What Naval Said About Getting Rich Without Luck

Naval Ravikant's view is that getting rich comes down to seeking wealth rather than money or status, and then combining specific knowledge, accountability and leverage. The How to Get Rich page on his site collects his interviews about the "How To Get Rich (without getting lucky)" tweetstorm. In them he says: "A lot of people think making money is about luck. It's not. It's about becoming the kind of person that makes money."

Everything quoted below comes from that page, a set of conversations with Nivi published on nav.al on 28 December 2019.

What is the difference between wealth, money and status?

Naval draws a sharp line between the three. On wealth:

"Wealth is assets that earn while you sleep; it's the factory of robots cranking out things. Wealth is the computer program running at night that's serving other customers."

On money: "Money is how we transfer wealth." And on status: "Status is your ranking in the social hierarchy."

The distinction matters to him because the games differ. "Wealth is a very positive-sum game", he says, while "Status, on the other hand, is a zero-sum game." He adds that "to win at a status game you have to put somebody else down", which is why he tells people to avoid status games.

He is also clear about what wealth is for: "The purpose of wealth is freedom; it's nothing more than that."

Is getting rich a matter of luck?

Naval's framing is that luck should be factored out:

"In 1,000 parallel universes, you want to be wealthy in 999 of them. You don't want to be wealthy in the 50 of them where you got lucky. We want to factor luck out of it."

He walks through four kinds of luck, which he says came from a book that Marc Andreessen wrote a blog post about: blind luck, luck from hustling, luck from preparation, and luck from your unique character. The last is the one he cares about, "where you build a unique character, a unique brand, a unique mindset, where then luck finds you."

What is specific knowledge?

Naval calls specific knowledge "probably the hardest thing to get across in this whole tweetstorm". His starting point is that school can't teach everything:

"And it's not true that everything can be taught. In fact, the most interesting things cannot be taught."

He says "The first thing to notice about specific knowledge is that you can't be trained for it." It is "highly specific to the situation, it's specific to the individual, it's specific to the problem, and it can only be built as part of a larger obsession, interest, and time spent in that domain."

He also explains why chasing whatever field is fashionable doesn't work: "if you're not 100% into it somebody else who is 100% into it will outperform you."

Why does accountability matter?

Naval ties the pieces together in one sentence:

"If you want to make money you have to get paid at scale. And why you, that's accountability, at scale, that's leverage,"

The part that makes it you getting paid rather than somebody else, he goes on, is specific knowledge.

Accountability, in his account, is what earns leverage and ownership: "Accountability is important because that's how you're going to get leverage. That's how you're going to get credibility. It's also how you're going to get equity." He describes it as "reputational skin in the game", and argues that "taking accountability for your actions is the same as taking an equity position in all of your work."

What kinds of leverage are there?

Naval lists three: "Leverage comes in labor, comes in capital, or it can come through code or media."

He is cool on the first two. "You really want to stay out of labor-based leverage", he says, and capital is "a trickier form of leverage to use". The one he singles out is the third:

"The most interesting and the most important form of leverage is this idea of products that have no marginal cost of replication. This is the new form of leverage."

What makes code and media different, he says, is that they are permissionless: "Coding, writing books, recording podcasts, tweeting, YouTubing, these kinds of things, these are permissionless. You don't need anyone's permission to do them".

The short version

• Seek wealth, meaning assets that earn while you sleep, not money or status.
• Factor out luck by becoming the kind of person who makes money.
• Build specific knowledge: things that can't be taught, found through what you're obsessed with.
• Take accountability, which earns credibility, leverage and equity.
• Use permissionless leverage: code and media.

This post reports what Naval said in the interviews collected on one page of nav.al. It is not financial advice. To look up what he, Paul Graham, Sam Altman, Marc Andreessen or Warren Buffett wrote on your own question, you can ask Mímir. Each answer cites the original source.