[Book Notes] 15 insights: The Almanack of Naval Ravikant



Naval Ravikant is the founder of Angellist. The Almanack of Naval Ravikant (link here) is a collection of Naval's tweets and learnings from blogs and podcasts. Some of my key insights from this book are as follows:


[Note: These are snippets from my Kindle Highlights for this book]


#1:

You’re not going to get rich renting out your time

You must own equity—a piece of a business—to gain your financial freedom. You will get rich by giving society what it wants but does not yet know how to get. At scale.


Everybody who really makes money at some point owns a piece of a product, a business, or some IP. That can be through stock options if you work at a tech company. That’s a fine way to start. But usually, the real wealth is created by starting your own companies or even by investing. In an investment firm, they’re buying equity. These are the routes to wealth. It doesn’t come through the hours.

 

#2:

Fortunes require leverage

Business leverage comes from capital, people, and products with no marginal cost of replication. An army of robots is freely available—it’s just packed in data centers for heat and space efficiency. Use it.


If you’re looking toward the long-term goal of getting wealthy, you should ask yourself, “Is this authentic to me? Is it myself that I am projecting?” And then, “Am I productizing it? Am I scaling it? Am I scaling with labor or with capital or with code or with media?” Wealth is assets that earn while you sleep. Wealth is the factory, the robots, cranking out things. Wealth is the computer program that’s running at night, serving other customers. Wealth is even money in the bank that is being reinvested into other assets, and into other businesses. Technology democratizes consumption but consolidates production. The best person in the world at anything gets to do it for everyone.


Leverage comes in labor, comes in capital, or it can come through code or media. But most of these, like labor and capital, people have to give to you. For labor, somebody has to follow you. For capital, somebody has to give you money, assets to manage, or machines. 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. In almost any salaried job, even one paying a lot per hour like a lawyer or a doctor, you’re still putting in the hours, and every hour you get paid. Without ownership, 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 nonlinearly.


There are three broad classes of leverage:

  1. One form of leverage is labor—other humans working for you. It is the oldest form of leverage, and actually not a great one in the modern world. I would argue this is the worst form of leverage that you could possibly use. Managing other people is incredibly messy. It requires tremendous leadership skills.

  2. Money is good as a form of leverage. It means every time you make a decision, you multiply it with money. Capital is a trickier form of leverage to use. It’s more modern. It’s the one that people have used to get fabulously wealthy in the last century. It’s probably been the dominant form of leverage in the last century.It scales very, very well. If you get good at managing capital, you can manage more and more capital much more easily than you can manage more and more people.

  3. The final form of leverage is brand new—the most democratic form. It is: “products with no marginal cost of replication.” This includes books, media, movies, and code.

Probably the most interesting thing to keep in mind about new forms of leverage is they are permission-less. They don’t require somebody else’s permission for you to use them or succeed. For labor leverage, somebody has to decide to follow you. For capital leverage, somebody has to give you money to invest or to turn into a product. Coding, writing books, recording podcasts, tweeting, YouTubing—these kinds of things are permission-less. You don’t need anyone’s permission to do them, and that’s why they are very egalitarian. They’re great equalizers of leverage. 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 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 on 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.


I think people have a hard time understanding a fundamental fact of leverage. If I manage $1 billion and I’m right 10 percent more often than somebody else, my decision-making creates $100 million worth of value on a judgment call. With modern technology and large workforces and capital, our decisions are leveraged more and more.

 

#3:

Retirement is when you stop sacrificing today for an imaginary tomorrow. The winners of any game are the people who are so addicted they continue playing even as the marginal utility from winning declines.

When today is complete, in and of itself, you’re retired. How do you get there?

  1. Well, one way is to have so much money saved that your passive income (without you lifting a finger) covers your burn rate.

  2. A second is you just drive your burn rate down to zero—you become a monk.

  3. A third is you’re doing something you love. You enjoy it so much, it’s not about the money.

So there are multiple ways to retirement. I’m always “working.” It looks like work to others, but it feels like play to me. And that’s how I know no one can compete with me on it. Because I’m just playing, for sixteen hours a day. If others want to compete with me, they’re going to work, and they’re going to lose because they’re not going to do it for sixteen hours a day, seven days a week.

 

#4:

Become the best at what you do. Refine what you do until this is true. Opportunity will seek you out. Luck becomes your destiny.

There are four kinds of luck:

  1. The first kind of luck is blind luck where one just gets lucky because something completely out of their control happened. This includes fortune, fate, etc.

