how to get rich - naval

Seek Wealth, Not Money or Status

  • Wealth is assets that earn while you sleep
  • Wealth buys your freedom
  • Money is how we transfer wealth
  • Status is your rank in the social hierarchy
  • Status is a very old game
  • People creating wealth will always be attacked by people playing status games

Make Abundance for the World

  • Ethical wealth creation makes abundance for the world
  • Everyone can be rich

Free Markets Are Intrinsic to Humans

  • Free markets are intrinsic to the human species
  • Too many takers and not enough makers will plunge a society into ruin

Making Money Isn’t About Luck

  • Making money isn’t about luck
  • 4 Kinds of Luck:
    • 1. Blind luck
    • 2. Luck from hustling
    • 3. Luck from preparation
    • 4. Luck from your unique character
  • In 1,000 parallel universes, you want to be wealthy in 999 of them
  • Wealth stacks up one chip at a time, not all at once

Make Luck Your Destiny

  • Build your character so opportunity finds you
  • You have to be a little eccentric to be out on the frontier by yourself

You Won’t Get Rich Renting Out Your Time

  • You won’t get rich renting out your time
  • Renting out your time means you’re essentially replaceable
  • You must own equity to gain your financial freedom

Live Below Your Means for Freedom

  • People living below their means have freedom
  • The most dangerous things are heroin and a monthly salary
  • Ideally, you’ll make your money in discrete lumps

Give Society What It Doesn’t Know How to Get

  • Give society what it wants, but doesn’t know how to get—at scale
  • Figure out what product you can provide and then figure out how to scale it

The Internet Has Massively Broadened Career Possibilities

  • The Internet has massively broadened the possible space of careers
  • The Internet allows you to scale any niche obsession
  • Escape competition through authenticity

Play Long-term Games With Long-term People

  • Play long-term games with long-term people
  • When you switch industries, you’re starting over from scratch
  • Long-term players make each other rich
  • Returns come from compound interest in iterated games

Pick Partners With Intelligence, Energy and Integrity

  • Pick business partners with high intelligence, energy and integrity
  • Motivation has to come intrinsically
  • Integrity is what someone does, despite what they say they do

Partner With Rational Optimists

  • Don’t partner with pessimists
  • Partner with rational optimists
  • We’re descended from pessimists
  • BOCTAOE

Arm Yourself With Specific Knowledge

  • Arm yourself with specific knowledge
  • Specific knowledge can’t be trained
  • Specific knowledge is found by pursuing your curiosity
  • Building specific knowledge will feel like play to you

Specific Knowledge Is Highly Creative or Technical

  • Specific knowledge can be taught through apprenticeships
  • Specific knowledge is often highly creative or technical
  • Specific knowledge is specific to the individual and situation
  • You can’t be too deliberate about assembling specific knowledge
  • Build specific knowledge where you are a natural

Learn to Sell, Learn to Build

  • Learn to sell, learn to build
  • The Silicon Valley model is a builder and seller
  • If you can do both you will be unstoppable
  • I’d rather teach an engineer marketing than a marketer engineering
Read What You Love Until You Love to Read
  • Read what you love until you love to read
  • Read the original scientific books in a field
  • Don’t fear any book
  • The means of learning are abundant, the desire to learn is scarce

The Foundations Are Math and Logic

  • The ultimate foundations are math and logic
  • It’s better to read a great book really slowly than to fly through a hundred books quickly
  • Learn persuasion and programming

There’s No Actual Skill Called “Business”

  • There’s no actual skill called “business”
  • Doing is faster than watching
  • The number of “doing” iterations drives the learning curve
  • If you’re willing to bleed a little every day, you may win big later

Embrace Accountability to Get Leverage

  • You have to have accountability to get leverage
  • Take business risks under your own name
  • A well-functioning team has clear accountability for each position
  • People who can fail in public have a lot of power

Take Accountability to Earn Equity

  • Accountability is how you’re going to get equity
  • Taking accountability is like taking equity in all your work
  • Accountability is reputational skin in the game

Labor and Capital Are Old Leverage

  • Our brains aren’t evolved to comprehend new forms of leverage
  • Society overvalues labor leverage
  • You want the minimum amount of labor that allows you to use the other forms of leverage
  • Capital has been the dominant form of leverage in the last century
  • You need specific knowledge and accountability to obtain capital

Product and Media are New Leverage

  • Product and media are the new leverage
  • Product leverage is where the new fortunes are made
  • Combining all three forms of leverage is a magic combination
  • Product and media leverage are permissionless
  • The robot army is already here—code lets you tell them what to do

