will feel like play to you but will look like work to others. • Two forms of specific knowledge: – Timeless specific knowledge usually can’t be taught, and it sticks with you forever. – Timely specific knowledge comes and goes; but it tends to have a fairly long shelf life.
- 32. Specific Knowledge (b) • How to find your specific knowledge? – pursuing your innate talents, – your genuine curiosity, and – your passion • It can only be built as part of a… – larger obsession, – interest, and – time spent in that domain • It can be found by observation… – Look back on your own life and – See what you’re actually good at.
- 33. Important Skills
- 34. 5 Most Important Skills 1. Reading 2. Writing 3. Arithmetic 4. Persuasion (which is talking) 5. Computer Programming (an applied form of arithmetic that just gets you so much leverage for free in any domain that you operate in)
- 35. Learn to Sell, Learn to Build • If you can do both…. – You will be unstoppable. – It is the ultimate. – That’s when you get true superpowers. – That’s when you get people who can create entire industries.
- 36. Reading • Learn to educate yourself by reading • Read what you love until you love to read. • The internet has put world’s knowledge at your fingertips • The means of education/ learning are abundant. It’s the desire to learn that’s scarce. • Cultivate the desire to learn.
- 37. Learning • How to learn faster? – It’s no. of iterations that drives the learning curve. So, • Have more iterations • Take the more shots – It’s not just about the hours put in • Study microeconomics, game theory, psychology, persuasion, ethics, mathematics, and computers Understand Logic & Mathematics Understand Scientific method Separate false from truth (in any field) Focus on the Foundations:
- 38. Decision Making • Reject most advice. But…. – listen to enough of it, – read enough of it, – to know what to reject and what to accept. • The best founders I know read and listen to everyone. But then they ignore everyone and make up their own mind. • Have your own point of view.
- 39. Further Reading • Naval’s original tweetstorm: https://twitter.com/naval/status/1002103360646823936 • Podcast - Every episode: https://www.youtube.com/watch?v=1-TZqOsVCNM • Podcast transcript: https://nav.al/rich • Summary by Sloww’s article: https://www.sloww.co/how-to-get-rich-naval- ravikant/ • Whimsical’s mindmap: https://whimsical.com/BGVa2B1emjcVfkpHRpDNgB • Summary by Consultant's Mind: https://www.consultantsmind.com/2019/06/27/naval-ravikant/ • Summary by Broc Pacholik: https://brocpacholik.com/naval-ravikant-how-to-get- rich-summary/ • A PDF Summary: https://cdn.shopify.com/s/files/1/1186/0402/files/HOW-TO-GET- RICH.pdf • WP-ERP Summary: https://wperp.com/32125/get-rich-without-being-lucky/ • Naval on Joe Rogan Podcast - Naval Ravikant's Principles of Wealth Creation: https://www.youtube.com/watch?v=5oNcoj4G0xc
- 40. Brought to you by Sathyanand.S Twitter: @sathyanand1985 Newsletter: aurasky.substack.com