The Book in 3 Sentences

This free book is a collection of tweets on the philosophy of life, wealth, relationships, learning, and health from the investor and founder of AngelList Naval Ravikant, which you can download for free here.

He emphasizes the importance of creating leverage and playing long-term games where you can take advantage of compounding interest. He advocates being authentic, following your curiosity, and using the internet and software to leverage your unique skills and interests.

Impressions

I enjoyed this book; although it isn’t traditional, it’s a collection of insightful tweets on various subjects. It reminds me of Tim Ferriss’s Tribe of Mentors. A lot of the tweets say similar things in different ways. I overall enjoyed reading many different takes on the same things, but sometimes it could be more varied. My favorite themes were the ones on creating leverage and authenticity.

Who Should Read It?

Anyone interested in startups, wealth creation, health, and productivity. Anyone new to Naval’s tweets and way of thinking. Someone OK with a loose collection of tweets rather than a traditional long-form book.

How the Book Changed Me

This book motivated me to leverage my authenticity, be accountable, take risks, and follow my passions and curiosity instead of blindly playing someone else’s games. The book made me think about how to create leverage in my interests and how leverage is much more critical than raw effort or productivity. It encouraged me to really think hard about the few decisions that really matter, like which relationships to get into, what city to live in, which job to take. These completely change the trajectory of your life, but most of us don’t spend as much time deliberating these as we should. You should really take the time to figure out what should work on. It made me think about being authentic and doing things I’m passionate about for their own sake as much as possible and to avoid playing status games. The book further encouraged me to take my happiness seriously.

My Top 3 Quotes

Specific knowledge is knowledge you cannot be trained for. If society can train you, it can train someone else and replace you. Fortunes require leverage. Business leverage comes from capital, people, and products with no marginal cost of replication (code and media). 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. 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. Spend more time making the big decisions. There are basically three really big decisions you make in your early life: where you live, who you’re with, and what you do. We spend very little time deciding which relationship to get into. We spend so much time in a job, but we spend so little time deciding which job to get into. Choosing what city to live in can almost completely determine the trajectory of your life, but we spend so little time trying to figure out what city to live in.

Summary + Notes

Building Wealth

Focus on Wealth and Equity

To become wealthy, you have to own equity, the products of your labor. You’ll never get rich renting out your time.

Without ownership, your inputs are very closely tied to your outputs. In almost any salaried job, even one paying a lot per hour like a lawyer or a doctor, you’re still putting in the hours, and every hour you get paid. Wealth is the thing you want. Wealth is assets that earn while you sleep. Wealth is the factory, the robots, cranking out things. Wealth is the computer program that’s running at night, serving other customers. Wealth is even money in the bank that is being reinvested into other assets, and into other businesses. Ignore people playing status games. They gain status by attacking people playing wealth creation games. An old boss once warned: “You’ll never be rich since you’re obviously smart, and someone will always offer you a job that’s just good enough.” The Industrial Revolution and factories made us extremely hierarchical because one individual couldn’t necessarily own or build a factory, but now, thanks to the internet, we’re going back to an age where more and more people can work for themselves

Arm Yourself with Specific Knowledge

Specific knowledge is highly technical or creative work that has yet to be fully figured out. You can find it by following your genuine curiosity. It will feel like play to you and work to someone else.

Specific knowledge is found much more by pursuing your innate talents, your genuine curiosity, and your passion. It’s not by going to school for whatever is the hottest job; it’s not by going into whatever field investors say is the hottest. Specific knowledge is at the edge of knowledge. It’s also stuff that’s only now being figured out or is really hard to figure out. If you’re not 100 percent into it, somebody else who is 100 percent into it will outperform you Specific knowledge could be: • Sales skills • Musical talents, with the ability to pick up any instrument • An obsessive personality: you dive into things and remember them quickly • Love for science fiction: you were into reading sci-fi, which means you absorb a lot of knowledge very quickly • Playing a lot of games, you understand game theory pretty well • Gossiping, digging into your friend network. That might make you into a very interesting journalist. It’s much more important today to be able to become an expert in a brand-new field in nine to twelve months than to have studied the “right” thing a long time ago When specific knowledge is taught, it’s through apprenticeships, not schools.

Create Leverage

Spend a lot of time deciding on the crucial high-leverage decisions in your life, like what to work on, who to work with, and where to live. To create wealth, you need to leverage what you do. One of the best ways to do this is using “permissionless leverage,” like coding or media that you can start utilizing today, rather than labor or capital. The main forms of leverage are code, media, capital, and labor.

One form of leverage is labor—other humans working for you. It is the oldest form of leverage, is actually not a great one in the modern world. I would argue this is the worst form of leverage that you could possibly use. Managing other people is incredibly messy. It requires tremendous leadership skills. You’re one short hop from a mutiny or getting eaten or torn apart by the mob. 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. Capital is a trickier form of leverage to use. It’s more modern. It’s the one that people have used to get fabulously wealthy in the last century. It’s probably been the dominant form of leverage in the last century. If you get good at managing capital, you can manage more and more capital much more easily than you can manage more and more people. An army of robots is freely available—it’s just packed in data centers for heat and space efficiency. Use it. If you can’t code, write books and blogs, record videos and podcasts. In an age of leverage, one correct decision can win everything.

