The Almanack of Naval Ravikant — Book Summary & Notes [TMP #80]
A story by quotes.
A deeper dive into the Twitter thread How to Get Rich (without getting lucky) by Naval Ravikant— investor, entrepreneur and co-founder of AngelList, The Almanack of Naval Ravikant by Eric Jorgenson is divided into two parts, Part I: Wealth and Part II: Happiness. Closer to Part II, it takes the format of an interview so a question and an answer.
Part I read very much like the main claim was made and then defended afterwards. If you do decide to read this book, you should every section within each part else you’ll miss an important bit that makes the case complete.
And about reading all sections, I skimmed through Part II: Happiness and left almost all sections untouched (lol) because this was not where I wanted to learn about happiness or philosophy. That simple. Now, let’s get it. 🚀
Short Take
I love it when a book changes how I think about something, hopefully for the better. Why did I read this book? I wanted to understand wealth creation and its relationship with employment.
Never mind that I worried a great (and unnecessary) deal about doing what I am interested in for market reasons, I got what I wanted and more. That is to say, it’s an insightful book. Now, I’m more convinced to start Economics with Adam Smith because ‘high-quality foundations’ 🤷🏾♀️. Think of this summary as a story through selected quotes.
The Principal Thing
If I forgot everything I learned on reading this book, I wouldn’t forget this: the best place to be in your work life is at the intersection of your genuine interests and what you’re good at. That intersection is the place of specific knowledge and from which you build leverage. And leverage, you guys, is the ticket to build wealth. That’s it.
Why, how come? Because we’re better off laying the foundation of a decades-long career on something we actually care about and see ourselves staying interested in for a long enough while. This way, it’s not a pain to drill in to become good, excellent, at it. Pretty much an underlying element of the phrase “work that feels like play”.
How does that tie into creating wealth? In Naval’s words:
“Society always wants new things. And if you want to be wealthy, you want to figure out which one of those you can provide for society that it does not yet know how to get but it will want and providing it is natural to you, within your skill set, and within your capabilities.”
But of course, nothing about ‘specific knowledge’ or building ‘leverage’ is as simple as it sounds. That’s when we get to the interesting part.
On Specific Knowledge
“The specific knowledge is sort of this weird combination of unique traits from your DNA, your unique upbringing, and your response to it. It’s almost baked into your personality and your identity. Then you can hone it. No one can compete with you on being you…. It [specific knowledge] is found much more by pursuing your genuine curiosity and your passion. It’s not by going to school for whatever is the hottest job; it’s not by going into whatever field investors say is the hottest.”
Okay, what do I get from that? Specific knowledge, the schmick-bang ‘something’ = technical ability1 + personality strength, whether that’s business intuition, sales charm, teaching ease or whatever.
Note to self:
“Escape competition through authenticity. If you are fundamentally building and marketing something that is an extension of who you are, no one can compete with you on that. The best jobs are neither decreed nor degreed. They are creative expressions of continuous learners in free markets.”
The culmination?
“Think about a product or service society wants but does not yet know how to get. You want to become the person who delivers it and delivers it at scale. That is really the challenge of how to make money.”
And “when it comes to reading, make sure the foundation is very, very high quality”.
Building Leverage
Off the bat,
Compound interest
“All the returns in life, whether in wealth, relationships, or knowledge, come from compound interest.” Play long-term games with long-term people because ‘when you find the right thing to do [and] the right people to work with, invest deeply’. In the intellectual domain, darling, compound interest rules.
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Build judgement and then credibility around your judgement.
You cannot escape hard work to build judgement or reliability. And then, remember that inputs don’t match outputs for leveraged workers. Just look at Warren Buffet: “He’s been right over and over in the public domain. Nobody asks him how hard he works […] when he wakes up or when he goes to sleep. They’re like ‘Warren, just do your thing.’”
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Two games. The money game or the status game.
The response to status games? “Play stupid games, win stupid prizes.”
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Avoid ruin
Avoid jail, keep your health, and don’t gamble all at once. Regarding values and business, “sharks eat well but live a life surrounded by sharks”.
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After all is said and done, you create wealth by owing a (part of a) business. It's either you build a business or buy equity (stocks) in a business.
“People seem to think you can create wealth—make money through work. It’s probably not going to work. There are many reasons for that. Without ownership, your inputs are very closely tied to your outputs. […] You have to work up to the point where you can own equity in a business. You could own equity as a small shareholder where you bought stock. You could also own it as an owner where you started the company. Ownership is really important.”
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On working hard but by James Clear
“Work hard.
If results depend on effort, then you will carry yourself far.
If results depend on effort and luck, then you will have done what you can to influence the outcome.
And if results depend on luck alone, then the outcome is random, but you will have won the battle with yourself.”
That’s all, folks :)
If technical, there’s a whole range; if artistic, there’s a whole range as well.