You can download this book for free at navalmanack.com. There’s value in every word, so summarizing it may ultimately be an injustice.
Main ideas
Getting rich isn’t just about luck, and happiness isn’t just a trait we’re born with. They might seem out of reach, but building wealth and being happy are skills we can learn.
Naval Ravikant is an entrepreneur, philosopher and investor who has captivated the world with his principles for building wealth and creating long-term happiness. This book is a collection of Naval’s wisdom and experience from the last ten years, curated from his most insightful interviews and reflections. Through Naval’s own words, you learn how to walk your own unique path towards a happier, wealthier life.
Part I: Wealth
How to get rich without getting lucky.
Making money is not a thing you do—it’s a skill you learn.
Understand how wealth is created
Becoming wealthy is a skill set anyone can develop. Hard work matters, but it doesn’t always translate into wealth. It’s more about knowing what to do, who to do it with, and when to do it. You need hard work, but it has to be directed the right way.
Figuring out what you should work on is the most important thing.
Getting rich without getting lucky comes down to uniqueness, leverage, accountability and specific knowledge. If your long-term goal is to become wealthy, ask yourself whether what you’re doing is authentic to you, and whether you’re productizing and scaling it, with labour, capital, code or media. It’s hard, because just figuring out what you can uniquely provide can take years.
Money is what we think we want, but it isn’t. Money is how we transfer wealth: social credits, an IOU for past work. Wealth is what we actually want. Wealth is having assets that earn while we sleep.
Society pays you for giving it what it wants but doesn’t yet know how to get. Figure out what you can provide that society needs, that comes naturally to you, and that’s within your skills and capabilities. Then scale it, to the point where everyone could have one.
Find and build specific knowledge
Specific knowledge can’t be taught, but it can be learned. Think about what you were good at, almost effortlessly, as a kid: something you wouldn’t consider a skill, but other people noticed. Specific knowledge is a combination of your DNA, your upbringing and your response to it. It’s baked into who you are.
Specific knowledge is found by pursuing your innate talents, your genuine curiosity and your passion. It isn’t taught in school. It’s usually on the edge of knowledge, and hard to do. If you don’t go all in, someone else will, and they’ll outperform you by a lot, because everything compounds.
Everyone is already the best at something: being themselves. If you’re building something that’s an extension of who you are, no one can compete with you on it. If you’re competing with someone, it’s because you’re trying to do the same thing. Be authentic.
The most important skill for getting rich is being a perpetual learner. You have to know how to learn anything you want, quickly. Foundations are important; it’s better to be a nine out of ten on the foundations than to go super deep into everything. We only really master one or two things in our lives.
Play long-term games with long-term people
Compounding extends beyond money. In business, it builds trust, relationships and reputation. When you find the right thing to do, and the right people to do it with, invest deeply. Sticking with it for decades is how you make the big returns.
Only a small fraction of our efforts really pay off. We forget most of what we learn, and lose touch with most relationships. Those efforts still teach us, and become part of who we are. But when you find what works, go all in.
Take on accountability
You need leverage, and leverage comes in the form of labour, capital, or code and media. Accountability builds credibility, which lets you use leverage.
Accountability used to be severe: the captain went down with the ship. Today, the downside risk of most things isn’t that large. As long as you’re honest and made a high-integrity effort, most failures are easily forgiven. Don’t be afraid to take on accountability.
Build or buy equity in a business
Equity represents ownership of work. If you’re only paid for your time, it’s hard to build wealth. You want to earn while you’re sleeping, on vacation or retired; you want to earn nonlinearly. Real wealth is created by starting companies or investing, not by trading hours.
Find a position of leverage
We live in an age of infinite leverage. Following your genuine intellectual curiosity is a far better foundation for a career than chasing whatever is making money right now. Knowledge that only you, or a small group of people, have will come from your hobbies and passions.