Product Leverage is Egalitarian

  • Product leverage is a positive sum game
  • Status goods are limited to a few people
  • The best products tend to be targeted at the middle class
  • Creating wealth with product leads to more ethical wealth
  • You want to use the product that is used by the most people
  • Capital and labor are becoming permissionless

Pick a Business Model With Leverage

  • Scale economies: the more you produce, the cheaper it gets
  • Zero marginal cost of reproduction: producing more is free
  • Network effect businesses are natural monopolies
  • In a network effect, each new user adds value to the existing users
  • Zero marginal cost businesses can pivot into network effect businesses

Example: From Laborer to Entrepreneur

  • Laborers get paid hourly and have low accountability
  • General contractors get equity, but they’re also taking risk
  • Property developers pocket the profit by applying capital leverage
  • Architects, large developers and REITs are even higher in the stack
  • Real estate tech companies apply the maximum leverage

Judgment Is the Decisive Skill

  • In an age of infinite leverage, judgment becomes the most important skill
  • Everything else you do is setting you up to apply judgment
  • Judgment is knowing the long-term consequences of your actions
  • Without experience, judgment is often less than useless
  • The people with the best judgment are among the least emotional
  • A lot of the top investors often sound like philosophers
  • The more outraged someone is, the worse their judgment

Set an Aspirational Hourly Rate

  • Set and enforce an aspirational hourly rate
  • You can’t penny pinch your way to wealth
  • My aspirational rate was $5,000/hr
  • If you can outsource something for less than your hourly rate, do it
  • Your hourly rate should seem absurdly high

Work As Hard As You Can

  • Work as hard as you can
  • What you work on and who you work with are more important
  • Nobody really works 80 hours a week
  • Inspiration is perishable
  • Impatience with actions, patience with results

Be Too Busy to “Do Coffee”

  • Be too busy to “do coffee” while keeping an uncluttered calendar
  • People will meet with you when you have proof of work
  • Networking is overrated even early in your career

Keep Redefining What You Do

  • Keep redefining what you do until you’re the best at what you do
  • Find founder-product-market fit

Escape Competition Through Authenticity

  • Competition will trap you in a lesser game
  • No one can compete with you on being you
  • In entrepreneurship, the masses are never right
  • Combine your vocation and avocation

Play Stupid Games, Win Stupid Prizes

  • Businesses that seem like they’re in direct competition really aren’t
  • My first company got caught up in the wrong game

Eventually You Will Get What You Deserve

  • On a long enough time scale you will get paid
  • What are you really good at that the market values?

Reject Most Advice

  • The best founders listen to everyone but make up their own mind
  • Advice is maxims you can recall later, when you get your own experience

A Calm Mind, a Fit Body, a House Full of Love

  • When you’re wealthy, you’ll realize it wasn’t what you were seeking
  • A calm mind, a fit body and a house full of love must be earned
  • Practical advice for a calmer internal state
  • A lot of divorces happen over money, a lot of battles happen over internal anger

There Are No Get Rich Quick Schemes

  • There are no get rich quick schemes
  • We don’t have ads because it would ruin our credibility
  • Anyone giving advice on how to get rich should have made their money elsewhere

Productize Yourself

  • Figure out what you’re uniquely good at and apply as much leverage as possible
  • Find hobbies that make you rich, fit and creative
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On this page
Seek Wealth, Not Money or Status
Make Abundance for the World
Free Markets Are Intrinsic to Humans
Making Money Isn’t About Luck
Make Luck Your Destiny
You Won’t Get Rich Renting Out Your Time
Live Below Your Means for Freedom
Give Society What It Doesn’t Know How to Get
The Internet Has Massively Broadened Career Possibilities
Play Long-term Games With Long-term People
Pick Partners With Intelligence, Energy and Integrity
Partner With Rational Optimists
Arm Yourself With Specific Knowledge
Specific Knowledge Is Highly Creative or Technical
Learn to Sell, Learn to Build
The Foundations Are Math and Logic
There’s No Actual Skill Called “Business”
Embrace Accountability to Get Leverage
Take Accountability to Earn Equity
Labor and Capital Are Old Leverage
Product and Media are New Leverage
Product Leverage is Egalitarian
Pick a Business Model With Leverage
Example: From Laborer to Entrepreneur
Judgment Is the Decisive Skill
Set an Aspirational Hourly Rate
Work As Hard As You Can
Be Too Busy to “Do Coffee”
Keep Redefining What You Do
Escape Competition Through Authenticity
Play Stupid Games, Win Stupid Prizes
Eventually You Will Get What You Deserve
Reject Most Advice
A Calm Mind, a Fit Body, a House Full of Love
There Are No Get Rich Quick Schemes
Productize Yourself