The Almanack Of Naval Ravikant
By Eric Jorgenson
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Foreword
I have been following Naval on Twitter for quite a while. It started when I first read his thread “How to Get Rich (Without Being Lucky)” which went viral and is very popular on Money Twitter. That thread has been discussed in the book too. The book was written incredibly. You can pick any page and start reading from there. The book was written using a lot of Naval’s podcasts and tweets, so, the language is the same as what Naval said or wrote (Except for some places where it is paraphrased for better understandability). So, I have tried to keep it the same too so that things don’t get lost in translation. And in case I would like to write my point of view on something I would write in italics. Also, the book is free to read! You can go and download the whole pdf or ebook on the site completely free.
Visit their site:
The book is heavily based on interpretation. So, do that carefully.
Summary
If you have at least one person that loves you unconditionally, it'll do wonders for your self-esteem.
I've learned a few things and some principles. I try to lay them out in a timeless manner, where you can figure it out for yourself. Because at the end of the day, I can't teach you anything. I can only inspire you and maybe give you a few hooks so you can remember.
Wealth
This is the tweet thread that went viral. It’s a very interesting thread. Give it a read!
Money is how we transfer wealth. Money is social credit. You work for someone and create some value. You get money. Wealth is the thing you want. Wealth is assets that earn while you sleep. Wealth is a computer program that's running at night, serving other customers. Wealth is even the money in the bank that is being reinvested into other assets and other businesses. Society will pay you for creating things it wants. But Society doesn't yet know how to create those things because if it did they wouldn't need you.
Danny Hillis said technology is a set of things that don't quite work yet. Once something works it's no longer technology. Society always wants new things. And if you want to be wealthy you want to figure out which one of those things can you provide for the society that it doesn't yet know how to get but it will want and providing it is natural to you, within your skill set, and within your capabilities.
Oil, for example, was once a technology but not now. Cars, TV, WiFi, shoes, watches, everything was a technology once. Now they are so common that it is not seen as technology. Smart glasses, Neuralink, etc are still technology. Once they become pretty common, no one will think of them as technology anymore.
Specific knowledge cannot be taught, but it can be learned.
Specific knowledge is something you are naturally good in. It's a sort of weird combination of unique traits from your DNA, your unique upbringing and response to it. But you can improve these things. You are natural in it but others find it as work.
No one can compete with you on being you.
Most of life is a search for who and what needs you the most If you are not hundred per cent into it. Someone who is, will out perform you. And not by a little bit but by a lot. Escape competition through authenticity. When you are competing with people it is because you are copying them. It's because you are trying to do the same thing. But every human is different. Don't copy.
For example, my specific knowledge can be writing creative and comedic content. This is something which interests me and I am good at. Pursuing something at which you are naturally good gives you an unfair advantage over others. It allows you to do things which you enjoy doing but others feel like a task. A person who is enjoying doing something will have a better outcome than someone who is doing the same task but feels like it is work.
Compounding
Compounding interest is a powerful concept. It applies to more than just Compounding capital. Compounding capital is just the beginning. Compounding in business relationships is very important. Compounding interest also happens in your reputation. If you have a sterling reputation and keep building it for decades upon decades, people will notice. Your reputation will literally end up being thousands or tens of thousands of times more valuable than somebody else who was very talented but is not keeping the compound interest in reputation going.
When you find the right thing to do, when you find the right people to work with, invest deeply. Sticking with it for decades is really how you make the big returns in your relationship and in your money. So compound interest is very important.
Accountability is a double-edged thing. It allows you to take credit when things go well and best the brunt of the failure when things go badly. Clear Accountability is important. Without accountability you don't get incentives, you can't build credibility. But you take risks. You risk failure. You risk humiliation. You risk failure under your own name.
If you don't own a piece of a business, you don't have a path towards financial freedom.
True wealth comes from owning equity not working hours. Even if your salary is high you are not earning if you don't work. You need to invest, or own a business so that you can earn even in your sleep or while on a vacation.
This is explained further with more clarity.
If it entertains you now but will bore you someday, it's a distraction. Keep looking.
The less you want something, the less you're thinking about it, the less you're obsessing over it, the more you're going to do it in a natural way. The more you're going to do it for yourself. You're going to do it in a way you're good at, and you are going to stick with it. The people around you will see the quality of your work is higher. Do things just for their own sake.
Think about what product or service society wants but does yet know how to get. You want to become the person who delivers it and delivers it at scale. That is to take the challenge of how to make money.
If they can train you to do it, then eventually they will train a computer to do it.
Personally, this quote is very interesting. And it’s true too. Earlier there were manual laborers for things, later on, there were machines. The laborers were laid off. If you are into tech you might have heard about Dall-E 2, an AI which can create realistic photos just from a text you give it.
Leverages
Three broad classes of leverage:
One form of leverage is labor: It is the worst form of leverage. It is also the oldest form of leverage. Needs tremendous leadership skills. You're one short hop from a mutiny or getting eaten or torn apart by the mob.
Money is good as a form of leverage: It means every time you make a decision, you multiply it with money.
