The Almanack of Naval Ravikant || notes from the book

This book had huge influence on what I’m aiming for in life. It’s an easy read – and free to read! – you can download here: https://www.navalmanack.com/

My highlights below:

Wealth

Building wealth

• Getting rich is about knowing what to do, who to do it with, and when to do it.
• 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.
• Pick an industry where you can play long-term games with long-term people.
• Play iterated games. All the returns in life, whether in wealth, relationships, or knowledge, come from compound interest.
• Pick business partners with high intelligence, energy, and, above all, integrity.
• Specific knowledge is found by pursuing your genuine curiosity and passion rather than whatever is hot right now.
• Fortunes require leverage. Business leverage comes from capital, people, and products with no marginal cost of replication (code and media).
• If you can’t code, write books and blogs, record videos and podcasts.
• Set and enforce an aspirational personal hourly rate. If fixing a problem will save less than your hourly rate, ignore it. If outsourcing a task will cost less than your hourly rate, outsource it.
• Well, if you’re not already good at it or if you’re not really into it, maybe it’s not your thing—focus on the thing that you are really into.
• “Escape competition through authenticity.” Basically, when you’re competing with people, it’s because you’re copying them. It’s because you’re trying to do the same thing. But every human is different. Don’t copy. [78]
• If you are fundamentally building and marketing something that is an extension of who you are, no one can compete with you on that.
• The most important skill for getting rich is becoming a perpetual learner. You have to know how to learn anything you want to learn.
• Compounding in business relationships is very important. Look at some of the top roles in society, like why someone is a CEO of a public company or managing billions of dollars. It’s because people trust them. They are trusted because the relationships they’ve built and the work they’ve done has compounded.
• To get rich, you need leverage. Leverage comes in labor, comes in capital, or it can come through code or media. But most of these, like labor and capital, people have to give to you. For labor, somebody has to follow you. For capital, somebody has to give you money, assets to manage, or machines.
• If you are paid for renting out your time, even lawyers and doctors, you can make some money, but you’re not going to make the money that gives you financial freedom.
• Following your genuine intellectual curiosity is a better foundation for a career than following whatever is making money right now. [11]
• I was basically telling people, “I’m retired, I’m not working.” Then, I had the time for whatever was my highest valued project in front of me. By doing things for their own sake, I did them at their best. [74]
• If they can train you to do it, then eventually they will train a computer to do it.
• Think about what product or service society wants but does not yet know how to get. You want to become the person who delivers it and delivers it at scale. That is really the challenge of how to make money.
• Code is probably the most powerful form of permissionless leverage. All you need is a computer—you don’t need anyone’s permission. [1]
• Whenever you can in life, optimize for independence rather than pay.
• What you want in life is to be in control of your time. You want to get into a leveraged job where you control your own time and you’re tracked on the outputs. If you do something incredible to move the needle on the business, they have to pay you. Especially if they don’t know how you did it because it’s innate to your obsession or your skill or your innate abilities, they’re going to have to keep paying you to do it.
• Stay out of things that could cause you to lose all of your capital, all of your savings. Don’t gamble everything on one go. Instead, take rationally optimistic bets with big upsides. [78]
• CEOs are highly paid because of their leverage. Small differences in judgment and capability really get amplified. [2]
• Value your time at an hourly rate, and ruthlessly spend to save time at that rate. You will never be worth more than you think you’re worth.
• Another way of thinking about something is, if you can outsource something or not do something for less than your hourly rate, outsource it or don’t do it. If you can hire someone to do it for less than your hourly rate, hire them. That even includes things like cooking. You may want to eat your healthy home cooked meals, but if you can outsource it, do that instead. [78]

Building judgement

• There are basically three really big decisions you make in your early life: where you live, who you’re with, and what you do.
• What is your definition of retirement? Retirement is when you stop sacrificing today for an imaginary tomorrow. When today is complete, in and of itself, you’re retired.
• How important is networking? I think business networking is a complete waste of time. And I know there are people and companies popularizing this concept because it serves them and their business model well, but the reality is if you’re building something interesting, you will always have more people who will want to know you. Trying to build business relationships well in advance of doing business is a complete waste of time. I have a much more comfortable philosophy: “Be a maker who makes something interesting people want. Show your craft, practice your craft, and the right people will eventually find you.” [14]
• If you want to make the maximum amount of money possible, if you want to get rich over your life in a deterministically predictable way, stay on the bleeding edge of trends and study technology, design, and art—become really good at something. [1]
• Basically, if someone is using a lot of fancy words and a lot of big concepts, they probably don’t know what they’re talking about. I think the smartest people can explain things to a child. If you can’t explain it to a child, then you don’t know it. It’s a common saying and it’s very true.
• It’s actually really important to have empty space. If you don’t have a day or two every week in your calendar where you’re not always in meetings, and you’re not always busy, then you’re not going to be able to think.
• I use my tweets and other people’s tweets as maxims that help compress my own learnings and recall them. The brain space is finite—you have finite neurons—so you can almost think of these as pointers, addresses, or mnemonics to help you remember deep-seated principles where you have the underlying experience to back it up.
• Principal-Agent Problem To me, the principal-agent problem is the single most fundamental problem in microeconomics. If you do not understand the principal-agent problem, you will not know how to navigate your way through the world. It is important if you want to build a successful company or be successful in your dealings. It’s a very simple concept. Julius Caesar famously said, “If you want it done, then go. And if not, then send.” What he meant was, if you want it done right, then you have to go yourself and do it. When you are the principal, then you are the owner—you care, and you will do a great job. When you are the agent and you are doing it on somebody else’s behalf, you can do a bad job. You just don’t care. You optimize for yourself rather than for the principal’s assets. The smaller the company, the more everyone feels like a principal. The less you feel like an agent, the better the job you’re going to do. The more closely you can tie someone’s compensation to the exact value they’re creating, the more you turn them into a principal, and the less you turn them into an agent. [12] I
• It’s very, very important we only say yes when we are pretty certain.
• If you find yourself creating a spreadsheet for a decision with a list of yes’s and no’s, pros and cons, checks and balances, why this is good or bad…forget it. If you cannot decide, the answer is no. [10]
• To think clearly, understand the basics. If you’re memorizing advanced concepts without being able to re-derive them as needed, you’re lost.

