Almanack of Naval Ravikant

Summary

• Value freedom above all else. Freedom = control of how you use your time.
• Get paid for your judgement, not your time.
• Use permissionless leverage (code, media) to build trust in and value of your judgement
• Do what you’re uniquely good at (don’t copy) + feels like play to you = no one can compete with you on that
• All returns in life come from compound interest.

Highlights

Part I: Wealth

Understand How Wealth is Created

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

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

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

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

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.

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

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.

Productize Yourself

This is hard. This is why I say it takes decades—I’m not saying it takes decades to execute, but the better part of a decade may be figuring out what you can uniquely provide.

Technology democratizes consumption but consolidates production. The best person in the world at anything gets to do it for everyone.

Society will pay you for creating things it wants. But society doesn’t yet know how to create those things, because if it did, they wouldn’t need you. They would already be stamped out.

And if you want to be wealthy, you want to figure out which one of those things you can provide for society that it does not yet know how to get but it will want and providing it is natural to you, within your skill set, and within your capabilities.

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

Find and build specific knowledge

Specific knowledge cannot be taught, but it can be learned.

No one can compete with you on being you. Most of life is a search for who and what needs you the most.

The specific knowledge is sort of this weird combination of unique traits from your DNA, your unique upbringing, and your response to it. It’s almost baked into your personality and your identity. Then you can hone it.

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.

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

The internet enables any niche interest, as long as you’re the best person at it to scale out. And the great news is because every human is different, everyone is the best at something—being themselves.

“Escape competition through authenticity.” Basically, when you’re competing with people, it’s because you’re copying them. It’s because you’re trying to do the same thing. But every human is different. Don’t copy.

If you are fundamentally building and marketing something that is an extension of who you are, no one can compete with you on that.

The best jobs are neither decreed nor degreed. They are creative expressions of continuous learners in free markets.

The most important skill for getting rich is becoming a perpetual learner. You have to know how to learn anything you want to learn. The old model of making money is going to school for four years, getting your degree, and working as a professional for thirty years. But things change fast now. Now, you have to come up to speed on a new profession within nine months, and it’s obsolete four years later. But within those three productive years, you can get very wealthy.

If you go to the library and there’s a book you cannot understand, you have to dig down and say, “What is the foundation required for me to learn this?” Foundations are super important.

You do need to be deep in something because otherwise you’ll be a mile wide and an inch deep and you won’t get what you want out of life. You can only achieve mastery in one or two things. It’s usually things you’re obsessed about.

Play long-term games with long-term people

“All the returns in life, whether in wealth, relationships, or knowledge, come from compound interest.”

Compound interest also happens in your reputation.

Compounding in business relationships is very important.

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 in reputation going.

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.

The reason I say this is not to make some glib comment about how 99 percent of your life is wasted and only 1 percent is useful. I say this because you should be very thoughtful and realize in most things (relationships, work, even in learning) what you’re trying to do is find the thing you can go all-in on to earn compound interest.

I’m not saying don’t do the 99 percent, because it’s very hard to identify what the 1 percent is. What I’m saying is: when you find the 1 percent of your discipline which will not be wasted, which you’ll be able to invest in for the rest of your life and has meaning to you—go all-in and forget about the rest.

Take on accountability

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.

we’re still socially hardwired to not fail in public under our own names.

The people who have the ability to fail in public under their own names actually gain a lot of power.

I’m most familiar with Silicon Valley, but generally, people will forgive failures as long as you were honest and made a high-integrity effort.

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.

Realize that in modern society, the downside risk is not that large.

Build or buy equity in a business

If you don’t own a piece of a business, you don’t have a path towards financial freedom.

It’s ownership versus wage work. If you are paid for renting out your time, even lawyers and doctors, you can make some money, but you’re not going to make the money that gives you financial freedom. You’re not going to have passive income where a business is earning for you while you are on vacation.

Essentially, you’re working for somebody else, and that person is taking on the risk and has the accountability, the intellectual property, and the brand. They’re not going to pay you enough. They’re going to pay you the bare minimum they have to, to get you to do their job. That can be a high bare minimum, but it’s still not going to be true wealth where you’re retired but still earning.