Products with no marginal cost of replication: this includes books, media, movies and code. Code is probably the most form of permissionless leverage. All you need is a computer- you don't need anyone's permission.
Forget rich versus poor, white-collar versus blue. It's now leveraged versus un-leveraged.
The most interesting and the most impressive form of leverage is the idea of Products that have no marginal cost of replication. This was invented in last few hundred years. It started with printing press. It accelerated with broadcast media, and now it's really blown up with the internet and with coding.
You're never going to get rich renting out your time.
Whenever you can in life, optimize for independence rather than pay. If you have independence and you're accountable for your output, as opposed to your input - that's the dream of a worker, you want to be as leveraged as possible so you have a huge impact without as much time or physical effort. A leveraged worker can out-produce a non-leveraged worker by a factor of one thousand or ten thousand. With a leveraged worker, judgment is far more important than how much time they put in or how hard they work. What you want in your life is to be in control of your time. You want to get into a leveraged job where you control your own time and you're tracked on the outputs. If you do something incredible to move the needle in the business, they have to pay you. Especially if they don't know how you did it because it's innate to your obsession or your skill or your innate abilities they're going to have to keep paying you to do it. If you have specific knowledge, you have accountability and you have leverage; they have to pay you what you're worth.
If you want to be part of a great tech company, then you need to be able to SELL or BUILD. If you don't do either, learn.
Can you expand on your statement, "If you secretly despise wealth, it will elude you"? If you get into a relative mindset, you're always going to hate people who do better than you, you're always going to be jealous or envious of them. They'll sense those feelings when you try and do business with somebody, if you have any bad thoughts or any judgments about them, they will feel it. You have to get out of a relative mindset. Literally, being anti-wealth will prevent you from becoming wealthy, because you will not have the right mindset for it, you won't have the right spirit, and you won't have the right spirit, and you won't be dealing with people on the right level. Be optimistic, be positive. It's important. Optimists actually do better in the long run. Money is not going to solve all your problems but it's going to solve all your money problems. People realize that, so they want to make money. But at the same time, many of them, deep down, believe they can't make money. They don't want any wealth creation to happen. So, they keep saying, "Well, making money is evil. You shouldn't do it. "But they're actually playing the other game, which is the status game. They're trying to be high status in the eyes of the other people watching by saying, "Well, I don't need money. We don't want money." Status is your ranking in social hierarchy.
What is the best thing to do for younger people starting out?
Spend more time making the big decisions. There are basically three really big decisions you make in your early life: where you live, who you're with, and what you do. These are highly dominating decisions. Those three decisions really matter.
What are one or two steps you'd take to surround yourself with successful people?
Figure out what you're good at, and start helping other people with it. Give it away. Pay it forward. Karma works because people are consistent. On a long enough timescale, you will attract what you project. But don't measure --- your patience will run out if you count.
What is your definition of retirement?
Retirement is when you stop sacrificing today for an imaginary tomorrow. When today is complete, in and of itself, you're retired.
How do you get there?
One way is to have so much money saved that your passive income covers your burn rate. A second is you just drive your burn rate to zero --- you become a monk. A third is you're doing something you love. You enjoy it so much, it's not about the money.
You have to do hard things anyway to create your own meaning in life. Making money is a fine thing to choose. Go struggle. It's hard. I'm not going to say it's easy. It's really hard, but the tools are all available. It's all out there. Money buys you freedom in the material world. It's not going to make you happy, it's not going to solve your health problems, it's not going to make your family great, it's not going to make you fit, it's not going to make you calm. But it will solve a lot of external problems. It's a reasonable step to go ahead and make money.
There's no shortcut to smart.
It's only after you're bored you have the great ideas. It's never going to be when you're stressed, or busy, running around or rushed. Make the time.
Very smart people tend to be weird since they insist on thinking everything through for themselves.
During decision-making, the brain is a memory prediction machine. A lousy way to do memory prediction is "X happened in the past, therefore X will happen in the future.'' It's too based on specific circumstances. What you want is principles. You want mental models. The best mental models I have found came through evolution, game theory, and Charlie Munger. Charlie Munger is Warren Buffet's partner. Very good investor. He has tons and tons of great mental models. Author and trader Nassim Taleb has great mental models. I basically load my head full of mental models.
I use my tweets and other people's tweets as maxims that help compress my own learnings and recall them. The brain space is finite - you have finite neurons - so you can always think of these pointers, addresses, or mnemonics to help you remember deep-seated principles where you have the underlying experience to back it up.
I don't believe I have the ability to say what is going to work. Rather, I try to eliminate what's not going to work. I think being successful is just about not making mistakes. It's not about having correct judgment. It's about avoiding incorrect judgments.
If they wrote it to make money, don't read it.
This is in reference to a book. If someone wrote a book just to make money. Don’t read the book. Because the book won’t add any value
The three big ones in life are wealth, health, and happiness. We pursue in that order, but their importance is reverse.
Don't take yourself so seriously. You're just a monkey with a plan.
Happiness
Yes, having money helps, but it's actually a very small piece of it. Most of it comes from learning over the years that my own happiness is the most important thing to me, and I've cultivated it with a lot of techniques.
