Naval Ravikant How To Get Rich - Summary

I'd argue this video is one of the most valuable pieces of content that exists, highly recommend listening to the whole thing.

As a precursor to watching or future reference point, this is what I felt were some of the most important points..

The rules to becoming wealthy are different than in previous generations and the interview explains what it means to be wealthy, why this should be your goal and how to get there.

Wealth are the assets that earn while you sleep.

Wealth buys your freedom.

What most people do is play status games and assume they will make more in the future.

It's our natural tendency to try and appear high status because in hunter gatherer society, without the ability to store assets, status was the best predictor of survival.

Today, status games are a losing strategy.

They are a losing strategy because you become an unhappy and angry person if you're constantly searching for ways to increase your status at the expense of others.

Wealth creation on the other hand is a positive sum game.

You becoming wealthy doesn't take away from someone else's ability to do the same.

The wealth formula.

[Accountability X Judgement X Knowledge X Societialvalue]^Persistence

Put another way:

Individual wealth is equal to how singularly accountable you are for an outcome, times, how often your judgement is correct, times, the distinctiveness of your specific knowledge, times,how much society values your outcome, compounded by your level of persistence in improvement.

YOU need to get PAID at SCALE.

YOU - Represents your uniqueness, and accountability.

PAID - Represents your specific knowledge and judgement.

SCALE - Represents the leverage you're able to deploy.

Uniqueness and authenticity are important because it's the best way to differentiate against competition, no one's story is the same as yours. These traits also help you create luck in your life by attracting opportunities.

Accountability is funadmental to any high functioning team or individual. It means you keep promises to yourself and others. This will increase your self esteem and allow you to take rationally optimistic risks with large potential upside.

Specific knowledge is found by exploring your genuine curiosity. Find intelligent people to work with who have high energy, high integrity and are playing long term games.

Accelerate this process and the level of your judgement by increasing iterations of your experiments and optimize for small failures (learning opportunities).

Lastly, you MUST be able to deploy leverage.

It's impossible to become wealthy by only renting out your time.

This means finding a career where your inputs don't match your outputs and acquiring equity in something. This could be your own business, shares or options in the company you work for, or purchasing equity in other companies.

Money is the oldest form of leverage (aside from labour). Earning money at your job and buying equity in other businesses is a great strategy to get a taste of leverage.

To do this at scale, you first need to create leverage for yourself and your income. Do that by taking advantage of the two modern forms of leverage and scale.

  1. Media
  2. Code

The most traditional form of leverage that everyone understands is labour but it's also the most inefficient.

Your parents might be impressed by the amount of people you manage but if you don't own a piece of the pie it's getting you no closer to creating wealth for yourself.

Creating media content (writing, audio, video, etc.) does, however, allow you to acquire leverage more efficiently because there is zero marginal cost (doesn't cost you any more for the 1 millionth person to watch your video or read your blog than the first person. This is exactly why you hear about millionaire Youtuber's, they have scale and leverage built into how they earn)

The other way to acquire leverage is developing a software program or script that can solve problems for people 24 hours a day.

In an age of nearly infinite leverage your first job is to move fast and obtain leverage. Once you have the leverage now you want to slow down because your judgement really matters. Everything else you do is set up for you to deploy your leverage. Whether that be raising capital, hiring or deciding what to focus on.

If you're starting a business, make sure you consider whether you're taking advantage of the microeconomic concepts including; scale economies, marginal cost, and network effects (each additional member adds value to the group)

If you're joining a business optimize for the best alumni network.

"Remember, money will only solve your money problems. You should also spend time developing a calm mind, a fit body and a house full of love - these things cannot be bought, they must be earned." - Naval