Naval Ravikant / Notes from Periscope on his Tweet storm “How to Get Rich (without getting lucky) / 6.6.18

Learn the skills to make money: Money buys you freedom in the material world. Is not gonna make you happy, not gonna solve your health problems, not gonna make your family great, not gonna make you fit or calm, but it’s gonna solve your external problems. It’s a reasonable step to go ahead and make money.

People sometimes attached to not making money, or not being happy. They feel the need to shut down these conversations. Even to gain status attacking people that are having these conversations. But these are positive-sum games, important topics. Everybody in the world can be happy. Everybody in the world can be wealthy. A matter of education, know-how and effort.

Tweet storm was only 40 out of a 100 tweets. Some were left out to stay on topic. The message was intended to be easily packaged. Some things deliberately crafted: no tweet numbers: easier to spread, more timeless / each tweet is written so it stands alone. Whole thing is very viral.

How long does it take to make money? It’s gonna take longer than you would like. Best time to start was yesterday, second best time is now. It may take a while to pay out, but when it does you will have become the kind of person that makes money. Once you’ve become that and have some comfort around it, you essentially have your freedom. While you are learning about becoming a money making machine, in 10 or 20 years a tsunami of money will hit you and you will know how its’ coming at you. The key principles to this process are timeless and they apply in general (not only to the U.S.):

  • Owning equity in a business / Ownership vs wage work
  • Compound interest
  • Passive income (business earns for you while you sleep and you’re on vacation)

Equity > own the upside // walk up to the point when you own equity. Ownership is very important.

PRODUCTIZE YOURSELF > These two words summarize the whole tweet storm. If you only can remember two words, these are they. Every time you are remembering what to do, think of these two words. Integrate them:Productize YourselfYou are going to create a product out of what you naturally do really, really well.

It’s building a product. A set of things that you uniquely know how to do, that hopefully society wants, and you can leverage and scale up. Products by their nature are leverage. “Yourself” means that you don’t need to compete at being somebody else. If you need to compete at being somebody else you’re not going to be the best in the world at it. If you’re not the best in the world at it you won’t get rewarded properly for it. Is how do you package yourself in a product. It takes decades figuring out what you can uniquely provide. It does not necessarily takes decades to execute.

Compound Interest: When you find the right thing to do, the right people to work with, create compound interest. Invest in them.

Compound interest Example: You invest $1. The first year: $1.10 / second year: $1.21 / third year: $1.32 or $1.33. Keeps adding on itself. Very powerful concept that applies to more than just capital. Microeconomics textbook > worth to read from start to finish.

Compound interest in business relationships: Top roles in society: trust. Your relationship with the work is compounded in your reputation. High integrity people.

Compound interest & relationships: After working together for 5 or 10 years> you trust each other. Then 1+1 is more than 2.

In fitness & health is the same: takes a little while to go through a growth spurt and land a new level, but once you are there, you can jump to the next level from there.

In the intellectual domain, compound interest rules.

How to escape 9 to 5?: Big problem is getting sucked into being busy. Job chews up all your time, you’re exhausted to do anything else. Key: Find a career, job or education where you will end up in a business where the Inputs and Outputs are disconnectedso the value of your work is not tied up to the input (you are not tracked by the input).

Examples: In earlier days, if you cut wood for a living, you cut wood for 4 hours and get 4 hours of cutting wood worth of output. Nowadays there are knowledge worker jobs, intellectual jobs, programming favorite example of his where a good developer can write a piece of code and make a business hundreds of millions of $$ for the next few years. Customers don’t care about inputs, they care about outcomes and outputs / Navigate towards a career where you are tracked on the output and you’ll do much betterAnother example is sales (especially high end, expensive sales, i.e. real estate) input & output are highly disconnected. Building and selling any product. Look at how closely the amount of hours put in matters (input vs output). Move towards skill sets where is hard to match input & output.

In a world of 7 billion people, can everyone do this? Absolutely. Everyone of the 7 billion people in the world can do something interesting and different, and productize.

Thought experiment: assume that everyone in the world had maximum practical knowledge. All of us maximally educated. Within 5 years robots would be doing all the manual labor, we would all be doing creative work. We would have figured out how to program machines to do everything else, and we’d do only creative work. At that point we’d be further in science and creativity.

Only a few zero-sum games left in the world. Status one of them / Clean water, automation are positive-sum games. Is possible for 7 billion people to have 7 billion products.

>Read Nassim’s “Skin in the Game” book

Learning to sell: Sales skills> form of specific knowledge. You can be trained, but there are people “natural” at sales: you just know that they are amazing at what they do. Not learned in the classroom. Learned in the school yard, negotiating with parents, some DNA components. You can improve it. A lot of it you learn just by doing, especially at a very early age.

Specific Knowledge: Figure out what you were doing as a kid and it felt effortless. You didn’t even consider it a skill, but people around you noticed (mother, best friend). It could be anything, example: sales skills, music talent, obsessive personality, love for sci fi, reading, playing lots of games, out there gossiping that could make you a great journalist.

Your unique traits from DNA + unique upbringing + your unique response to it = they build into your personality and your identity & become specific knowledge and skill sets. You can hone it.

>Read Robert Cialdini’s “Influence” Book on persuasion: how do you convince people to do things. We as humans are hardwired to fall for these strategies.

Key takeaway is CLASSR. It stands for:

CONSISTENCY: people want to be consistent with their past actions. If they did something before its wrapped it into their identity and they want to do that again. Example: Benjamin Franklin would borrow a book from a person that didn’t like him. To be consistent with their past, they will like you more if they borrowed a book to you than if they didn’t know you.