When you do things for their own sake, you create your best work. You do it naturally, in a way you’re good at, so you stick with it. Follow your curiosity over what’s “hot”. If society comes to want what your curiosity produces, you’ll get paid extremely well.
You want to know how to do something other people don’t, at a time when it’s in demand. In the meantime, build your brand and make a name for yourself. When the opportunity comes, take advantage of it with as much leverage as possible.
- Labour is the oldest and worst form of leverage. It’s difficult to scale, requires a lot from you, and carries high risk.
- Capital is a good form of leverage. It scales easily, and is easier to manage than people.
- Code and media are the best forms of leverage. They cost nothing to replicate, need no one’s permission, and are how new fortunes are being made.
Forget rich versus poor, white-collar versus blue. It’s now leveraged versus un-leveraged.
Whenever you can, optimize for independence rather than pay. Having independence, and being accountable for your outputs, is the dream. Leverage lets you have a huge impact without as much time or physical effort.
What you want in life is to control your time. Specific knowledge, accountability and leverage put you in a position to be paid what you’re worth, so you can focus on what you enjoy. Learn to sell, and learn to build. You want to earn with your mind, not your time. Don’t gamble everything on one go; take rationally optimistic bets with big upsides.
Get paid for your judgement
Aim to have, and be paid for, unique knowledge. Be paid for your outputs, not your inputs, and let computers or robots do the time-consuming work. Small differences in judgement can have dramatic impacts.
Judgement moves you from being paid for how hard you work to being paid for the outcomes your work produces. No one cares how hard Warren Buffett works; they just want his results. Leverage magnifies decisions, so being the best at what you do is very important in the age of leverage.
Prioritize and focus
Wealth is built through consistent opportunities, not one huge payout. It stacks up little by little, always compounding.
No one will value your time more than you value yourself, so factor time into every decision. Set a high hourly rate for yourself, and don’t do things that don’t pay it. Either move on, or outsource the work.
If you have a relative mindset, you’ll compare yourself to others and create jealousy. Being anti-wealth will stop you from becoming wealthy. Be optimistic and positive; optimists actually do better in the long run.
You either play the money game or the status game. Status is a zero-sum game: for you to win, someone has to lose. Avoid zero-sum games. Don’t create your wealth at the expense of someone else’s; play positive-sum games.
Spend more time deciding where you live, who you’re with, and what you do. These three things determine the trajectory of our lives more than anything, and aren’t given enough thought. Figure out what you’re good at, and help other people with it.
Find work that feels like play
Be more interested in solving problems than in making money. What you really want is freedom. Life is full of games, and it’s about finding the games you’re good at. Playing all day is a lot more sustainable than working all day.
Retirement is when you stop sacrificing today for an imaginary tomorrow. When today is complete, in and of itself, you’re retired.
Money isn’t the root of all evil, but the lust for money is bad, because it’s a bottomless pit. It occupies your mind, and the number always moves: the more you have, the more you want. The trick is not to upgrade your lifestyle, so you can get ahead and become financially free. Value freedom above everything else, and remember that money can buy freedom.
How to get lucky
In 1,000 parallel universes, you want to be wealthy in 999 of them. You don’t want to be wealthy in the fifty of them where you got lucky, so we want to factor luck out of it.
There are four kinds of luck: blind luck, luck through persistence, being able to spot luck, and having luck find you. You want to create your own luck, by working hard and putting yourself in a position to earn it, see it, or have it come to you (the best kind). Build your character so it becomes your destiny.
Your character and reputation are things you can build, and they lead to opportunities that people might call luck. But you know the work that went into creating that position. Be a maker who makes something interesting that people want. Show your craft, practise your craft, and the right people will eventually find you.
Be patient
Generally, great people have great outcomes, but you have to be patient. Success never happens on the timescale you want, but it does happen. Don’t count the time, or you’ll run out of patience before success arrives. Enjoy it, and keep doing it.
