Wealth and freedom
How to build wealth without selling your time
Investor Naval Ravikant's thinking on wealth, leverage and happiness, compiled by Eric Jorgenson. A walk through the ideas – specific knowledge, accountability, the four kinds of leverage – and what is problematic about reading success backwards.
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What this covers
- Wealth, money and status – three different things
- Specific knowledge, and why it cannot be taught in school
- Accountability, and taking risk under your own name
- Leverage – labour, capital, code and media
- Setting an hourly rate, and holding to it
- Playing long-term games with long-term people
- Happiness as a skill, and desire as a contract to be unhappy
What this covers (cont.)
- What is worth noting about the form and the origin
Wealth, money and status
Three things that get conflated. Wealth is assets that earn while you sleep: businesses, code, media, equity. Money is how we transfer wealth. Status is your rank in a hierarchy.
Specific knowledge
Accountability
Leverage
The most usable section. Effort alone is capped by the hours in the day. Leverage is what multiplies it, and it comes in four kinds:
Four kinds of leverage
| Kind | What it is | Needs permission? |
|---|---|---|
| Labour | People working for you | Yes – someone has to give you the job |
| Capital | Money at work | Yes – someone has to give you the money |
| Code | Software that does the job while you sleep | No |
| Media | Something you make once, read an unlimited number of times | No |
Hourly rate
Long-term games
“Play long-term games with long-term people.” Compounding works not only on money but on trust, reputation and relationships – and only if you stay long enough with the same people.
Happiness
Worth noting
The book is a collection of aphorisms, not an argument. That makes it easy to open anywhere and hard to use: “find your specific knowledge” is true and nearly impossible to act on.
Key points
- Wealth is something that earns while you sleep. A salary is not.
- Specific knowledge is what you learned because you could not stay away from it.
- Without leverage your output is capped by the hours in the day.
- Code and media keep working without anyone granting you permission or a wage.
Key points (cont.)
- Set an hourly rate, and refuse anything cheaper than it.
- The advice comes from one very fortunate person, and should be read with that in mind.
Questions this answers
- What is the difference between wealth and money?
- What is specific knowledge?
- What does Naval mean by leverage?
- Why are code and media different from employees and capital?
- How do you set your own hourly rate?
- What does he say about happiness?
Questions this answers (cont.)
- Is this advice usable for ordinary people?
Sources
- Eric Jorgenson – The Almanack of Naval Ravikant (2020), freely available at navalmanack.com
Spørretimen
Read the whole thing at
www.sporretimen.no/en/episodes/almanack-naval/