LIKE: people will be more likely persuaded by people that they like. Be nice to them.

AUTHORITY: You’re more likely to listen to a doctor about medical advice than not.

SCARCITY: Only a few of these left, is disappearing. That of which there is less of is more valuable.

SOCIAL PROOF: Monkey see, monkey do. Example: stand up in a street corner and look up and pretty soon others will be looking up with you.

RECIPROCITY: People always want to repay you. Sometimes they can’t do the math on what is worth. Example: Hare Krishna’s give you a flower or a booklet and ask for a donation. Your donation is usually more than value of booklet.

> Read Scott Adams’ “Win Bigly” book on persuasion. Learn this Art.

Study: Arithmetics, probability, statistics. Tail events, black swans, complexity theory >> Read Nassim Taleb

Basic principles of calculus are sufficient. Know how to manipulate an Excel. Learn how to manipulate numbers. Computers won’t write code. It’s a General AI Task . It’s very difficult. Not likely to be automated.

If you go to a University, learn things you cannot learn by yourself: example: mathematics, physics, medicine. Stem Disciplines. Alumni network & credentials are the other benefits.

We all have many desires in life. Lots of things we wanna do. We wanna be fit, happy, rich, with a perfect mate… The problem: when all your desires are so split up you’re creating massive amounts of anxiety, you’re losing your focus.

Pick the one thing that you care about more than anything else and ignore everything else in a rational way. Otherwise you’ll never have peace of mind. Accept the situation you have with everything else. Focus on the thing you care about. If you’re gonna make money it has to be your number one desire.If you wanna be happy, making money as a way to be happy is the wrong route. If what you want is it happiness, you want to go straight for happiness.

DECISION MAKING HEURISTICS: you decide when to use them 🙂

1. If I’m faced with a difficult choice: If you can’t decide, the answer is no.

Modern society is full of options. Biologically you’re not designed to become aware of how many choices there are. If you chose something, you get locked in for a long time. Long lived decisions. Only say yes when you are pretty certain. You’re never gonna be absolutely certain, but you’ll be pretty positive. If you’re finding yourself creating a spreadsheet with pros and cons to decide, forget it. You have to internalize it in your gut and heart, and really want something before you go for it.

2. If you have two choices to make, and they are relatively equal to you (looks 50-50), and you can’t decide:

Take the path that is more difficult and more painful in the short term. One of these paths requires short term pain, and the other maybe requires pain further out in the future. Your brain through conflict avoidance will try to push out the short term pain. By definition if the two are even and one has short term pain is gonna have long term gain. By the law of compound interest the long term gain is where you want to go towards anyway. Your brain is overvaluing the side that has the short term happiness, and avoiding the short term pain. You have to cancel that tendency, by leaning into the pain.

Most of the gains in life come from suffering in the short term, so you can gain in the long term. Example: working out can be a pain but the muscle will get sore now and in the long run get stronger. Lean into things that have short term pain and long term gain.

My trainer Jerzy Gregorek aka The Happy Body creator: Hard choices, easy life. Easy choices, hard life.” If you make the hard choice in the short term, in the long term you will have the easy life. Self-discipline.

3. Cultivating peace of mind

Precursor to happiness. Happiness cannot be chased directly. If you do, what you are cultivating is pleasure. Pleasure comes with a withdrawal symptom. Pleasure is a high and then you crash down. Pleasure is a ferris wheel: you get on, you ride it up and eventually you ride it down. Happiness, contentment comes from peace.

If you are having interpersonal conflict:

Make the choice that will leave you more equanimous, internally calm, more settled in the long term (from Kapil Gupta, @KapilGuptaMD, aka Siddha Performance). Whatever choice will make you calmer in the long term is the right one. Internal turmoil is a sign that you may want to turn around and make a different choice. Will save you from having regrets.

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Most important thing Naval made to become successful: combination of being very impatient and willful. He doesn’t like to wait. Hates to waste time.If he realizes is a waste of his time, he leaves. Examples: Tedious dinner, formality, dressing up. He walks away. Came to the conclusion that business trips are not worth it (time away from family invested, etc…)

Value your Time: More important than anything else. Do what you want with your time. If you’re spending it and not earning it… what are you doing?

Example: relationships. Going into a relationship: be selfish, show your worst self, because the best self will not be always sustained. Your partner needs to see the worst too, much more likely to show up in the long term. Going in with certain agreements. Example: nobody restricts my freedom. Everyone that wants to tell me what to do, it’s not gonna happen.

Failure: will make muscle grow. Is necessary for growth. Small amounts of controlled failure is a part of the process, how you grow. 99% of effort is wasted effort (in the long run). Do not take this out of context. Understand: you should be thoughtful and realize: find the thing you can go all into it with compound interest. Example: If you know the person you are dating is not the one you’re gonna marry, better leave when you realize.

When you find the thing you love go all in, and forget about the rest

Happiness is a choice you make, and a skill that you develop.

Everyone has a different DNA, but we can all cultivate it by:

* lowering identity

* lowering chatting of the mind

* not being involved in politics

* hanging around with happy people

* meditating

* reading philosophy

* improving happiness just like fitness

First step is just believing that is possible. Placebo effect of the mind is really good to believe, it has very few downside consequences. Go in with a positive mindset. Whatever I believe to be true is very likely to be so.

Be always positively inclined. It’s a skill you can develop as many others.

Thank You

~~~

Originally published in Medium, on 6.7.18:

https://blog.usejournal.com/naval-ravikant-notes-from-periscope-on-his-tweet-storm-how-to-get-rich-without-getting-lucky-e9e4f03a955f

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