  2. Then, there’s luck through persistence, hard work, hustle, and motion. This is when you’re running around creating opportunities. You’re generating a lot of energy, you’re doing a lot to stir things up. It’s almost like mixing a petri dish or mixing a bunch of reagents and seeing what combines. You’re just generating enough force, hustle, and energy for luck to find you.

  3. A third way is you become very good at spotting luck. If you are very skilled in a field, you will notice when a lucky break happens in your field, and other people who aren’t attuned to it won’t notice. So, you become sensitive to luck.

  4. The last kind of luck is the weirdest, hardest kind, where you build a unique character, a unique brand, a unique mindset, which causes luck to find you. For example, let’s say you’re the best person in the world at deep-sea diving. You’re known to take on deep-sea dives nobody else will even dare to attempt. By sheer luck, somebody finds a sunken treasure ship off the coast they can’t get to. Well, their luck just became your luck, because they’re going to come to you to get to the treasure, and you’re going to get paid for it.

 

#5:

Desire is a contract you make with yourself to be unhappy until you get what you want. Happiness is being satisfied with what you have. Success comes from dissatisfaction. Choose.

The three big (decisions) in life are wealth, health, and happiness. We pursue them in that order, but their importance is reverse. We are highly judgmental survival-and-replication machines. We constantly walk around thinking, “I need this,” or “I need that,” trapped in the web of desires. Happiness is the state when nothing 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.


To me, happiness is not about positive thoughts. It’s not about negative thoughts. It’s about the absence of desire, especially the absence of desire for external things. The fewer desires I can have, the more I can accept the current state of things, the less my mind is moving, because the mind really exists in motion toward the future or the past. At any given time, when you’re walking down the streets, a very small percentage of your brain is focused on the present. The rest is planning the future or regretting the past. This keeps you from having an incredible experience. It’s keeping you from seeing the beauty in everything and for being grateful for where you are.


My old definition was “freedom to.” Freedom to do anything I want. Freedom to do whatever I feel like, whenever I feel like. Now, the freedom I’m looking for is internal freedom. It’s “freedom from.” Freedom from reaction. Freedom from feeling angry. Freedom from being sad. Freedom from being forced to do things. I’m looking for “freedom from,” internally and externally, whereas before I was looking for “freedom to.” [4]

 

#6:

A lot of what goes on today is what many of you are doing right now—beating yourself up and scribbling notes and saying, “I need to do this, and I need to do that, and I need to do…” No, you don’t need to do anything.

There is no legacy. There’s nothing to leave. We’re all going to be gone. Our children will be gone. Our works will be dust. Our civilizations will be dust. Our planet will be dust. Our solar system will be dust. In the grand scheme of things, the Universe has been around for ten billion years. It’ll be around for another ten billion years. Your life is a firefly blink in a night. You’re here for such a brief period of time. If you fully acknowledge the futility of what you’re doing, then I think it can bring great happiness and peace because you realize this is a game. But it’s a fun game. All that matters is you experience your reality as you go through life. Why not interpret it in the most positive possible way?


You’re going to die one day, and none of this is going to matter. So enjoy yourself. Do something positive. Project some love. Make someone happy. Laugh a little bit. Appreciate the moment. And do your work.

 

#7:


What is the meaning and purpose of life? I’ll give you three answers:

  1. It’s personal. You have to find your own meaning. Any piece of wisdom anybody else gives you, whether it’s Buddha or me, is going to sound like nonsense. Fundamentally, you have to find it for yourself, so the important part is not the answer, it’s the question.

  2. There is no meaning to life. There is no purpose to life. Osho said, “It’s like writing on water or building houses of sand.” The reality is you’ve been dead for the history of the Universe, 10 billion years or more. You will be dead for the next 70 billion years or so, until the heat death of the Universe.

  3. The last answer I’ll give you is a little more complicated. From what I’ve read in science (friends of mine have written books on this), I’ve stitched together some theories. Maybe there is a meaning to life, but it’s not a very satisfying purpose. Basically, in physics, the arrow of time comes from entropy. The second law of thermodynamics states entropy only goes up, which means disorder in the Universe only goes up, which means concentrated free energy only goes down. If you look at living things (humans, plants, civilizations, what have you) these systems are locally reversing entropy. Humans locally reverse entropy because we have action. In the process, we globally accelerate entropy until the heat death of the Universe. You could come up with some fanciful theory, which I like, that we’re headed towards the heat death of the Universe. In that death, there’s no concentrated energy, and everything is at the same energy level. Therefore, we’re all one thing. We’re essentially indistinguishable. What we do as living systems accelerates getting to that state.

 

#8:

Set and enforce an aspirational personal hourly rate.