It isn’t easy. Your real resume is a catalogue of your suffering, and anything given is taken for granted. Money doesn’t buy happiness, but it can buy freedom: the time and energy to pursue your own inner peace and happiness. Get rich, get fit and healthy, then get happy.
Judgement
There’s no shortcut to smart.
Judgement is underrated, and hard work is overrated. Judgement is the ability to make the right decisions while knowing the long-term consequences of your actions.
You don’t get rich by spending your time to save money. You get rich by saving your time to make money.
The direction you head in matters more than how fast you move, especially with leverage. Pick your direction, and start walking.
How to think clearly
Being a clear thinker is better than being smart. Truly smart people can explain things to a child, by making complex concepts simple. Clear thinkers understand the fundamentals, and understanding the fundamentals is much more important than memorizing complicated concepts.
Our preconceived notions of how something should be stop us from seeing its reality. You can only make progress when you start with the truth, which is the hard thing to see, and seeing it means letting go of your ego. The more we want something to be true, the harder it is to see whether it is.
What we wish to be true clouds our perception of what is true. Suffering is the moment when we can no longer deny reality.
Keep empty space in your calendar. When you’re not busy and not stressed, you have time to think. Boredom is where great ideas come from.
Shed your identity to see reality
Our egos are built in our first two decades, by our environment, our parents and society. Ask yourself whether the habits attached to your ego still serve you, make you happier and healthier, and help you accomplish what you set out to do.
To be honest, speak without identity.
Learn the skills of decision making
Make decisions that optimize for the long term rather than the short term, with an open, unbiased mind. Be radically honest; when you try to fool someone, you’re really fooling yourself. Praise specifically and criticize generally, so egos work with you, not against you.
With leverage, being a little more right and more rational gives you nonlinear returns. Small differences in decision making compound over time into huge differences.
Collect mental models
When making decisions, the brain is a memory-prediction machine. It’s better to rely on principles and mental models to reach a conclusion than on a specific memory. Naval’s favourites include evolution, inversion, complexity theory, economics, the principal-agent problem, compound interest, basic math, black swans, calculus, falsifiability, and “run uphill”.
If you can’t decide, the answer is no. The world is full of possibilities, and the decisions worth making are the ones you know right away. If you have two choices, go with the more difficult one; short-term pain brings long-term gain. The best way to build mental models is to read and learn, a lot.
Reading science, math, and philosophy one hour per day will likely put you at the upper echelon of human success within seven years.
Learn to love to read
Learning is abundant; the desire to learn is scarce. Read what you love until you love to read. Make reading a habit you can stick to. It doesn’t really matter what you read, as long as you read. Eventually, it will dramatically improve your life.
As long as I have a book in my hand, I don’t feel like I’m wasting time.Charlie Munger
Read and reread books, especially the tough ones. Learning is like working out: in the short term it might hurt a little, but once you build a high-quality foundation, it’s easy to build on. Start with the classics that newer material builds on. Understand concepts well enough to teach them, rather than memorizing them.
Part II: Happiness
The three big ones in life are wealth, health and happiness. We pursue them in that order, but their importance is the reverse.
Don’t take yourself so seriously. You’re just a monkey with a plan.
Happiness is learned
Money plays a small part in the happiness equation. A big part is learning what happiness means to you. Happiness is the default state: it’s what’s there when you remove the sense that something is missing from your life. It’s the absence of desire, especially for external things.
Nature has no concept of happiness or unhappiness. Everything is exactly the way it is. Only in our minds is there happiness or unhappiness, perfection or imperfection, all based on what we desire. The world just reflects your own feelings back to you, and how you interpret it is your choice.
Happiness also depends on the expectations you set for yourself. If you set no expectation for how things “should” be, and accept them for what they are, you can be immersed in the moment for everything it is. It’s our own responsibility to interpret everything in the best possible way.
We think of ourselves as fixed and the world as malleable, but it’s really we who are malleable and the world is largely fixed.
Real happiness is a side effect of peace. It comes from acceptance, not from changing your external environment. And you can improve your happiness, just like anything else.
