the almanack of naval ravikant summary

Book Summary: The Almanack of Naval Ravikant by Eric Jorgenson

The Book in Three Sentences

In this summary of The Almanack of Naval Ravikant, you’ll learn ten years’ worth of teachings from interviews, podcasts, and tweets. Naval Ravikant is an investor, philosopher, and entrepreneur. Through Naval’s words, you can learn how to be happy and wealthy.

The Almanack of Naval Ravikant Summary

The Navalmanack was created from transcripts, tweets and talks, blog posts, and podcasts. For those unfamiliar, Naval is the CEO of and co-founder of and Epinions. He’s also an angel investor who invested in Twitter, Uber, Yammer, and Open Ons, and a Silicon Valley icon. More importantly, he’s successful and happy.

Naval grew up in a single-parent house. His mother worked while he and his brother went to school. They immigrated to the US, but his father’s pharmacist degree wasn’t accepted, and had to work in a hardware store instead. Naval’s parents eventually split up. He went to school and then spent the day in the library until it closed. Naval delivered Indian food when he was fifteen. He got into Stuyvesant high school, then into an Ivy League college. At Dartmouth, Naval studied economics and computer science. After college, he got into the tech industry and he now works as an investor.

Part I: Wealth

According to Naval, being wealthy is a skill set that anyone can develop. Getting rich is more about understanding, than working hard.

A tweetstorm is a series of concise, information-dense, high-impact, and timeless tweets that can be developed into a much longer conversation. Here’s Naval’s tweetstorm on how to get rich.

How to get rich (without getting lucky):

  • Seek wealth, not money. Wealth is about assets that earn while you sleep.
  • Ethical wealth creation is possible.
  • Ignore people playing status games
  • To gain financial freedom you must give society what it wants but doesn’t know it wants.
  • The industry you choose can play long-term games with long term-people.
  • The internet has broadened the space of careers.
  • All the returns in life come from compound interest.
  • Business partners should be cynical or pessimistic.
  • Learn to sell and learn to build.
  • Learn specific knowledge, have accountability and leverage.
  • You can’t train something for specific knowledge.
  • Specific knowledge is found through curiosity and passion.
  • Building specific knowledge feels like playing to you and working to others.
  • You can’t learn specific knowledge at school.
  • Specific knowledge can’t be outsourced or automated.
  • Take risks under your name.

Fortune requires leverage.

Capital means money.

Labor means people working for you.

Capital and labor are permission leverage.

Code and media are permissionless leverage.

Use data centers to your advantage.

  • If you can’t code, write books or blogs, and record videos or podcasts.
  • To build judgment faster, learn foundational skills.
  • Business is not a skill you learn in class or in magazines.
  • Study microeconomics, game theory, psychology, persuasion, ethics, mathematics, and computers.
  • Be too busy for coffee and still keep an uncluttered calendar.
  • Set a personal hourly rate. If fixing a problem saves less than your hourly rate, ignore it. If outsourcing a task costs less than your hourly rate, outsource it.
  • Work hard.
  • Get-rich-quick schemes don’t exist.
  • Apply specific knowledge with leverage.
  • You don’t seek wealth really. You’ll realize it when you’re wealthy.

Naval says “productize yourself”. By this, he combines uniqueness, leverage, accountability, and specific knowledge.

The difference between wealth and money is that by using money, we transfer wealth. This is what society gives you in return for providing value. Wealth is what you want, the assets you earn while you sleep. The factory that keeps producing. To be wealthy, you have to figure out what society wants but doesn’t have yet. Then you have to figure out how to produce more than one.

There’s no such thing as being a “natural”. This is a form of specific knowledge. It can’t be taught, but it can be learned. Other examples include musical talents which allow someone to pick up any instrument, an obsessive personality which allows someone to remember things quickly, a love for science fiction which allows someone to absorb knowledge quickly, playing video games which allows someone to have a grasp of game theory, or gossiping which allows someone to understand the basics of journalism. This is usually part of your personality and your identity. Pursue your innate talents, your genuine curiosity, and your passions.

If you’re competing with someone, it’s because you’re copying them. Avoid this by being authentic.

The best skill you can have to get rich is to become a perpetual learner. Teach yourself how to learn what you want to learn. If you read a book you don’t understand, think about the foundation you need to learn it.

Compounding in business relationships is important. This happens in a reputation you child over time and people notice. When you find the right thing and the right people, invest deeply

To get rich, you need leverage. To get leverage, you need to get credibility. This is a double-edged sword, if you do things under your own name, you can: 1) fail and be the one to get your capital back or 2) reap the rewards.

Owning equity in a business is important to becoming rich because it gives you financial freedom and you get passive income.

Follow your curiosity, this gives you the foundation for a career.

Do the things for their own sake. This is how you create your best work. Build your brand by giving away free work.

