Notes on “How to get rich without getting lucky” podcast

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I stumbled upon Naval Ravikant’s twitter through Andrej Karpathy’s feed. Altough I am generaly quite skeptical whenever I hear or read something from the preachers spreading the religion of money and status, I found Naval’s take on “how to get rich” topic suprisingly insightful. I think it’s a reasonable middle-ground between the toxic and corrupt advice from the people that try to sell you on the money/status game vs. the conservative spiritual teachings claiming you should live a minimalistic life devoid of all pleasure, resist inovation, technologies and change in general.

What is wealth?

Wealth is freedom to do what you really like, so that you don’t have to wear tie every day to your boring job. Working and making money is giving up your time in exchange for the time of other people.

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

You must own an equity, a piece of a business to gain your financial freedom. This is probably one of the most important thing

Look for a job where your inputs and outputs are highly disconnected, where you are not payed by the hour. Tools and leverage are the things that create this disconnect.

The role of internet

The internet allows you to scale. Any niche obsession, people with wierd interests, you can reach them through the internet. You can use your unique skill, that is useful only to a small percentage of all the people, but small percentage of 7B people is still a lot. Space of careers has broadened so much. You just have to be the best at that particular skill. And because every human is unique, everybody is best at something.

“Escape competition through authenticity” - Naval Ravikant

Neccessary qualities of people you work with

  • intelligence - stupid people gonna go in the wrong direction
  • energy, optimism - world is full of lazy intelligent people
  • moral consistency - can do busines with them for a long time, interests compound

Leverage

“Give me a place to stand, long enough lever, and I can move the world.” - Archimedes

There are few different types of leverage:

  • employess - overestimated by people, the worst kind of leverage
  • capital - hard to obtain
  • code, internet, techology - the new generation’s leverage
    • available to anyone, permisibless

You want to combine those 3.

Today, so many goods are democratized (movies, TV series, food, internet knowledge and services, PC games, consumer tech, … ), that if you are rich, you end up spending most of your money on signalling goods (Rolex, expensive jewelery, clothes, Supercars, …)

Network effect can provide free leverage - Metcalfe’s law - cost of building a network is linear with the size of the network, but value of a network is proportional to size^2

Work hard or work smart?

Someone says he’s working 100, 120 hours a week? That’s probably just signalling. No one can work at this rate sustainably, your brain just melts down. No one can run marathons all the time.

What should I do then? Much more effective is marathon of sprints. Work intensively for some time, then take a break, regroup, reassess, look at the problem from another perspective, iterate.

When you are inspired to do something, do it rightaway, otherwise the inspiration is just gonna die out and you’re not gonna go back to it.

Honesty

You want to be honest, because it leaves you with a clear mind. You don’t need to keep 2 threads of thoughts in your mind all the time:

  1. keeping track of the lies you’re telling
  2. what you actually think and believe

You also reject the people, that only want to hear the petty lies.