How to Get Rich Without Getting Lucky: Lessons from Naval Ravikant
Back in 2018, Naval Ravikant posted a tweet on How to Get Rich (Without Getting Lucky).
Growing up, we form belief systems based on our environment (family, friends, location, etc) which are often self-imposed and stem from past experiences or social conditioning.
Limiting beliefs can be particularly harmful because they prevent us from taking action toward our goals or pursuing new opportunities. They can also cause us to feel stuck in our current situation and prevent us from making positive changes in our life.
Many of us dream of being rich and achieving financial freedom. However, for most people, this remains a distant dream. They work hard and save money but never seem to make significant progress toward their goals. In this article, we’ll explore the insights shared by tech investor and entrepreneur, Naval Ravikant, on how to get rich without getting lucky by reenvisioning the way we define wealth.
Seek Wealth, Not Money or Status
According to Ravikant, wealth is having assets that earn while you sleep, while money is how we transfer time and wealth. Status, on the other hand, is our place in the social hierarchy. Therefore, if you want to get rich, focus on building wealth, not just earning money or seeking status.
To build wealth, you need to invest in assets that can generate passive income. This can include things like rental properties, stocks, bonds, or businesses that can operate without your direct involvement. The key is to find assets that can grow in value over time and generate income without requiring your constant attention.
Understand Ethical Wealth Creation is Possible
Many people hold the belief that becoming wealthy is unethical or involves taking advantage of others. However, Ravikant emphasizes that ethical wealth creation is possible. If you hold a negative view of wealth, it may elude you, but if you believe in your ability to create wealth in a responsible and ethical manner, you can achieve it.
Ignore Status Games
Many people play status games, seeking to climb the social hierarchy and gain recognition and approval from others. However, Ravikant advises ignoring these games and focusing on wealth creation. Those who attack others playing wealth-creation games are often just trying to boost their own status and should be disregarded.
Owning Equity is Key
Ravikant believes that you won’t get rich renting out your time. Instead, you must own equity in a business to achieve financial freedom. This means owning a piece of a business that can generate income without your direct involvement.
To achieve this, you may need to start your own business or invest in someone else’s. However, owning equity in a business is crucial to building long-term wealth and achieving financial freedom.
Give Society What it Wants, but Doesn’t Yet Know How to Get
To get rich, you need to provide something that society wants but doesn’t yet have. This could be a product, service, or even a new way of thinking about a particular issue. However, it must be something that can be scaled and provided to a large number of people.
To achieve this, you need to identify an industry or market where you can play long-term games with long-term people. This means focusing on industries or markets that have sustainable demand and where you can build lasting relationships with customers or clients.
The Internet Has Broadened Career Opportunities
The internet has dramatically expanded the possibilities for career paths and entrepreneurship. You no longer need to be limited to traditional careers or industries to achieve financial success. Instead, you can explore opportunities online, including starting your own business or creating digital products.
Play Iterated Games
All the returns in life, whether in wealth, relationships, or knowledge, come from compound interest. Therefore, it’s important to play iterated games, where small actions taken consistently over time can result in significant gains. This applies not just to financial investments but also to relationships and personal development.
Pick Business Partners with High Intelligence, Energy, and Integrity
When starting a business or investing in one, it’s important to choose partners with high intelligence, energy, and integrity. These are the people who can help you build a successful business and weather the inevitable challenges that arise along the way.
Don’t Partner with Cynics and Pessimists
On the flip side, Ravikant warns against partnering with cynics and pessimists. These people are often negative and defeatist in their thinking, and their beliefs can be self-fulfilling. Instead, surround yourself with people who are positive, motivated, and share your vision for success.
Learn to Sell and Build
To succeed in business, you need to learn two critical skills: selling and building. Selling is about persuading people to buy what you’re offering, whether it’s a product or service. Building is about creating something of value that people want to buy. If you can do both, you’ll be unstoppable in your pursuit of wealth.
Arm Yourself with Specific Knowledge, Accountability, and Leverage
To achieve success in any field, you need three things: specific knowledge, accountability, and leverage. Specific knowledge is knowledge that you cannot be trained for, and it comes from pursuing your genuine curiosity and passion. It’s the unique expertise that sets you apart from others in your field.
Accountability means taking responsibility for your actions and the outcomes of your decisions. This includes taking business risks under your own name and embracing the consequences of those risks.
Finally, leverage comes from having access to capital, people, or products that can be replicated without incurring additional costs. This includes code and media, which can be created once and sold many times without additional effort.
Building Specific Knowledge is Key
Building specific knowledge is essential to achieving success in any field. This means pursuing your genuine curiosity and passion and developing expertise that cannot be easily replicated. According to Ravikant, specific knowledge will feel like play to you but look like work to others.
When specific knowledge is taught, it’s often through apprenticeships rather than schools. This is because specific knowledge is highly technical or creative and cannot be outsourced or automated.
Embrace Accountability and Take Business Risks
To achieve wealth, you need to embrace accountability and take business risks under your own name. This means taking responsibility for the outcomes of your decisions and embracing the consequences, whether positive or negative.
The most accountable people have singular, public, and risky brands. This includes people like Oprah, Trump, Kanye, and Elon, who have taken bold risks and built successful brands around their names.
Leverage is Essential
Fortunes require leverage, which comes from having access to capital, people, and products that can be replicated without additional cost. This includes code and media, which can be created once and sold many times without incurring additional effort.
To raise capital, you need to apply your specific knowledge and show good judgment. You also need to understand that labor is permissioned leverage, meaning that someone has to give it to you. Instead, focus on permissionless leverage, such as code and media, which can be created without anyone’s permission.
Conclusion
Achieving wealth and financial freedom is possible, but it requires a long-term, strategic approach. By focusing on building wealth, playing long-term games, embracing accountability, and leveraging specific knowledge, you can create opportunities for success and achieve your financial goals.
The insights shared by Naval Ravikant provide a roadmap for achieving financial success without relying on luck or chance. By studying and applying these lessons, you can build a foundation for long-term wealth and success.
