Tim Denning: This is the Best Money Advice Ever
How to Get Rich (without luck)
His cryptic words arrived as a series of tweets. They came from a user on Twitter known as Naval:
The mysterious user is Naval Ravikant, an Indian entrepreneur and investor. He founded AngelList before helping launch over 200 companies like Uber, Clubhouse, Stack Overflow and even Twitter itself.
One day, for no apparent reason, he posted his best money-making advice. Medium’s own Tim Denning said in a recent email: “The best advice I ever got about money came from Naval Ravikant. I insist you read “How to Get Rich (without getting lucky).”
Here it is! All quotes are from Naval.
“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.”
Naval advises creating systems that build wealth, rather than chasing money or status.
“Understand that ethical wealth creation is possible. If you secretly despise wealth, it will elude you.”
Many of us hold limiting beliefs that money is evil, forgetting that it’s actually the love of money that is considered evil. We need to drop this limiting belief before we can expect to build wealth.
“Ignore people playing status games. They gain status by attacking people playing wealth creation games.”
This is a warning to avoid social ladder climbers, and rather focus on the people building actual systems of wealth.
“You’re not going to get rich renting out your time. You must own equity – a piece of a business – to gain your financial freedom.”
Example: it’s better to create a video series that people can watch anytime, rather than do live videos where you have to be there for each audience.
“You will get rich by giving society what it wants but does not yet know how to get. At scale.”
Naval gave people ride-sharing before they even knew they needed it, then the new company he helped start scaled the heck out of it: Uber.
“Pick an industry where you can play long term games with long term people.”
Interesting, this would seem to imply it’s all about creating long-term relationships rather than quick plays.
“The Internet has massively broadened the possible space of careers. Most people haven’t figured this out yet.”
This means it’s still early to launch your own course, start creating your own e-books and getting your wisdom’s out there in this new land of digital opportunity.
“Play iterated games. All the returns in life, whether in wealth, relationships, or knowledge, come from compound interest.”
So perhaps it’s better to sell a membership to a website, rather than just selling a course standalone. This is because the membership will renew every month. Same if we have our money somewhere to save, we’re going to want to look at the compound interest as a wealth building tool.
“Pick business partners with high intelligence, energy, and, above all, integrity.”
This is a good one to remember, as some businesses are lowbrow and even kind of dirty, so why get into something that will make you feel that way? Let’s build wealth in a healthy, intelligent way that’s full of integrity.
“Don’t partner with cynics and pessimists. Their beliefs are self-fulfilling.”
Our attitude toward the world affects everything, especially our own creations. What’s more, people we hang out with infect us with their attitude, so let’s choose the optimists and dreamers.
“Learn to sell. Learn to build. If you can do both, you will be unstoppable.”
This has never been more true than in the Internet age, when we can all become our own course creators and salespeople.
“Arm yourself with specific knowledge, accountability, and leverage.”
Knowledge is power.
“Specific knowledge is knowledge that you cannot be trained for. If society can train you, it can train someone else, and replace you.”
Developing your personality, innovating your ways of working and even how you use knowledge can set you apart from others.
“Specific knowledge is found by pursuing your genuine curiosity and passion rather than whatever is hot right now.
This is a huge one, as many wonder whether they should write about their passions, or what they think will make the money. Clearly, navel is saying you should follow your own genuine curiosity and passion. That’s because the excitement will be reflected in your writing and other creations, which will give it a much higher chance of taking off.
“Building specific knowledge will feel like play to you but will look like work to others.”
When you’re doing something you love, you won’t really work a single day. But everyone else will see you working harder than most 9 to 5’ers.
“When specific knowledge is taught, it’s through apprenticeships, not schools.”
I think of a guru, or a mentor — rather than a big institution — which fosters genius.
“Specific knowledge is often highly technical or creative. It cannot be outsourced or automated.”
This is critical in the age of artificial intelligence, when people worry that bots will be replacing humans.
“Embrace accountability, and take business risks under your own name. Society will reward you with responsibility, equity, and leverage.”
Don’t be afraid to put your name behind things, life is all about getting out there and taking risks. Otherwise, what are we here for?
“The most accountable people have singular, public, and risky brands: Oprah, Trump, Kanye, Elon.”
I have to laugh at this one, seeing all the controversy surrounding Trump, Kanye and Elon. Still, his point stands.
“Give me a lever long enough, and a place to stand, and I will move the earth.” – Archimedes
This one flows right into the next tweet:
“Fortunes require leverage. Business leverage comes from capital, people, and products with no marginal cost of replication (code and media).”
Digital products are a great way to build wealth.
“Labor means people working for you. It’s the oldest and most fought-over form of leverage. Labor leverage will impress your parents, but don’t waste your life chasing it.”
Sometimes it’s better to have your own product that sells on its own, rather than having to also manage salesforce to sell your product.
“Capital and labor are permissioned leverage. Everyone is chasing capital, but someone has to give it to you. Everyone is trying to lead, but someone has to follow you.”
Find partners who want to follow the trail your blazing, but this one is really best juxtaposed with the next tweet:
“Code and media are permissionless leverage. They’re the leverage behind the newly rich. You can create software and media that works for you while you sleep.”
Code and media have no shipping fees, can be replicated forever and can sell 24/7 through automated processes.
“An army of robots is freely available – it’s just packed in data centers for heat and space efficiency. Use it.”
The web servers of a datacenter are ready at your command.
“If you can’t code, write books and blogs, record videos and podcasts.”
We hear this all the time here on Medium, right? Well here it is again…
“Leverage is a force multiplier for your judgement.”
A reminder to use good judgment, so what you multiply is also good.
“Judgement requires experience, but can be built faster by learning foundational skills.”
We hear a lot about how important real world experiences, but naval is here reminding us to learn those foundational skills as well, whether it be how to write well, or code well, or even how to interact with people well.
“There is no skill called ‘business.’ Avoid business magazines and business classes.”
Finally, navel is reminding us to focus on what matters, which is our skill set, not chasing money and status which is often the main point of business magazines and classes.
One user ask Dave L if all this came to him in a stream of consciousness, to which he replied:
“I’ve had the ideas for decades, and have articulated a few of these concepts before. But it all came together recently in a moment of inspiration.”
Big thanks to Naval for openly sharing the concepts that made him seem so “lucky,” while really he just had a genius perspective and solid game-plan.