What is Avid Weekly Ideas?
Each week I publish an idea or two either from a book I am currently reading or from my backlog of book notes. 📚
Of course, this isn’t intended to replace book notes or reading the book itself. Instead the aim is to extract a key idea or two from a book that struck me as insightful and share-worthy. Then I package it into a bite-sized digestible chunk. I hope these little nuggets of insight will spark some inspiration or ideas in your own mind. 💡
12 Tips on Building Wealth – from the Angel Philosopher
Naval Ravikant is known as the Angel Philosopher, and for good reason.
For over 10 years he has been dropping wisdom in the form of tweets, podcasts, essays and dozens of interviews.
Today’s focus book is a compilation of all his work over the years into one convenient package, courtesy of Eric Jorgenson.
The book is divided into two main parts:
- Building Wealth
The focus of this instalment of Avid Weekly is on Building Wealth.
Let’s dive in.
Here are the 12 key takeaways I got from reading Part I: Building Wealth.
#1 – Making money is not just your job
Making money is not a thing you do—it’s a skill you learn.
Many people equate making money with one thing, their job. But building true wealth requires leverage and since everyone has 24 hours a day, there is limited leverage if you are renting out your time for money.
#2 – Making money is not just about hard work
It’s not really about hard work. You can work in a restaurant eighty hours a week, and you’re not going to get rich. 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.
If you don’t know yet what you should work on, the most important thing is to figure it out. You should not grind at a lot of hard work until you figure out what you should be working on.
Working hard is only half the equation. Working hard on the wrong thing will not yield optimal results.
I like to think that working hard is just the table stakes – what you need to even have a seat at the table of success. If you don’t even work hard you are not really “in the game.”
Equally important is working on the right thing. Remember the difference between being efficient (doing things right) and being effective (doing the right things).
#3 – Seek wealth, not money or status
Seek wealth, not money or status. Wealth is having assets that earn while you sleep. Money is how we transfer time and wealth. Status is your place in the social hierarchy.
Too many people fall into the trap of seeking status, or what Naval calls “playing status games.” Status is ephemeral. It is short-term. You feel good for a moment but it cannot set you free. Wealth is what will enable you to reclaim your time (especially if you have a full-time job) and live life on your terms.
#4 – Creating wealth is not about “you”
You will get rich by giving society what it wants but does not yet know how to get. At scale.
Notice how it is about giving others what they want. Not about what you want.
Many people are not rich because they focus on themselves. As Gary Vaynerchuk would often say, the market doesn’t care about what you want. It only cares about what you can give it. If you can give it what you want, you will be rewarded.
#5 – Don’t be limited to “traditional” career options
The internet has massively broadened the possible space of careers. Most people haven’t figured this out yet.
These days there is a niche market for just about anything.
All you need to find is an intersection between a passion you have and a need in the market.
Chris Guillabeu talks in depth about this in his book The $100 Startup.
#6 – Keep a healthy learning attitude
Here are some timeless subjects Naval recommends to study.
Study microeconomics, game theory, psychology, persuasion, ethics, mathematics, and computers.
#7 – Avoid “shortcuts” and get-rich-quick schemes
There are no get-rich-quick schemes. Those are just someone else getting rich off you.
Remember that each shortcut you attempt to take will most likely end up being a “longcut” for lack of a better word. You will end up on a detour that distracts you from your original path.
#8 – You have to be willing to stay the course
Apply specific knowledge, with leverage, and eventually you will get what you deserve.
As the saying goes, 80% of success is just showing up. Each and every day. Again and again. Eventually you will “reap what you sow.”
Play long-term games. All the returns in life, whether in wealth, relationships, or knowledge, come from compound interest.
#9 – Technology is the Great Polarizer
Technology democratizes consumption but consolidates production. The best person in the world at anything gets to do it for everyone.
Because consumption is democratized, everyone has access to endless consumption (think YouTube, social media (Twitter, FB, Instagram, etc), Netflix, etc.). Never before in human history have we had more access to entertainment.
But at the same time never before has there been an opportunity for a producer to reach people in the world no matter where they live.
This is what I meant when I called technology the Great Polarizer because you have one group of people consuming more than ever before and on the other hand another group producing and reaching more people than ever before.
#10 – Keep working on your sales skills
There’s such a thing as “a natural” in sales. You run into them all the time in startups and venture capital. When you meet someone who is a natural at sales, you just know they’re amazing. They’re really good at what they do. That is a form of specific knowledge.
Obviously they learned somewhere, but they didn’t learn it in a classroom setting. They learned probably in their childhood in the school yard, or they learned negotiating with their parents. Maybe some is a genetic component in the DNA.
But you can improve sales skills. You can read Robert Cialdini, you can go to a sales training seminar, you can do door-to-door sales. It is brutal but will train you very quickly. You can definitely improve your sales skills.
#11 – Find something that you can uniquely win at
Become the best in the world at what you do. Keep redefining what you do until this is true. No one can compete with you on being you.
Most of life is a search for who and what needs you the most.
These are things you don’t even consider a skill, but people around you notice.
These are things that look like work to others, but feel like play to you.
Naval emphasises that you must focus on the thing you are really into. This is found by pursuing your inner talents, your genuine curiosity and your passion.
And here’s the kicker.
If you’re not 100 percent into it, somebody else who is 100 percent into it will outperform you. And they won’t just outperform you by a little bit—they’ll outperform you by a lot because now we’re operating the domain of ideas, compound interest really applies and leverage really applies.
#12 – Build or buy equity in a business
If you don’t own a piece of a business, you don’t have a path towards financial freedom.
This is the distinction between owning a piece of a business versus renting out your time for a fixed wage.
WIth the latter, your inputs are tied very closely to your outputs. When you’re sleeping, you’re not earning. When you’re on vacation, you’re not earning. Plus you can’t earn nonlinearly.
In contrast, owning equity means you own the upside. There is no limit on what you can earn and what you earn isn’t directly tied to your time. Just look at Jeff Bezos and Bill Gates. They both have 24 hours a day just like everyone else.
#13 – Bonus – a few powerful one-liners I took note of
- Productize yourself.
- Escape competition through authenticity.
- The most important skill for getting rich is becoming a perpetual learner.
- Intentions don’t matter. Actions do. That’s why being ethical is hard.
- Be very thoughtful and realize in most things what you’re trying to do is find the thing you can go all-in on to earn compound interest.
- Realize that in modern society, the downside risk is not that large.
- Follow your intellectual curiosity more than whatever is “hot” right now.
What do you think?
What do you think of these tips wealth building tips from Naval Ravikant? Which was your favorite? Do you have any to add? I’d love to hear your thoughts and stories in the comments or tweet me @AvidBookReadr.
If you liked this week’s ideas, please consider reading the entire book to get the full context, meaning and nuance. As always, happy reading! 📚
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