Owning equity in a company basically means you own the upside. When you own debt, you own guaranteed revenue streams and you own the downside. You want to own equity. If you don’t own equity in a business, your odds of making money are very slim.

Everybody who really makes money at some point owns a piece of a product, a business, or some IP. That can be through stock options if you work at a tech company. That’s a fine way to start.

But usually, the real wealth is created by starting your own companies or even by investing.

Find a position of leverage

We live in an age of infinite leverage, and the economic rewards for genuine intellectual curiosity have never been higher. [11] Following your genuine intellectual curiosity is a better foundation for a career than following whatever is making money right now.

I only really want to do things for their own sake. That is one definition of art. Whether it’s business, exercise, romance, friendship, whatever, I think the meaning of life is to do things for their own sake. Ironically, when you do things for their own sake, you create your best work. Even if you’re just trying to make money, you will actually be the most successful.

The less you want something, the less you’re thinking about it, the less you’re obsessing over it, the more you’re going to do it in a natural way. The more you’re going to do it for yourself. You’re going to do it in a way you’re good at, and you’re going to stick with it. The people around you will see the quality of your work is higher.

Follow your intellectual curiosity more than whatever is “hot” right now. If your curiosity ever leads you to a place where society eventually wants to go, you’ll get paid extremely well.

Think about what product or service society wants but does not yet know how to get. You want to become the person who delivers it and delivers it at scale. That is really the challenge of how to make money.

The most interesting and the most important form of leverage is the idea of products that have no marginal cost of replication. This is the new form of leverage. This was only invented in the last few hundred years. It started with the printing press. It accelerated with broadcast media, and now it’s really blown up with the internet and with coding. Now, you can multiply your efforts without involving other humans and without needing money from other humans.

the most interesting thing to keep in mind about new forms of leverage is they are permissionless. They don’t require somebody else’s permission for you to use them or succeed.

Whenever you can in life, optimize for independence rather than pay. If you have independence and you’re accountable on your output, as opposed to your input—that’s the dream.

With a leveraged worker, judgment is far more important than how much time they put in or how hard they work.

What you want in life is to be in control of your time. You want to get into a leveraged job where you control your own time and you’re tracked on the outputs.

If they pay you what you’re worth, then you can get your time back—you can be hyper-efficient. You’re not doing meetings for meetings’ sake, you’re not trying to impress other people, you’re not writing things down to make it look like you did work. All you care about is the actual work itself.

Tools and leverage create this disconnection between inputs and outputs. The higher the creativity component of a profession, the more likely it is to have disconnected inputs and outputs. If you’re looking at professions where your inputs and your outputs are highly connected, it’s going to be very hard to create wealth and make wealth for yourself in that process.

Earn with your mind, not your time.

Get paid for your judgement

I would love to be paid purely for my judgment, not for any work. I want a robot, capital, or computer to do the work, but I want to be paid for my judgment.

CEOs are highly paid because of their leverage. Small differences in judgment and capability really get amplified.

We waste our time with short-term thinking and busywork. Warren Buffett spends a year deciding and a day acting. That act lasts decades.

Judgment—especially demonstrated judgment, with high accountability and a clear track record—is critical.

Play iterated games. All the returns in life, whether in wealth, relationships, or knowledge, come from compound interest.

Prioritise and focus

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.

Always factor your time into every decision.

There are fundamentally two huge games in life that people play. One is the money game. Because money is not going to solve all of your problems, but it’s going to solve all of your money problems. People realize that, so they want to make money. But at the same time, many of them, deep down, believe they can’t make money. They don’t want any wealth creation to happen. So, they attack the whole enterprise by saying, “Well, making money is evil. You shouldn’t do it.” But they’re actually playing the other game, which is the status game. They’re trying to be high status in the eyes of other people watching by saying, “Well, I don’t need money.

“If you secretly despise wealth, it will elude you”?

If you get into a relative mindset, you’re always going to hate people who do better than you, you’re always going to be jealous or envious of them.

Wealth creation is an evolutionarily recent positive-sum game. Status is an old zero-sum game. Those attacking wealth creation are often just seeking status.

Politics is an example of a status game. Even sports are an example of a status game. To be the winner, there must be a loser. I don’t fundamentally love status games. They play an important role in our society, so we can figure out who’s in charge. But fundamentally, you play them because they’re a necessary evil.

