This is a thoughtful read. It boils down the key insights and findings of entrepreneur/investor Naval Ravikant in an easy-to-digest manner. I appreciated the logic of Naval’s view points and the crispness with which he expresses himself.
The Almanack of Naval Ravikant
By Eric Jorgenson
What I like about this book is that Naval has thought deeply on many issues. He has an engineering mind and likes to summarize his insights as if they are formulas or theorems. They may at first come across as reductionist. But his beguiling simplicity reveals a thoughtfulness rarely found, at least in many self-help books.
Here are 7 takeaways:
- More than fanboy
I didn’t know much about Naval Ravikant. Yes, I knew he was the founder of AngelList, an investor, entrepreneur, and fellow Dartmouth graduate. But I didn’t follow his Tweets, read his blog, or generally keep up with the guy. When I learned about this book, it didn’t excite me. Maybe because it was compiled by another writer, Eric Jorgenson. At first it seemed like a fanboy initiative – and maybe it really is. If I wanted to read about Naval, I’ll just read his blog, right?But Eric does a good job of assembling Naval’s insights and then boiling them down, so you don’t have to hunt through Naval’s blog or Twitter timeline.
Naval is one of the smartest people I’ve ever met, and he’s one of the most courageous…He is rarely part of any consensus, and the uniqueness of his life, lifestyle, family dynamics and startup success is a reflection of conscious choices he’s made to do things differently.
- Read, read, read
Naval grew up in India without many friends. He filled his life with books. He believes that reading is the best life skill that you can acquire. I agree with him that reading will put you on a path of self-discovery and learning. When you become a “perpetual learner” you’ll be on the path to (financial) freedom. Read what you love to develop your love of reading. Turn it into a habit. Explain what you read or learned to someone else. When you teach (or blog) you achieve some level of deeper understanding and maybe even mastery.
My only real friends were books. Books make for great friends, because the best thinkers of the last few thousand years tell you their nuggets of wisdom.
- The skill of making money
To become wealthy, you have to work at it. Duh. But it’s really a skill that you have to work out. There is a dynamism that leads to success and wealth.
Getting rich is about knowing what to do, who to do it with, and when to do it. It is much more about understanding than purely hard work. Yes, hard work matters, and you can’t skimp on it. But it has to be directed in the right way.
Naval also believes that true wealth is something that is repeatable, sustainable. Assets generate income when you sleep. Passive income. You want wealth. Not just money.
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…..Learn to sell. Learn to build. If you can do both, you will be unstoppable.
Status vs. wealth
Status is a zero sum game. You’re up and I’m down. I win at your expense. Status is where you are in relation to someone else. It’s a game of hierarchy. Whereas wealth is a game of abundance. We can get wealthy together and not at each other’s expense. This resonated with me because I’ve started to realize (again) how pursuing status and status symbols can be a fool’s errand.
[Status] is a very old game. We’ve been playing it since monkey tribes…Who’s number one? Who’s number two?…That’s why you should avoid status games in your life — they make you into an angry, combative person…Status games are always going to exist.
- The Age of Leverage
The concept of leverage keeps coming up in the book. He covers down on the compounding effects of money. And he applies that to other disciplines.Fortunes require leverage. Business leverage comes from capital, people, products with no marginal cost of replication (code and media).It’s not just money that compounds. Your reputation does too. People will seek you out. Opportunities will come to you. It takes time for you to acquire and earn your reputation.
You can achieve leverage via labor and money. Labor is messy. Managing other people comes with all sorts of personnel issues. When you leverage money, you can scale your decisions massively.
You can also find leverage with “products with no marginal cost of replication” such as books, music, (ahem), blogs. I write this blog entry once, and it’s here for many people to read, even while I sleep. This is the newest form of leverage.
Forget rich versus poor, white-collar versus blue. It’s now leveraged versus un-leveraged.
He summarizes the various forms of leverage and how to think about them going forward.
Now we’ve invented leverage — through capital, cooperation, productivity, all these means. We live in an age of leverage. As a worker, you want to be as leveraged as possible so you have a huge impact without as much time or physical effort.
- Like an artist
When you become wealthy and earn a loft reputation, then what? You realize that those things don’t make you happy. Instead, Naval contends that meaning comes when you do things for their own sake.
Ironically, when you do things for their own sake, you create your best work. Even if you’re just trying to make money, you will actually be the most successful.
But you need time to live like an artist. And that’s where Naval offers a gem, something I’ve tried to learn and live by.
Whenever you can in life, optimize for independence rather than pay. If you have independence and you’re accountable on your output, as opposed to your input — that’s the dream.
Freedom is the goal. Freedom to do what you want. Live how you want to.
Naval seems to have followed the path of Buddha. He observes that even Buddha was a prince before he began his path of meditation, detachment, and self-enlightenment. Naval made a fortune before turning to a more ascetic path. One of the book’s highlights is how Naval explains his attempts at meditation and detachment.
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…Desire is a contract you make with yourself to be unhappy until you get what you want.
Try sitting for thirty minutes and doing nothing. Just try it. Hard to do. But it’s a skill you have to learn and hone. But this is the journey of building good habits.
Essentially, you have to go through your life replacing your thoughtless bad habits with good ones, making a commitment to be a happier person. At the end of the day, you are a combination of your habits and the people you spend the most time with.
The book includes Naval’s suggested reading list, which is worth a skim, too.
Here’s the entire audiobook.