There are three kinds of leverage:

  1. Labor: other people working for you. The worst way of leverage. It’s messy, it requires leadership skills.
  2. Money: it’s more modern. People have been using it for the last century to get rich.
  3. Products with no marginal costs of replication: books media, movies, and code. Build a product and then sell it.

Credibility around judgment is important. Build a reputation. This means you can be trusted.

Prioritize and focus. Don’t waste your time.

Two big problems in life:

  • Money
  • Status game: to win this game, you have to put other people down.

The three big decisions you make in life:

  • Where you live
  • Who you’re with
  • What you do

To surround yourself with successful people, figure out what you’re good at, help others with it, and give it away.

Work should feel like play. Once you’re tired of the game, you want freedom

Retirement is when you stop sacrificing today for an imaginary tomorrow. There are three ways to get there:

  • Your passive income covers your burn rate.
  • Your burn rate goes down to zero
  • You do something you love so much, it’s not even about the money

Art is creativity, doing something for its own sake. Money is a side effect of the love you put into a product or business.

Freedom is Naval’s number one value.

Factor luck out of the equation. There are four kinds of luck.

  1. Blind luck: something out of your control happens.
  2. Luck through persistence: you generate so much force and energy that lucks finds you.
  3. You become good at spotting luck: you notice a lucky break.
  4. Luck finds you: this is the hardest kind, people approach naturally and luck fades.

Business networking is a waste of time. When people spend too much time talking about their own values, they’re covering for something. Be careful about the actions you’re not going to be proud of, they’ll damage you.

Great people have great outcomes, you just have to be patient. You need:

  • Time
  • Specific knowledge
  • Leverage
  • An authentic skillset

All of this puts you in a position to be the best in the world at what you do. You just have to enjoy it and keep doing it, but don’t keep track and don’t keep count because you’ll run out of time. This can be the hardest thing you can do, but it’ll be rewarding. What’s been given to you has no value, real value comes from sacrifice and work.

Money solves money problems. It won’t make you happy, it’s not going to make you healthy, and it’s not going to make everything great. When your whole purpose is to make money, you work hard, you become highly competitive, and you’re anxious. If this is your default for decades, you can’t simply turn it off. When you’re rich, you have to learn how to be happy. So try to get rich first.

If you want to maximize the amount of money you make, study technology, design, and art. Become really good at something.

Hard work is overrated. Judgment is underrated. Judgment represents the long-term consequences of your actions and making the right decision to capitalize on that. Putting the time is important, but judgment is more important because it determines the direction you’re headed.

The smartest people can explain complex concepts to a child. If you can’t explain something to a child, you don’t know it. It’s better to understand the basics of something than complicated concepts you can stitch together. If you can’t relate something to the basics, you’re lost, you’re memorizing.

You need empty space in your calendar to be able to think. This lets you come up with ideas for your business, have good judgment, and be bored.

Our ego is constructed in our first two decades, we then spend the rest of our lives trying to make our ego happy.  Our ego is how we interpret new things. Create, get rid of, and adapt habits because they make who you are.

Be suspicious of certain beliefs that come in “bundles” (religions, political parties, and so on). Reevaluate them from base principles.

For important decisions, don’t rely on memory and identity. Your focus should be on the problem.

Praise specifically, criticize generally.

Decision-making is everything.

Collect mental models. Principles and mental models for memory prediction :

  • Evolution: civilization exists for mating.
  • Inversion: don’t say what’s going to work. Say what won’t.
  • Complexity theory: we are ignorant and bad at predicting the future.
  • Economics: you have to understand supply and demand, labor-versus-capital, and game theory to understand capitalism.
  • Principal-agent problem: if you want it done right, do it yourself. When you’re the principal, you care and do things well. When you’re the agent and you represent someone else, you’re careless.
  • Compound interest: how something scales over time to end up with thousands of times your money.
  • Basic math: your basic math should be good.
  • Black swans: these are extreme probabilities.
  • Calculus: useful to know in the business world.
  • Falsifiability: for something to be true, it should have predictive power, and it must be falsifiable.
  • If you can’t decide, the answer is no: there are many options. You shouldn’t rely on a spreadsheet to make a decision.
  • Run uphill: if you have two options that seem relatively equal, take the more difficult and more painful in the short term. Long-term gain is what you want and to achieve it, you need short-term pain. For example: exercising.

In order to build new mental models, read a lot, especially science, math, and philosophy. Genuine love for reading is a superpower. Every book ever written is easily accessible. The means of learning are abundant. The desire to learn, on the other hand, is scarce. Making reading a habit is important. What you actually read isn’t that important.

Naval doesn’t believe in delayed gratification when there are so many great books. The number of books you read is unimportant, the more you read, the more books you’ll leave unfinished.