The problem is, to win at a status game, you have to put somebody else down. That’s why you should avoid status games in your life—they make you into an angry, combative person. You’re always fighting to put other people down, to put yourself and the people you like up.

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.

You have to say no to everything and free up your time so you can solve the important problems. Those three are probably the three biggest ones.

Status games are always going to exist. There’s no way around it, but realize most of the time, when you’re trying to create wealth and you’re getting attacked by someone else, they’re trying to increase their own status at your expense. They’re playing a different game. And it’s a worse game. It’s a zero-sum game instead of a positive-sum game.

Figure out what you’re good at, and start helping other people with it. Give it away. Pay it forward.

Yes, I know some people aren’t necessarily ready to be entrepreneurs, but long-term, where did we come up with this idea the correct logical thing to do is for everybody to work for somebody else? It is a very hierarchical model.

Find work that feels like play

Humans evolved as hunters and gatherers where we all worked for ourselves. It’s only at the beginning of agriculture we became more hierarchical. 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. I would rather be a failed entrepreneur than someone who never tried. Because even a failed entrepreneur has the skill set to make it on their own.

Any end goal will just lead to another goal, lead to another goal. We just play games in life. When you grow up, you’re playing the school game, or you’re playing the social game. Then you’re playing the money game, and then you’re playing the status game. These games just have longer and longer and longer-lived horizons. At some point, at least I believe, these are all just games. These are games where the outcome really stops mattering once you see through the game.

Then you just get tired of games. I would say I’m at the stage where I’m just tired of games. I don’t think there is any end goal or purpose. I’m just living life as I want to. I’m literally just doing it moment to moment. I want to be off the hedonic treadmill.

Retirement is when you stop sacrificing today for an imaginary tomorrow. When today is complete, in and of itself, you’re retired.

How do you get there? Well, one way is to have so much money saved that your passive income (without you lifting a finger) covers your burn rate. A second is you just drive your burn rate down to zero—you become a monk. A third is you’re doing something you love. You enjoy it so much, it’s not about the money.

What you really want is freedom

The way to get out of the competition trap is to be authentic, to find the thing you know how to do better than anybody. You know how to do it better because you love it, and no one can compete with you. If you love to do it, be authentic, and then figure out how to map that to what society actually wants. Apply some leverage and put your name on it. You take the risks, but you gain the rewards, have ownership and equity in what you’re doing, and just crank it up.

I’m always “working.” It looks like work to others, but it feels like play to me. And that’s how I know no one can compete with me on it. Because I’m just playing, for sixteen hours a day. If others want to compete with me, they’re going to work, and they’re going to lose because they’re not going to do it for sixteen hours a day, seven days a week.

Money is not the root of all evil; there’s nothing evil about it. But the lust for money is bad. The lust for money is not bad in a social sense. It’s not bad in the sense of “you’re a bad person for lusting for money.” It’s bad for you. Lusting for money is bad for us because it is a bottomless pit. It will always occupy your mind.

If you love money, and you make it, there’s never enough. There is never enough because the desire is turned on and doesn’t turn off at some number. It’s a fallacy to think it turns off at some number.

You make money to solve your money and material problems. I think the best way to stay away from this constant love of money is to not upgrade your lifestyle as you make money. It’s very easy to keep upgrading your lifestyle as you make money. But if you can hold your lifestyle fixed and hopefully make your money in giant lump sums as opposed to a trickle at a time, you won’t have time to upgrade your lifestyle. You may get so far ahead you actually become financially free.

Another thing that helps: I value freedom above everything else. All kinds of freedom: freedom to do what I want, freedom from things I don’t want to do, freedom from my own emotions or things that may disturb my peace. For me, freedom is my number one value. To the extent money buys freedom, it’s great. But to the extent it makes me less free, which it definitely does at some level as well, I don’t like it.

For someone who is early in their career (and maybe even later), the single most important thing about a company is the alumni network you’re going to build. Think about who you will work with and what those people are going on to do.

How to get lucky

Them coming to you to extract it and give you half is not blind luck. You created your own luck. You put yourself in a position to capitalize on luck or to attract luck when nobody else created the opportunity for themselves. To get rich without getting lucky, we want to be deterministic. We don’t want to leave it to chance.