Happiness is a choice
Happiness, love, and passion… aren’t things you find—they’re choices you make.
Happiness is a choice and a skill you develop. The mind is as malleable as the body. Yet we spend our time and effort trying to change the external world, while accepting ourselves just the way we are.
Happiness requires presence and peace
We’re rarely in the present; we’re focused on either the past or the future. We can destroy our happiness by spending all our time on fantasies about the future, and create unhappiness by comparing the past to the present.
What if this life is the paradise we were promised, and we’re just squandering it?
Happiness requires peace more than purpose. Purpose can create anxiety, always focused on the next thing. Peace is being able to sit and do nothing at all.
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.
Every desire is a chosen unhappiness
We’re addicted to desire, deluded into thinking an external thing will bring us happiness. We make the same fundamental mistake over and over: “I’ll be happy when ___.”
Desire is making yourself unhappy until you get what you want. We desire things all day, and then wonder why we’re unhappy. Choose your desires carefully, rather than chasing things you don’t really want. Doing more creates more desire, which creates more unhappiness over things we don’t really want.
Success does not earn happiness
Happiness is internal, and external circumstances have little to do with it. Peace isn’t found by resolving all of your external problems; it’s found internally, by giving up the idea of problems. Learn to flow with life, and accept it for what it is.
Peace is happiness at rest, and happiness is peace in motion.
Envy is the enemy of happiness
We play life as though it’s a multiplayer game, constantly comparing ourselves to other people. Doing things for external reasons is hard; doing them for internal reasons is easy. Compete against yourself, and play a single-player game.
Real scorecards are internal. Jealousy is a poisonous emotion; it doesn’t make you better off, only worse. You may envy one part of someone’s life, but you wouldn’t really give up everything you are to be them, with all of the bad as well as the good. Don’t be anyone else. Be you.
Happiness is built by habits
Happiness is a skill you can learn, and things get better when you focus on it. It’s found through trial and error, and through believing you will find it.
When working, surround yourself with people more successful than you. When playing, surround yourself with people happier than you.
You’re a combination of your habits and the people you spend the most time with. Replace thoughtless habits with good ones, and commit to being a happier person. Choose long-term happiness over short-term happiness, and spend time with positive people you admire and respect, but don’t envy.
Be present, and notice how many gifts and how much abundance surround you at all times. Decide that happiness is important to you, start working on it, and prioritize it every day.
Find happiness in acceptance
You always have three choices: change it, accept it, or leave it. Don’t simply wish for one of them; take responsibility for making a choice. Accepting means being okay with whatever the outcome is.
We’re all here for such a short time. Being unhappy doesn’t do anyone any favours. In the end, none of this is going to matter. The best thing we can do is enjoy ourselves, do something positive, project some love, make someone happy, laugh a little, appreciate the moment, and do our work.
Saving yourself
Doctors won’t make you healthy.
Nutritionists won’t make you slim.
Teachers won’t make you smart.
Gurus won’t make you calm.
Mentors won’t make you rich.
Trainers won’t make you fit.
Ultimately, you have to take responsibility. Save yourself.
Choosing to be yourself
Stop trying to do things the way everyone else does; do things your way. Listen and absorb, but don’t emulate. No one can beat you at being you. Your goal in life is to find what needs you the most. Don’t do what other people are doing; you’ll never beat them at being someone else.
To make an original contribution, you have to be irrationally obsessed with something.
Choosing to care for yourself
Your number one priority, above all else, is your health: physical health, then mental health, then spiritual health, then your family’s health and well-being. If those are good, go after whatever else you want to do in the world.
We evolved for scarcity but live in abundance, so there’s a constant struggle to say no when our bodies want to say yes. With medicine and nutrition, subtract before you add.
When you say “I don’t have time”, you’re really saying “It’s not a priority.” Make whatever is important to you your number one priority, and you’ll have no excuse.