Read math, science, and philosophy. Ignore news and contemporaries. Once you’ve mastered math and science, you can read anything. No book should scare you, even the ones you don’t understand. Read what’s difficult. Then re-read it. This builds mental muscles. You’re learning how to learn. Try to read the right things in the right order. Your foundation is very important. Start with maths, science, and microeconomics. Read the classics. Read the originals, not some relative work. Nowadays it’s difficult to read because our attention spans have shrunk. Also, we were taught to finish books because books are supposed to be sacred. When someone recommends a book, buy it.

Part II: Happiness

The most things we value in life are wealth, health, and happiness and in that other. Their importance is in reverse.

Happiness is the state when nothing is missing, this is the absence of desire for external things. In nature, happiness doesn’t exist. Everything is perfect the way it is. Accept you can’t change your external environment. Be indifferent to things outside of your control.

Happiness, love, and passion are choices you make.

You can destroy your happiness if you waste too much time thinking about the future. Don’t compare things from the past to the present.

Happiness is about peace. Sometimes you’re just thinking about the next thing, creating constant anxiety. Anxiety, a series of running thoughts, makes you unhappy. To fight anxiety, acknowledge it and try to focus on having peace instead of having thoughts.

You can’t be happy because of an external circumstance. This is a delusion. Try not to have more than one desire at a time. This is the area where you choose to be unhappy.

Happiness is internal. The most successful people are those that don’t play the game, the ones that step out of it completely.

The word “should” implies guilt or social programming. It means doing something you don’t want to do.

Peace and happiness are skills. To be happy, you can build happiness around it: avoid alcohol, avoid sugar, avoid social networks, playing games for a short time. Replace bad thoughts with good ones.

To handle conflict: don’t hang around conflictive people.

Happiness habits:

  • Meditation.
  • Be aware of every moment.
  • Get more sunlight.
  • Ask yourself if your desires are important.
  • Avoid caffeine.
  • Exercise.
  • Don’t judge others.
  • Tell everyone you’re a happy person.
  • Minimize the use of these apps: iPhone, Calendar, and Alarm Clock.
  • Don’t have secrets.
  • Cut down on activities that require screens.
  • Do things out of interest, not obligation.
  • Stay optimistic.
  • Engage in positive-sum games.

Changing habits:

  • Pick one thing.
  • Plan a sustainable path.
  • Track.
  • Have self-discipline.

In any situation in life, you have three options:

  1. You can change it (desire leads to suffering)
  2. Accept it
  3. Leave it

Pick one big desire in life, picking two would be too distracting.

Being peaceful comes from clearing your mind of thoughts. Constantly tell yourself to accept things.

Find the positive in the minor annoyances.

Death brings meaning to your life. Never forget that you’re going to die one day and nothing you do or don’t won’t matter. So enjoy life and live the moment.

No one can make you healthy, slim, smart, calm, rich, or fit. No one but you. Save yourself.

Be you. Listen and absorb, but don’t emulate.

Naval’s number one priority is health. Second: mental health. Third: spiritual health. Fourth: family’s health. Fifth: family’s well-being.

For your diet, avoid the combination of fat and sugar.

Naval’s daily morning workout is the habit that has had the most positive impact on his life. “I don’t have time” means that it’s not a priority.

Exercising is a short-term sacrifice with long-term benefits. Avoid easy choices because they’ll make your life harder.

The cold is important because it activates the immune system. Our suffering comes from avoidance.

Naval prefers choiceless awareness or nonjudgemental awareness. This is a kind of meditation where you accept the moment without making judgments. In transcendental meditation, you use repetitive chanting to create white noise and bury your thoughts. Close your eyes for an hour a day. Whatever happens, happens.

Habits have power. With enough time, you can pick up good habits or get rid of bad ones.

Create an environment around you where you’re likely to succeed. Be the best version of yourself. Never leave something you want to do for later.

Don’t read for social approval. Read the original source, not a regurgitated version.

Naval’s principles he’d like to pass down to his kids:

  1. Read. Read for the sake of reading. There’s no such thing as junk.
  2. Build the skills of mathematics and persuasion.

Time is more important than anything else. Remember it’s not a waste of time if you’re doing what you want. You’re not responsible for making others happy. Be happy and people will ask you your secret and learn from you.

  • Freedom from anger. Anger is the precursor to violence. Observe anger.
  • Freedom from employment. Control your own fate.
  • Freedom from uncontrolled thinking. Your mind shouldn’t be a master.

What’s the meaning of life?

  1. It’s personal: you have to find your own answer.
  2. There’s no meaning.
  3. There’s a meaning to life, but not a satisfying one. We’re all one thing, indistinguishable from one another.

Naval values:

  • Honesty
  • Only work on things that have long-term benefits.
  • Only believe in peer relationships (no hierarchy of any kind)
  • Anger is a problem

Buddhism but with science and evolution. Reject everything you can’t verify.

There’s nothing but now.

Further Reading

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