Maybe happiness is not something you inherit or even choose, but a highly personal skill that can be learned like fitness or nutrition.
We are highly judgemental survival and replication machines. We constantly walk around thinking, "I need this," or "I need that," trapped in an off desires. Happiness is the state when birthing is missing. When nothing is missing, your mind shuts down and stops running into the past or future to regret something or to plan something. In that absence, for a moment, you have internal silence. When you have internal silence, then you are content, and you are happy. Feel free to disagree. Again, it's different for everybody.
People mistakenly believe happiness is just about positive thoughts and positive actions. The more I've read, the more I've learned, and the more I've experienced, every positive thought essentially holds within it a negative thought. It is a contrast to something negative. If I say I'm happy, that means I was sad at some point. Every positive thought even has a seed of a negative thought within it and vice versa, which is why a lot of greatness in life comes our of suffering. You have to view the negative before you can aspire to appreciate the positive.
Nature has no concept of happiness or unhappiness. Nature follows unbroken mathematical laws and a chain of cause and effect from the big bang to now. Everything is perfect exactly the way it is. It is only in our particular minds we are unhappy or not happy, and things are perfect or imperfect because of what we desire.
Happiness, love, and passion...aren't things you find - they're choices you make.
A happy person isn't someone who's happy all the time. It's someone who effortlessly interprets events in such a way that they don't lose their innate peace.
The fundamental delusion: There is something out there that will make me happy and fulfilled forever.
I think of happiness as an emergent property of peace. If you're peaceful inside and out, that will eventually result in happiness. But peace is a very hard thing to come by. The irony is the way most of us try to find peace is through war. When you start a business, in a way, you're going to war. When you struggle with your roommates as to who should clean the dishes, you're going to war. You're struggling so you can have some sense of security and peace later.
Peace is happiness at rest, and happiness is peace in motion. You can convert peace into happiness anytime you want. But peace is what you want most of the time. If you're a peaceful person, anything you do will be a happy activity. Today, the way we think you get peace is resolving all your external problems. But there are unlimited external problems. The only way to get peace on the inside is by giving up this idea of problems.
Changing habits:
Pick one thing. Cultivate a desire. Visualize it. Plan a sustainable path. Identify needs, triggers and substitutes. Tell your friends. Track meticulously. Self-discipline is a bridge to a new self-image. Make in the new self-image. It's who you are -- now.
In any situation in life, you always have three choices: you can change it, you can accept it, or you can leave it. If you want to change it, then it is a desire. It will cause you suffering until you successfully change it. So don't pick too many of those. Pick one big desire in your life at any given time to give yourself purpose and motivation.
Why not two?
You'll be distracted. Even one is hard enough. Being peaceful comes from having your mind clear of thoughts. Being peaceful comes from having your mind clear of thoughts. And a lot of clarity comes from being in the present moment. It's very hard to be in the present moment if you're thinking, "I need to do this. I want that. This has got to change."
List of books and shows recommended by Naval
The beginning of infinity: Explanations That Transform the World by David Duetsch
Sapiens: A Brief History of Humankind by Yuval Noah Harari
The Rational Optimist: How Prosperity Evolves by Matt Ridley
Skin in the Game by Nassim Taleb
The bed of Procrustes: Philosophical and Practical Aphorisms by Nassim Taleb
Sixy Easy Pieces: Essentials of PhysicsExplained by Its Most Brilliant Teacher by Richard Feynman
Thing Explainer: Complicated Stuff in Simple Words by Randall Munroe
Thinking Physics: Understandable Practical Reality by Lewis Caroll Epstein
The Lessons of History by Will and Ariel Durant
The Sovereign Individual: Mastering the Transition to the Information Age by James Dale Davidson and Lord William Rees-Mogg
Poor Charlie’s Almanack: The Wit and Wisdom of Charles T Munger by Charlie Munger
Reality Is Not What It Seems: The Journey to Quantum Gravity by Carlo Rovelli
Seven Brief Lessons on Physics by Carlo Rovelli
The Book of Life by Jiddu Krishnamurti
Total freedom: The Essential Krishnamurti by Jiddu Krishnamurti
Siddhartha by Herman Hesse
The Book of Secrets: 112 Meditations to Discover the Mystery Within by Osho
Meditations by Marcus Aurelius
Love Yourself Like Your Life Depends on It by Kamal Ravikant
The Tao of Seneca: Practical Letters from a Stoic Master (audiobook)
How to Change Your Mind by Michael Pollan
Striking Thoughts: Bruce Lee ’s Wisdom for Daily Living Bruce Lee by Bruce Lee
The Prophet by Khalil Gibran
Scifi
Ficciones by Jorge Luis Borges
Stories of Your Life and Others by Ted Chiang
Exhalation: Stories by Ted Chiang
The Lifecycle of Software Objects by Ted Chiang
Snow Crash by Neal Stephenson
The Last Question by Issac Asimov (short story)
Rick and Morty (TV show)
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Brilliant summary once again, Vaibhav. Loved reading.