How to get rich without getting lucky (notes)
October 2021

My notes and additions from a twitter thread created by @naval on 31 May 2018.

Background

  1. Seek wealth, not money or status.

  2. Wealth is having assets that earn while you sleep.

  3. You must own a piece of a business - you wont get rich by renting out your time.

  4. You will get rich by giving society what it wants but doesn’t know how to get. At scale.

  5. Money is how we transfer time and wealth.

  6. Status is your place in the social hierarchy.

  7. Understand that ethical wealth creation is possible. If you secretly despise wealth, it will elude you.

  8. Ignore people playing status games.

Actions

  1. Learn to sell. Learn to build. If you can do both, you will be unstoppable.

  2. Arm yourself with specific knowledge, accountability, and leverage.

  3. Pick an industry where you can play long term games with long term people.

  4. Maximise positive feedback loops. Design and defend against negative feedback loops.

  5. All the returns in life, whether in wealth, relationships, or knowledge, come from positive feedback loops, or compounding.

  6. The internet has massively broadened the possible space of careers. Most people haven’t figured this out yet. Write down some examples.

  7. Play games where you iterate on past successes and experiences to create more success and more experience. This is compounding.

  8. Pick business partners with high intelligence, energy, and, above all, integrity.

  9. Knowledge is not the same as intelligence. Its hard to estimate higher levels of expertise relative to your own. Additional knowledge can make someone look intelligent, but you can’t know if it would take 100, 1000 or 10,000 hours to acquire their knowledge.

  10. Don’t partner with cynics and pessimists. Their beliefs are self-fulfilling.

Specific Knowledge

  1. Building specific knowledge will feel like play to you but will look like work to others.

  2. Specific knowledge is often highly technical or creative. It cannot be outsourced or automated.

  3. Specific knowledge is found by pursuing your genuine curiosity and passion rather than whatever is hot right now.

  4. Specific knowledge is knowledge that you cannot be trained for. If society can train you, it can train someone else and replace you.

  5. When specific knowledge is taught, it’s through apprenticeships, not schools.

Accountability

  1. Embrace accountability, and take business risks under your own name. Society will reward you with responsibility, equity, and leverage.

  2. The most accountable people have singular, public, and risky brands: Oprah, Trump, Kanye, Elon.

Leverage - capital, people, no marginal costs

  1. Give me a lever long enough, and a place to stand, and I will move the earth.” - Archimedes

  2. Capital means money. To raise money, apply your specific knowledge, with accountability, and show resulting good judgment.

  3. Fortunes require leverage. Business leverage comes from capital, people, and products with no marginal cost of replication (code and media).

  4. 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.

  5. 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.

  6. 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.

  7. An army of robots is freely available - it’s just packed in data centers for heat and space efficiency. Use it.

  8. If you can’t code, write books and blogs, record videos and podcasts.

  9. Leverage is a force multiplier for your judgement. - this seems related to comments by Geoffrey Hinton about developing your intuitions interview. Search through the article for all the mentions of intuition.

Learning and practice

  1. Apply specific knowledge with leverage, and progress is inevitable.

  2. You should be too busy to “do coffee”, while still keeping an uncluttered calendar.

  3. 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.

  4. Who you work with and what you work on are more important than how hard you work.

  5. Work as hard as you can.

  6. Thinking your own thoughts is tiring. Asking good questions is hard.

  7. Doing is faster than watching.

  8. Developing good judgement requires experience, if you have a chance to gain real experience then take it. Learning can amplify the benefits of experience.

  9. Real experience is more useful than a prestigious course or degree.

  10. Be patient and persistent, shape your circumstances. It doesn’t mean you’ve made a mistake if you can’t do something real right now.

  11. There is no skill called business. Avoid business magazines and business classes. Think about why and extend this to other media.

  12. Passive, peace-meal knowledge acquisition by itself does not lead to specific knowledge or expertise. Subscribing to newsletters or social media accounts offers quickly diminishing returns, at best.

  13. Read long-form media which you actively looked for. Information that comes to you for free has competing interests which put you second.

  14. If you read only 1 book on a subject then you’ll likely be a clone. If you read 2 books you’ll grapple with confusion. Read 3 and you’ll begin to form your own substantial opinions and intuitions.

  15. Become the best in the world at what you do. Keep redefining what you do until this is true.

  16. There are no get rich quick schemes. That’s just someone else getting rich off you.

  17. Study microeconomics, game theory, psychology, persuasion, ethics, mathematics, and computers. Real experience with skin in the game will teach you more than a book or a professor.

  18. There are lots of ways to grow beyond being a beginner, but no one can do the heavy-lifting for you. A course or product that offers to teach you specific knowledge will give diminishing returns. The more of a beginner you are, the better the course will appear.

  19. Reading is faster than listening.

Remember why

  1. When you’re finally wealthy, you’ll realize that it wasn’t what you were seeking in the first place. But that’s for another day.

  2. Check in with your 70 year old self, and your 10 years older self. What do they think of you now? Are they sympathetic? Proud? Do they say go faster, or slow down? Be kind to yourself.

  3. There is a big difference between saying “I am intimidated” and “I am feeling intimidated”. You can do it.

My top 2:

  1. Embrace accountability, and take business risks under your own name. Society will reward you with responsibility, equity, and leverage.

  2. Capital means money. To raise money, apply your specific knowledge, with accountability, and show resulting good judgment.