5 min read
“The three big ones in life are wealth, health, and happiness. We pursue them in that order but their importance is in the reverse.” -Naval Ravikant
One of my favorite thinkers is Naval Ravikant, the CEO of AngelList. I love following Naval on Twitter because he regularly tweets his thoughts on philosophy, status, happiness, and wealth. In fact, his most viral tweetstorm of all time is his pinned tweet on how to get rich without getting lucky.
Recently Naval compiled a list of videos to expand on this tweetstorm and to share his in-depth thoughts on how he thinks anyone can get rich. Here are my favorite ideas from these videos:
Seek wealth, not money or status
Wealth is having assets that earn money while you sleep: businesses, products, media, robots, investments, land. Wealth is for freedom, not conspicuous consumption.
Money is how we transfer wealth; it’s the social credits and debits of other people’s time. Money isn’t going to solve all your problems, but it’s going to solve your money problems.
Status is your rank in a social hierarchy like politics or sports. It’s a zero-sum game: to be a winner, there must be a loser. Status is an old game that predicted survival in the hunter-gatherer days, before we had technologies for creating wealth. People creating wealth will always be attacked by people still playing status games.
“The reason you want wealth is because it buys you your freedom. So, you don’t have to wear a tie like a collar around your neck. So, you don’t have to wake up at 7:00 AM, and rush to work, and sit in commute traffic. So, you don’t have to waste away your entire life grinding all the productive hours away into a soulless job that doesn’t fulfill you.
So, the purpose of wealth is freedom. It’s nothing more than that. It’s not to buy fur coats, or drive Ferraris, or sale yachts, or jet around the world in your Gulfstream. That stuff gets really boring, and really stupid really fast. It’s really just so that you are your own sovereign individual.”
Making money isn’t about luck
Making money isn’t about luck. It’s about becoming the kind of person who makes money. If you lost all your money, you should be able to recreate that wealth.
“I like to think that if I lost all my money and if you drop me on a random street in any English-speaking country, within 5, 10 years I’d be wealthy again, because it’s just a skill set that I’ve developed and I think anyone can develop. In 1,000 parallel universes, you want to be wealthy in 999 of them. You don’t want to be wealthy in the 50 of them where you got lucky. So, we want to factor luck out of it.”
There are 4 kinds of luck: (1) Blind luck, (2) Luck from hustling, (3) Luck from preparation, (4) Luck that comes from your unique character.
That fourth kind of luck is within your control. In fact, it’s almost not even luck. Build your character in a way so luck stops being luck, and starts becoming your destiny. Build your character so opportunity finds you because you’re a trusted, reliable, high-integrity, long-term dealmaker.
You won’t get rich renting your time
You won’t get rich renting out your time, because your inputs are too closely tied to your outputs. You’re not earning while you’re sleeping.
Renting out your time means someone else will get the wealth from your time. They’re going to pay you the bare minimum to do your job. Renting out your time also mean you’re replaceable and not as creative as you could be. So you must own equity to gain your financial freedom.
“The most dangerous things are heroin, and a monthly salary.” – Nassim Taleb
“In almost any salaried job, even at one that’s paying a lot per hour like a lawyer, or a doctor, you’re still putting in the hours, and every hour you get paid. So, what that means is when you’re sleeping, you’re not earning. When you’re retired, you’re not earning. When you’re on vacation, you’re not earning. And you can’t earn non-linearly.”
People who become wealthy typically own a piece of a product or business – this includes creating your own product or business or simply buying stocks in other product or businesses.
Live below your means for freedom
People living far below their means enjoy a freedom that people upgrading their lifestyles just can’t fathom.
Upgrading your lifestyle too quickly will keep you in a perpetual wage slave trap.
The internet has massively broadened career possibilities
The Internet has massively broadened the possible space of careers, by allowing you to scale any niche obsession. Before the Internet there was no way to find all the people in the world who were interested in your obsession. Now you can.
Escape competition through authenticity—when you’re competing with people it’s because you’re copying them. No one can compete with you on being you. Before the Internet, this was useless advice—now it’s a career.
The internet connects every human to every other human on the planet. This means you can find your audience for your product, or your talent, and skill no matter how far away they are.
“So, what the internet does is allows any niche obsession, which could be just the weirdest thing. It could be like people who collect snakes, to like people who like to ride hot air balloons, to people who like to sail around the world by themselves, just one person on a craft, or someone who’s obsessed with miniature cooking. Like, there’s this whole Japanese miniature cooking phenomenon. Or there’s a show about a woman who goes in people’s houses, and tidies it up, right?
So, whatever niche obsession you have, the internet allows you to scale. Now that’s not to say that what you build will be the next Facebook, or reach billions of users, but if you just want to reach 50,000 passionate people like you, there’s an audience out there for you.”
“You can go out on the internet, and you can find your audience. And you can build a business, and create a product, and build wealth, and make people happy just uniquely expressing yourself through the internet.”
Develop Specific Knowledge
Develop specific knowledge in some area so that you can set yourself apart from everyone else in the market.
“The classic example of specific knowledge is investing. But it could be anything from judgment in running a fleet of trucks to weather forecasting.”
Specific knowledge can be learned by pursuing your genuine curiosity, talents and passion. Build specific knowledge where you are a natural.
“Everyone is a natural at something. And then there are probably multiple things you’re natural at because personalities and humans are very complex. So, we want to be able to take the things that you are natural at and combine them so that you automatically, just through sheer interest and enjoyment, end up top 25% or top 10% or top 5% at a number of things.”
Learn to sell, learn to build – you’ll be unstoppable
Learn to sell, learn to build. If you can do both, you will be unstoppable.
Selling is anything from one-on-one sales to marketing, recruiting, fundraising, PR, and more.
Building is anything from engineering to design, manufacturing, logistics, procurement, operations, and more.
If you can build and sell products/services, you will be able to ramp up your income quicker than most.
Zach is the author behind Four Pillar Freedom, a blog that teaches you how to build wealth and gain freedom in life.
Zach's favorite free financial tool he's been using since 2015 to manage his net worth is Personal Capital. Each month he uses their free Investment Checkup tool and Retirement Planner to track his investments and ensure that he's on the fast track to financial freedom.
Although the bulk of his net worth is invested in index funds, his favorite place to invest in individual stocks is M1 Finance, a site that allows you to build a custom portfolio of stocks for free.
His favorite way to save money each month on his recurring bills is by using Trim, a free financial app that negotiates lower cable, internet, and phone bills with any provider on your behalf.
His favorite place to find new personal finance articles to read is Collecting Wisdom, a site that collects the best personal finance articles floating around the web on a daily basis.
Full Disclosure: Nothing on this site should ever be considered to be advice, research or an invitation to buy or sell any securities, please see my Terms & Conditions page for a full disclaimer.