Happiness

Learning happiness

• If you have nothing in your life, but you have at least one person that loves you unconditionally, it’ll do wonders for your self-esteem. [8]
• Books make for great friends, because the best thinkers of the last few thousand years tell you their nuggets of wisdom. [8]
• For me these days, happiness is more about peace than it is about joy.
• You’ll notice when I say happiness, I mean peace. When a lot of people say happiness, they mean joy or bliss, but I’ll take peace. [2]
• 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.
• When you’re young and healthy, you can do more. By doing more, you’re actually taking on more and more desires. You don’t realize this is slowly destroying your happiness. I find younger people are less happy but more healthy. Older people are more happy but less healthy. When you’re young, you have time. You have health, but you have no money. When you’re middle-aged, you have money and you have health, but you have no time. When you’re old, you have money and you have time, but you have no health. So the trifecta is trying to get all three at once.
• Happiness is being satisfied with what you have.

Saving yourself

• At the end of the day, you are a combination of your habits and the people who you spend the most time with.
• incorrect to say you should choose your friends very wisely. But you shouldn’t choose them haphazardly based on who you live next to or who you happen to work with. The people who are the most happy and optimistic choose the right five chimps. [8]
• Choosing to Care for Yourself My number one priority in life, above my happiness, above my family, above my work, is my own health. It starts with my physical health. Second, it’s my mental health. Third, it’s my spiritual health. Then, it’s my family’s health. Then, it’s my family’s wellbeing. After that, I can go out and do whatever I need to do with the rest of the world. [4]
• We’re not meant to check our phone every five minutes.
• Sugar makes you hungry. Sugar signals to your body, “There’s this incredible food resource in the environment we’re not evolved for,” so you rush out to get sugar. The problem is the sugar effect dominates the fat effect. If you eat a fatty meal and you throw some sugar in, the sugar is going to deliver hunger and fat is going to deliver the calories and you’re just going to binge.
• Most fit and healthy people focus much more on what they eat than how much. Quality control is easier than (and leads to) quantity control. [11]
• What habit would you say most positively impacts your life? The daily morning workout. That has been a complete game-changer. It’s made me feel healthier, younger. It’s made me not go out late. It came from one simple thing, which is everybody says, “I don’t have time.” Basically, whenever you throw any so-called good habit at somebody, they’ll have an excuse for themselves. Usually the most common is “I don’t have time.” “I don’t have time” is just another way of saying “It’s not a priority.”
• “Easy choices, hard life. Hard choices, easy life.”

Philosophy

• Caught in a funk? Use meditation, music, and exercise to reset your mood. Then choose a new path to commit emotional energy for rest of day. [11]
• Meditation is intermittent fasting for the mind. Too much sugar leads to a heavy body, and too many distractions lead to a heavy mind. Time spent undistracted and alone, in self-examination, journaling, meditation, resolves the unresolved and takes us from mentally fat to fit.
• Meditation is turning off society and listening to yourself. It only “works” when done for its own sake. Hiking is walking meditation. Journaling is writing meditation. Praying is gratitude meditation. Showering is accidental meditation. Sitting quietly is direct meditation.
• To have peace of mind, you have to have peace of body first.
• If there’s something you want to do later, do it now. There is no “later.”
• Science, to me, is the study of truth and mathematics is the language of science and nature.
• If you had to pass down to your kids one or two principles, what would they be? Number one: read. Read everything you can.
• Related to the skill of reading are the skills of mathematics and persuasion. Both skills help you to navigate through the real world. Having the skill of persuasion is important because if you can influence your fellow human beings, you can get a lot done. I think persuasion is an actual skill. So you can learn it, and it’s not that hard to do so. Mathematics helps with all the complex and difficult things in life. If you want to make money, if you want to do science, if you want to understand game theory or politics or economics or investments or computers, all of these things have mathematics at the core. It’s a foundational language of nature.
• Courage isn’t charging into a machine gun nest. Courage is not caring what other people think.
• Anyone who has known me for a long time knows my defining characteristic is a combination of being very impatient and willful. I don’t like to wait. I hate wasting time. I’m very famous for being rude at parties, events, dinners, where the moment I figure out it’s a waste of my time, I leave immediately. Value your time. It is all you have. It’s more important than your money. It’s more important than your friends. It is more important than anything. Your time is all you have. Do not waste your time.
• Don’t spend your time making other people happy. Other people being happy is their problem. It’s not your problem. If you are happy, it makes other people happy.
• Observe when you’re angry—anger is a loss of control over the situation. Anger is a contract you make with yourself to be in physical and mental and emotional turmoil until reality changes. [1]
• Freedom from Employment People who live far below their means enjoy a freedom that people busy upgrading their lifestyles can’t fathom. [11]
• All benefits in life come from compound interest, whether in money, relationships, love, health, activities, or habits. I only want to be around people I know I’m going to be around for the rest of my life. I only want to work on things I know have long-term payout.
• I like the Buddhist saying, “Anger is a hot coal you hold in your hand while waiting to throw it at somebody.” I don’t want to be angry, and I don’t want to be around angry people. I just cut them out of my life.
• If I can’t verify it on my own or if I cannot get there through science, then it may be true, it may be false, but it’s not falsifiable, so I cannot view it as a fundamental truth.