Play Long Term Games and Focus on Compounding Interest

Play iterated games. All the returns in life, whether in wealth, relationships, or knowledge, come from compound interest. Compound interest also happens in your reputation. If you have a sterling reputation and you keep building it for decades upon decades, people will notice. Your reputation will literally end up being thousands or tens of thousands of times more valuable than somebody else who was very talented but is not keeping the compound interest When you find the right thing to do, when you find the right people to work with, invest deeply. Sticking with it for decades is really how you make the big returns in your relationships and in your money. So, compound interest is very important. In a long-term game, it seems that everybody is making each other rich. And in a short-term game, it seems like everybody is making themselves rich.”

Embrace Accountability

Embrace accountability and take business risks under your own name. Society will reward you with responsibility, equity, and leverage. You have to build credibility, and you have to do it under your own name as much as possible, which is risky. So, accountability is a double-edged thing. It allows you to take credit when things go well and to bear the brunt of the failure when things go badly There’s not really that much to fear in terms of failure, and so people should take on a lot more accountability than they do. The one thing you have to avoid is the risk of ruin. Avoiding ruin means stay out of jail. Avoiding ruin could also mean you stay out of things that could be physically dangerous or hurt your body. Stay out of things that could cause you to lose all of your capital, all of your savings

Be in Control of Your Time

Forty hour work weeks are a relic of the Industrial Age. Knowledge workers function like athletes—train and sprint, then rest and reassess. Choosing what kinds of jobs, careers, or fields you get into and what sort of deals you’re willing to take from your employer will give you much more free time. Then, you don’t have to worry as much about time management. 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. 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. It’s only after you’re bored you have the great ideas. It’s never going to be when you’re stressed, or busy, running around or rushed. Make the time. 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.

Be Authentic and Love What You Do

Be a maker who makes something interesting people want. Show your craft, practice your craft, and the right people will eventually find you. Be a maker who makes something interesting people want. Show your craft, practice your craft, and the right people will eventually find you.” Become the best at what you do. Refine what you do until this is true. Opportunity will seek you out. Luck becomes your destiny. When I was younger, I used to be so desperate to make money that I would have done anything. If you’d shown up and said, “Hey, I’ve got a sewage trucking business, want to go into that?” I would have said, “Great, I want to make money!” Thank God no one gave me that opportunity

Study the Fundamentals and Create Mental Models

I was really into complexity theory back in the mid-90s. The more I got into it, the more I understand the limits of our knowledge and the limits of our prediction capability. Complexity has been super helpful to me. It has helped me come to a system that operates in the face of ignorance. I believe we are fundamentally ignorant and very, very bad at predicting the future Microeconomics and game theory are fundamental. I don’t think you can be successful in business or even navigate most of our modern capitalist society without an extremely good understanding of supply-and-demand, labor-versus-capital, game theory, and those kinds of things. I think basic mathematics is really underrated. If you’re going to make money, if you’re going to invest money, your basic math should be really good. You don’t need to learn geometry, trigonometry, calculus, or any of the complicated stuff if you’re just going into business. But you want arithmetic, probability, and statistics. Those are extremely important. Crack open a basic math book, and make sure you are really good at multiplying, dividing, compounding, probability, and statistics There’s a new branch of probability statistics, which is really around tail events. Black swans are extreme probabilities. Again, I have to refer back to Nassim Taleb, who I think is one of the greatest philosopher-scientists of our times. He’s really done a lot of pioneering work on this. Least understood, but the most important principle for anyone claiming “science” on their side—falsifiability. If it doesn’t make falsifiable predictions, it’s not science. For you to believe something is true, it should have predictive power, and it must be falsifiable. Any book that survived for two thousand years has been filtered through many people. The general principles are more likely to be correct. I wanted to get back into reading these sorts of books. Reading science, math, and philosophy one hour per day will likely put you at the upper echelon of human success within seven years. The real truths are heresies. They cannot be spoken. Only discovered, whispered, and perhaps read.

Happiness

Take your happiness seriously and make an effort to cultivate it. Your happiness mostly comes from your attitude and state of mind, rather than what you have or accomplish.

