"How to Get Rich (Without getting lucky)" is twitter thread by Naval that went viral, and he has since talked about the thread on several podcasts. Naval has been kind enough to collect and edit all of those discussions into one long 3 hour and 33 minute podcast. Here we will visit the key points.
How to Get Rich | Naval Ravikant Podcast
"Wealth is assets that earn while you sleep"
Naval actually wanted to name the tweet thread, "How to create Wealth", but figured the actual title was a lot catchier, and he was right about that. So Naval believes it is first important to define what it means to be "Rich". Naval believe's if you are making millions or hundreds of millions of dollars a year, but your doing something you hate for 80-100 hours a week, you might be rich, but you are wealthy. Naval believes in creating and owning things that enrich other's lives that can exist and be consumed independent of you specifically once you have created it.
"Wealth Buys Your Freedom",... "Money is How we transfer wealth"
Naval sees money as a loose measure of wealth, it allows you to buy your freedom if you create or own something that runs independently of you.
"Status is your ranking in the social hierarchy."
Status games is working for titles or status symbols such as houses or cars, and it helps define your place in a social hierarchy. Naval is not saying you shouldn't own those things, just don't go outside of your means to acquire those things just to fit in in your social circles. Be content with your status, and work towards creating and owning things that generate wealth, and do not worry about status. Status requires one upping others, and even putting others down at times. It is a zero sum game, where as creating wealth is a positive sum game, you are making the pie bigger.
"There’s always a subtle competition going on between status and wealth. For example, when journalists attack rich people or the tech industry, they’re really bidding for status."
"Wealth isn't about taking something from somebody else. Ethical wealth creation makes abundance for the World"
The ultra wealthy, the Bill Gates and the Jeff Bezos, the Carnegies, enriched the world. They created frameworks, goods, and products that allowed others to go out and make things that made the world richer. Carnegies steal manufacturing created the cheap steal necessary for developers and builders to take on the massive projects of building large buildings and railroads. Millions of author's are able to profit from the online sale of books. Millions of organizations are now able to run more efficiently and provide better services with the use of the personal computer. This is wealth creation, when you are truly creating wealth, your are also enriching others and creating abundance for the world. You are making the pie larger, it is not a zero sum game.
When you steal or cheat others out of something, with cons or ponzi schemes, you make the pie smaller, and you are in fact playing less than a zero sum, winner take all game, you are playing a negative sum game, by taking away from the total pot to be won. You are destroying the fabric of society.
Everyone can be wealthy as seen in the First World today compared to 200 years ago. Technology creates abundance and wealth, with enough engineering knowledge, we could automate everything. This would lead to massive abundance, where we wouldn't have to work for basics. Clean energy and automation would be widespread. Technology would fulfill our needs, and work would become a form of creative expression. Capitalism isn't inherently evil but can be hijacked by corruption and monopolies.
Everyone can be rich through free market capitalism, which is intrinsic to human nature. Cooperation and exchange of information are fundamental to us, allowing us to cooperate across genetic boundaries. Free market capitalism is about keeping track of credits and debits, contributing to wealth creation and abundance for all. Despising wealth leads to a zero-sum game of status, dragging everyone down. Too many takers and not enough makers lead to societal collapse, as seen in Venezuela. A healthy society requires a balance between symbiotic relationships and a small number of parasites. Ethical wealth creation through free minds and markets is crucial, while unethical practices like monopolies and mispriced externalities must be avoided for a prosperous society.
"In 1,000 parallel universes, you want to be wealthy in 999 of them"
See: 4 Types of Luck
"Wealth stacks up one chip at a time, not all at once"
Naval is not saying attempt to acquire so much money you never have to get out of bed and everything is done for you. He means getting to the point where you no longer have to report to anyone, and you enjoy what you do. Enjoy creating wealth for yourself and others. You have the ability to step away, but you are still able to come back and create wealth for others, slowly and patiently stacking chips, not waking up to a pile of chips overnight.
"Build your character in a way that luck becomes deterministic"
Make luck deterministic by building your character and reputation. The first three kinds of luck have cliches, but the fourth kind, based on unique actions, lacks one. However, it becomes more like destiny when your character shapes it. Building character attracts opportunities, like Warren Buffett's reputation enabling exclusive deals. Your character and reputation allow you to seize opportunities that others might perceive as luck. Eccentricity is beneficial in uncovering novel opportunities. Extreme actions lead to extreme results, while normality doesn't yield exceptional returns. Avoid wasting time on trivial social games. Pursuing these types of luck eliminates bad luck and reverts to your own abilities.
This one seems pretty obvious, but one key point is if you are renting out your time, make sure it in a job where you are acquiring a skill where inputs do not have to match outputs. A great software engineer can create bitcoin and create wealth for millions, or a bad one can create code that never gets used. A a great lumber jack might be able to cut down twice as many trees as a bad one, those are proportional outputs jobs trading time for money and should be avoided.
"Renting out your time means you’re essentially replaceable"
"You must own equity to gain your financial freedom"
"People busy upgrading their lifestyles just can’t fathom this freedom"
Living below your means grants freedom, unlike those constantly upgrading lifestyles. Avoid upgrading too quickly to maintain freedom and ease of operation. The most dangerous traps are heroin addiction and a monthly salary that leads to a wage slave mentality. Wealth is better accumulated through discrete lump sums over time, allowing for creative risk-taking. High marginal tax rates hinder creative professions. Make money in intervals to prevent rapid lifestyle adaptation, leading to retirement and freedom to pursue meaningful work. Prioritize creative expression over monetary concerns.