Book Notes #011 - The Almanack of Naval Ravikant by Eric Jorgenson

Rating: 5/5 ⭐️ (Must Read)

  • Main Ideas - Great.

  • Stories & Examples - Great.

  • Engagement - Great.

"Desire is a contract you make with yourself to be unhappy until you get what you want."

- Naval Ravikant


THE BOOK IN 10 SECONDS


Naval Ravikant is an entrepreneur, philosopher, and investor, this book is a collection of Naval's wisdom and experience from the last ten years.


Building wealth and being happy are skills that you can learn, this book teaches you how to do that.


MAIN TAKEAWAYS


PART I: BUILDING WEALTH


1) UNDERSTAND HOW WEALTH IS CREATED.


"Making money is not a thing you do– it's a skill you learn"


The first step to building wealth is to understand that building wealth is a skill.

It's just another "game". Don't get mad at the players, learn to play the game.


If you secretly despise wealth, you will never take the time to learn about how to create it.


  • "Seek wealth, not money or status. Wealth is having assets that earn while you sleep. Money is how we transfer time and wealth."


  • "Own Equity–a piece of a business– to gain your financial freedom.”


  • “You are not going to get rich renting out your time."


2) FIND AND BUILD SPECIFIC KNOWLEDGE.


"You will get rich by giving society what it wants but does not yet know how to get. At scale."


Society always wants new things.


They want their problems to be solved... The question is, what problems can you help solved?


The most important skill for getting rich is becoming a perpetual learner. You have to learn how to learn anything you want to learn.


Leverage, Accountability & Credibility: To get rich, you need leverage. Leverage comes in labour, capital, code or media.


  • For labour somebody needs to follow you.

  • For capital, someone has to give you money, assets to manage or machines.

  • To get these things you have to build credibility, and you have to do it under your own name as much as possible, which is risky.

  • Without accountability, you can't build credibility. But you take on risk, risk of failure and humiliation. Risk failure under your own name. The people that have the ability to fail in public under their own names gain power.


Specific Knowledge & Capabilities (skills you can learn and master by practicing them for 10,000 hrs): Sales, marketing, music talents, science, writing, etc.

  • What's a craft you can commit yourself to studying, practicing and continue to improve? Pursue your interests, passions and innate personality. What is an external outlet that allows you to create or build new things?


3) BUILD OR BUY EQUITY IN A BUSINESS


"If you don't own a piece of a business, you don't have a path towards financial freedom"


Ownership vs Hourly Work


Without ownership, your inputs are very closely tied to your outputs. If you are sleeping, you are not earning. When you are not working–exchanging your time–you are not earning.


You want to own equity. You want to earn without trading your time.


Entrepreneurship & Investing


  • You can either buy equity by investing.


  • Or you can create it through entrepreneurship.


4) LEVERAGE.


"Forget rich vs poor... it's now leverage vs un-leveraged."


Think about what product or service society wants but does not yet know how to get. You want to become the person who delivers it at scale.


That is really the challenge of how to make money and it may take up to five to ten years to accomplish.


Types of leverage;


  • Labour: Other humans working for you. Skills needed: Managing people, operations, leadership skills, etc.


  • Money: Every time you make a decision, you multiply it with money. Skills needed: Managing capital, Investing, raising money, etc.


  • Media: Books, media, movies and code. Products that have no marginal cost of replication. (Streaming, podcast, online books, online courses etc.). Skills needed: Managing talent: Creating new things, promoting talent, selling ideas, etc.


5) FIND A POSITION OF LEVERAGE.


"You need to be able to sell or build...If you don't do either, learn."


  • Build: Building the product. It can include design, development, manufacturing, logistics, and operations or offering a service.


  • Sell: It includes marketing, communicating, recruiting, distribution, raising money, inspiring people, and PR.


Learn to sell, or learn to build. If you can do both, you will be unstoppable.


6) GET PAID FOR YOUR JUDGMENT.


"Earn with your mind, not your time."


Move up on the accountability ladder.


  • Real State Developer: Paid buys create more value. Takes higher risk (buying an old house), hires multiple contractors to raise the value, and learns how to sell higher assets.


  • A general contractor paid per project like working on a house for the owner. - $50,000.

  • Hourly labour worker paid by the hr. $10-20 per hr.


The developer takes on more risk, more accountability, has more leverage, and needs to have more specific knowledge.


They need to understand fundraising, city regulations, where the real state market is headed, and whether they should take the risk or not. It's a much more difficult skill to learn.


PART II: HAPPINESS

7) LEARN HAPPINESS.


"Happiness is being satisfied with what you have. Success comes from dissatisfaction. Choose"


Get you are young, you have time. You have health, but you have no money. When you are middle-aged, you have money and you have health but you have no time. When you are old you have money and you have time, but you have no health.


Trying to get all three at any stage of your life. That's the goal.


8) HAPPINESS IS BUILT BY HABITS.


"Happiness and peace are skills"


Go through life replacing your bad habits with better ones. Learn to build better habits, that's the secret.


"Doctors won't make you healthy, nutritionists won't make you slim, teachers won't make you smart, mentors won't make you rich, trainers won't make you fit.

Ultimately, you have to take responsibility... Choose to save yourself."


  • Mediation.

  • Sun exposure.

  • Exercise.

  • Diet.


Pick one. Start by fixing that one habit and then fix another one. This process will bring happiness and peace into your life.


Wisdom comes from understanding the long-term consequences of your actions.



FAVORITE QUOTES


  • "There are lots of miserable "successful' people out there. Be careful modelling those..." - Tim Ferris


  • "Tweets, podcasts, and interviews quickly get buried and lost. Knowledge this valuable deserves a more permanent, accessible format." - Eric Jorgenson


  • "Getting rich is about knowing what to do, who to do it with, and when to do it." - Naval Ravikant


  • "If you can't code, write books and blogs, record videos and podcasts." - Naval Ravikant



ACTION STEPS

  1. Understand how wealth is created and that wealth is a skill.

  2. Find and build specific knowledge. Let your natural interest guide you through a craft you can become obsessed about. Practice it for a long period of time until you become really good at what you do.

  3. Build or buy equity. If you want to buy it, invest. If you want to create it, start a business.

  4. Types of leverage: Labour, Capital & Media.

  5. Find a position of leverage. Build products or learn how to sell them. Or better, do both.