If fixing a problem will save less than your hourly rate, ignore it. If outsourcing a task will cost less than your hourly rate, outsource it. The hourly aspirational rate should seem and feel absurdly high. If it doesn’t, it’s not high enough. Whatever you picked, my advice to you would be to raise it. Like I said, for myself, even before I had money, for the longest time I used $5,000 an hour. And if you extrapolate that out into what it looks like as an annual salary, it’s multiple millions of dollars per year.

 

#9:

You don’t get rich by spending your time to save money. You get rich by saving your time to make money.

I would love to be paid purely for my judgment, not for any work. I want a robot, capital, or computer to do the work, but I want to be paid for my judgment.


Demonstrated judgment—credibility around the judgment—is so critical. Warren Buffett wins here because he has massive credibility. He’s been highly accountable. He’s been right over and over in the public domain. He’s built a reputation for very high integrity, so you can trust him. People will throw infinite leverage behind him because of his judgment. Nobody asks him how hard he works. Nobody asks him when he wakes up or when he goes to sleep. They’re like, “Warren, just do your thing.” We waste our time with short-term thinking and busywork. Warren Buffett spends a year deciding and a day acting. That act lasts decades.

Spend more time making the big decisions. Almost all biases are time-saving heuristics. For important decisions, discard memory and identity, and focus on the problem.

 

#10:

“I don’t have time” is just another way of saying “It’s not a priority.”

Value your time. It is all you have. It’s more important than your money. It’s more important than your friends. This doesn’t mean you can’t relax. As long as you’re doing what you want, it’s not a waste of your time. But if you’re not spending your time doing what you want, and you’re not earning, and you’re not learning—what the heck are you doing?


My number one priority in life, above my happiness, above my family, above my work, is my own health. It starts with my physical health. I do not start my day until I’ve worked out. I don’t care if the world is imploding and melting down, it can wait another thirty minutes until I’m done working out. Second, it’s my mental health. Third, it’s my spiritual health. Then, it’s my family’s health. Then, it’s my family’s wellbeing. After that, I can go out and do whatever I need to do with the rest of the world.

 

#11:


Technology is the 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 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. Then, you have to figure out how to scale it because if you only build one, that’s not enough. You’ve got to build thousands, or hundreds of thousands, or millions, or billions of them so everybody can have one.

 

#12:

The problem with getting good at a game, especially one with big rewards, is you continue playing it long after you should have outgrown it.

Survival and replication drive put us on the work treadmill. Hedonic adaptation keeps us there. The trick is knowing when to jump off and play instead.


One day, I realized with all these people I was jealous of, I couldn’t just choose little aspects of their life. I couldn’t say I want his body, I want her money, I want his personality. You have to be that person. Do you want to actually be that person with all of their reactions, their desires, their family, their happiness level, their outlook on life, their self-image? If you’re not willing to do a wholesale, 24/7, 100 percent swap with who that person is, then there is no point in being jealous.

 

#13:


You always have three options:

  1. you can change it,

  2. you can accept it, or

  3. you can leave it.

What is not a good option is to sit around wishing you would change it but not changing it, wishing you could leave it but not leaving it and not accepting it. That struggle or aversion is responsible for most of our misery.

 

#14:


One of the things I’m trying to get rid of is the word “should.” Whenever the word “should” creeps up in your mind, it’s guilt or social programming. Doing something because you “should” basically means you don’t actually want to do it. It’s just making you miserable, so I’m trying to eliminate as many “shoulds” from my life as possible.

 

#15:


Intentions don’t matter. Actions do. Let’s get you rich first. I’m very practical about it because, you know, Buddha was a prince. He started off really rich, then he got to go off in the woods.

 

Other quotes that I really liked from this book are:


Never ask if “I like it” or “I don’t like it.” I think “this is what it is” or “this is what it isn’t.” —Richard Feynman

Julius Caesar famously said, “If you want it done, then go. And if not, then send.”

Confucius says you have two lives, and the second one begins when you realize you only have one.

Everyone starts out innocent. Everyone is corrupted. Wisdom is the discarding of vices and the return to virtue, by way of knowledge.

I once asked a monk how he found peace. “I say ‘yes,’” he’d said. “To all that happens, I say ‘yes.’”

Anger is a hot coal you hold in your hand while waiting to throw it at someone else. (Buddha)

Earn with your mind, not your time.

Impatience with actions, patience with results.

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 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.

Play iterated games. All the returns in life, whether in wealth, relationships, or knowledge, come from compound interest

When you’re young, you have time. You have health, but you have no money. When you’re middle-aged, you have money and you have health, but you have no time. When you’re old, you have money and you have time, but you have no health. So the trifecta is trying to get all three at once