Meditation and mental strength
Most of our suffering comes from avoidance. Instead of suffering over something mentally, accept it, deal with it, and embrace it.
Meditation comes in many forms. It can be as simple as choosing not to judge, and accepting everything for what it is, or just being still with your eyes closed. Listen to your thoughts, understand where they come from, and quiet your mind. Your mind is a muscle, and it can be trained and conditioned.
Life-hack: When in bed, meditate. Either you will have a deep meditation or fall asleep. Victory either way.
Choosing to build yourself
The greatest superpower is the ability to change yourself.
Whether life plays out positively or negatively depends on how we interpret it. Avoid getting angry over unfortunate situations; focus on the facts, and stay level-headed.
Life is about constantly building good habits and getting rid of bad ones. We are our habits. Instead of saying “I’m going to do this” or “I’m going to be that”, just do it. Saying you’re going to is putting it off, and giving yourself an out. If you really want to change, just change.
Impatience with actions, patience with results.
Choosing to grow yourself
Set systems, not goals. Figure out the environment you thrive in, and create it around you, so you’re likely to succeed. A good system leads to success almost every time.
Read and learn what you’re genuinely interested in, not just what society tells you to. Follow your curiosity and understand the basics; it’s much more likely to help you find a winning path.
Choosing to free yourself
Everyone is making it up as they go. You have to find your own path. Along the way, you want freedom from expectations, from employment, from reacting, from anger and sadness, from being forced to do things, and from uncontrolled thinking.
Value your time; it’s all you have, so don’t waste it. Spend it in ways that are meaningful to you. Focus on yourself; being happy will make other people happy. Self-awareness and self-discovery are lifelong processes, with no end point.
Philosophy
The meaning of life
It’s a big question, so Naval offers three answers:
- It’s personal. You have to find your own meaning.
- There is no meaning. In the grand scheme, our time is insignificant.
- It’s a means to an end. We’re all headed towards the end of the universe.
Live by your values
Always be honest. All the benefits in life come from compounding, and compounding takes time, so work on things with long-term payoffs. Treat everyone as a peer; no one is above or below anyone else. Let go of anger; it does no one any good.
Discovering and living by your values helps you become the person you most want to be. It also attracts people with similar values, and brings people closer together.
Rational Buddhism
Rational Buddhism means reconciling spiritual ideas with science and evolution: taking the beliefs you can verify for yourself, without having to accept the ones that don’t make sense to you. Try everything, test it, be skeptical, keep what’s useful, and discard the rest.
Wisdom is understanding the long-term consequences of your actions.
The present is all we have
The only thing that exists is this exact point in space where you are, at the exact time you happen to be here. Each moment is perfectly unique, and slips away before we can grab it.
Everything is more beautiful because we’re doomed. You will never be lovelier than you are now, and we will never be here again.Homer, The Iliad
Final thoughts
This is a book that could never be recommended enough. It’s a book about finance, happiness, life, philosophy and self-help, but it’s unlikely to rank at the top of any of those categories for most people. Despite that, it might be the single most influential book across all of them. You could read it a hundred times and find new meaning with each read.
Naval is an incredible thinker. You could reach that conclusion just by looking at what he’s accomplished in business. But what’s even more impressive is his unique perspective on life. His range of insight seems to span everything from a Buddhist monk to Elon Musk.
A single one of his posts can be the inspiration you need to accomplish everything you want in business. Or it could be exactly what you needed to hear to reprioritize and live a more purposeful life. Any single sentence could be the one you need.
It’s hard to summarize, because it’s already a summary of Naval’s thoughts and ideas. That’s why I say there’s value in every word, and summarizing it might be an injustice. There’s a chance that what I left out is as valuable as what I included. If anything here resonated with you, reading The Almanack of Naval Ravikant might change your life.
All ideas, quotes and illustrations are borrowed from or based on The Almanack of Naval Ravikant by Eric Jorgenson. To learn more, visit ejorgenson.com.