The three big ones in life are wealth, health, and happiness. We pursue them in that order, but their importance is reverse. For some people I know, it’s a flow state. For some people, it’s satisfaction. For some people, it’s a feeling of contentment. My definition keeps evolving. The answer I would have given you a year ago will be different than what I tell you now. Every Desire Is a Chosen Unhappiness. Every time you catch yourself desiring something, say, “Is it so important to me I’ll be unhappy unless this goes my way? Doing something because you “should” basically means you don’t actually want to do it. It’s just making you miserable, so I’m trying to eliminate as many “shoulds” from my life as possible. Buffett has a great example when he asks if you want to be the world’s best lover and known as the worst, or the world’s worst lover and known as the best? [paraphrased] in reference to an inner or external scorecard. A personal metric: how much of the day is spent doing things out of obligation rather than out of interest? The one I found works best for me is called Choiceless Awareness, or Nonjudgmental Awareness. As you’re going about your daily business (hopefully, there’s some nature) and you’re not talking to anybody else, you practice learning to accept the moment you’re in without making judgments. You don’t think, “Oh, there’s a homeless guy over there, better cross the street” or look at someone running by and say, “He’s out of shape, and I’m in better shape than him.” You lost your childhood sense of wonder and of being present and happy. You lost your inner happiness because you built up this personality of unresolved pain, errors, fears, and desires that glommed onto you like a bunch of barnacles

Naval’s Reading List

• These are a list of books that Naval recommends
• The Beginning of Infinity: Explanations That Transform the World by David Deutsch
• Sapiens: A Brief History of Humankind by Yuval Noah Harari
• The Rational Optimist: How Prosperity Evolves by Matt Ridley
• Genome: The Autobiography of a Species in 23 Chapters
• The Red Queen: Sex and the Evolution of Human Nature
• The Origins of Virtue: Human Instincts and the Evolution of Cooperation
• The Evolution of Everything: How New Ideas Emerge
• Skin in the Game by Nassim Taleb
• The Bed of Procrustes: Philosophical and Practical Aphorisms by Nassim Taleb
• The Black Swan: The Impact of the Highly Improbable
• Antifragile: Things That Gain from Disorder
• Fooled by Randomness
• Six Easy Pieces: Essentials of Physics Explained by Its Most Brilliant Teacher by Richard Feynman
• Six Not-So-Easy Pieces: Einstein’s Relativity, Symmetry, and Space-Time
• Perfectly Reasonable Deviations from the Beaten Track by Feynman
• Genius: The Life and Science of Richard Feynman
• Thing Explainer: Complicated Stuff in Simple Words by Randall Munroe
• The Lessons of History by Will and Ariel Durant
• The Sovereign Individual: Mastering the Transition to the Information Age by James Dale Davidson
• Poor Charlie’s Almanack: The Wit and Wisdom of Charles T. Munger by Charlie Munger (edited by Peter Kaufman)
• Reality Is Not What It Seems: The Journey to Quantum Gravity by Carlo Rovelli
• Seven Brief Lessons on Physics by Carlo Rovelli
• The Compleat Strategyst: Being a Primer on the Theory of Games of Strategy
• Williams and The Evolution of Cooperation by Robert Axelrod
• Everything by Jed McKenna
• Theory of Everything (The Enlightened Perspective) - Dreamstate Trilogy
• Jed McKenna’s Notebook
• Everything by Kapil Gupta, MD
• Master’s Secret Whispers
• Direct Truth
• Atmamun: The Path to achieving the bliss of the Himalayan Swamis
• The Book of Life by Jiddu Krishnamurti
• Total Freedom: The Essential Krishnamurti by Jiddu Krishnamurti
• Siddhartha by Herman Hesse
• The Book of Secrets by Osho
• The Great Challenge: Exploring the World Within by Osho
• The Way to Love: The Last Meditations of Anthony de Mello by Anthony de Mello
• The Untethered Soul: The Journey Beyond Yourself by Michael Singer
• Meditations by Marcus Aurelius
• Love Yourself Like Your Life Depends on It by Kamal Ravikant
• The Tao of Seneca: Practical Letters from a Stoic Master
• How to Change Your Mind by Michael Pollan
• Striking Thoughts: Bruce Lee’s Wisdom for Daily Living by Bruce Lee
• The Prophet by Kahlil Gibran
• Tao Te Ching
• Ficciones by Jorge Luis Borges
• Stories of Your Life and Others by Ted Chiang
• Exhalation: Stories by Ted Chiang
• The Lifecycle of Software Objects by Ted Chiang
• Snow Crash by Neal Stephenson
• “The Last Question,” a short story by Isaac Asimov
• René Girard’s mimetic theory
• Pre-Suasion: A Revolutionary Way to Influence
• The Story of Philosophy: The Lives and Opinions of the Great Philosophers, also by Will Durant
• Emerson and some Chesterfield
• Leo Tolstoy
• Alan Watts
• Scott Adams
• God’s Debris
• Nietzsche
• Richard Bach book Illusions: The Adventures
• The Three-Body Problem [Cixin Liu]
• Sex at Dawn [Christopher Ryan]
• Transmetropolitan
• The Boys [Garth Ennis]
• Planetary [Warren Ellis], and
• The Sandman [Neil Gaiman]
• Poor Charlie’s Almanack edited by Peter Kaufman (of Charlie Munger’s work)
• Zero to One by Blake Masters (of Peter Thiel’s work)
• Seeking Wisdom (and others) by Peter Bevelin (of Buffett and Munger’s work)
• Berkshire Hathaway Letters to Shareholders edited by Max Olson (of Buffett’s work)
• Principles by Ray Dalio (and team)