Ways to get lucky: • Hope luck finds you. • Hustle until you stumble into it. • Prepare the mind and be sensitive to chances others miss. • Become the best at what you do. Refine what you do until this is true. Opportunity will seek you out. Luck becomes your destiny.

One of the things I think is important to make money is having a reputation that makes people do deals through you. Remember the example of being a great diver where treasure hunters will come and give you a piece of the treasure for your diving skills. If you are a trusted, reliable, high-integrity, long-term-thinking dealmaker, when other people want to do deals but don’t know how to do them in a trustworthy manner with strangers, they will literally approach you and give you a cut of the deal just because of the integrity and reputation you’ve built

Your character and your reputation are things you can build, which will let you take advantage of opportunities other people may characterize as lucky, but you know it wasn’t luck. [78] My co-founder Nivi said, “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.”

think that is a brilliant formulation. In a long-term game, it’s positive sum. We’re all baking the pie together. We’re trying to make it as big as possible. And in a short-term game, we’re cutting up the pie.

“Be a maker who makes something interesting people want. Show your craft, practice your craft, and the right people will eventually find you.”

think business networking is a complete waste of time. And

If someone is talking a lot about how honest they are, they’re probably dishonest. That is just a little telltale indicator I’ve learned. When someone spends too much time talking about their own values or they’re talking themselves up, they’re covering for something.

Be patient

One thing I figured out later in life is generally (at least in the tech business in Silicon Valley), great people have great outcomes. You just have to be patient.

You just had to give them a long enough timescale. It never happens in the timescale you want, or they want, but it does happen.

You have to enjoy it and keep doing it, keep doing it, and keep doing it. Don’t keep track, and don’t keep count because if you do, you will run out of time.

The only way to truly learn something is by doing it. Yes, listen to guidance. But don’t wait.

Your real résumé is just a catalog of all your suffering. If I ask you to describe your real life to yourself, and you look back from your deathbed at the interesting things you’ve done, it’s all going to be around the sacrifices you made, the hard things you did.

Money buys you freedom in the material world. It’s not going to make you happy, it’s not going to solve your health problems, it’s not going to make your family great, it’s not going to make you fit, it’s not going to make you calm. But it will solve a lot of external problems. It’s a reasonable step to go ahead and make money.

What making money will do is solve your money problems. It will remove a set of things that could get in the way of being happy, but it is not going to make you happy.

Most of the time, the person you have to become to make money is a high-anxiety, high-stress, hard-working, competitive person. When you have done that for twenty, thirty, forty, fifty years, and you suddenly make money, you can’t turn it off. You’ve trained yourself to be a high-anxiety person. Then, you have to learn how to be happy.

My definition of wisdom is knowing the long-term consequences of your actions. Wisdom applied to external problems is judgment. They’re highly linked; knowing the long-term consequences of your actions and then making the right decision to capitalize on that.

Judgement

Judgment is underrated. [1] Can you define judgment?

You have to put in the time, but the judgment is more important. The direction you’re heading in matters more than how fast you move, especially with leverage. Picking the direction you’re heading in for every decision is far, far more important than how much force you apply. Just pick the right direction to start walking in, and start walking.

How to think clearly

really smart thinkers are clear thinkers. They understand the basics at a very, very fundamental level. I would rather understand the basics really well than memorize all kinds of complicated concepts I can’t stitch together and can’t rederive from the basics. If you can’t rederive concepts from the basics as you need them, you’re lost. You’re just memorizing.

The number one thing clouding us from being able to see reality is we have preconceived notions of the way it should be.

The good news is, the moment of suffering—when you’re in pain—is a moment of truth. It is a moment where you’re forced to embrace reality the way it actually is. Then, you can make meaningful change and progress. You can only make progress when you’re starting with the truth.

One definition of a moment of suffering is “the moment when you see things exactly the way they are.”

The hard thing is seeing the truth. To see the truth, you have to get your ego out of the way because your ego doesn’t want to face the truth. The smaller you can make your ego, the less conditioned you can make your reactions, the less desires you can have about the outcome you want, the easier it will be to see the reality.

How do you know when you're producing something of value

What we wish to be true clouds our perception of what is true. Suffering is the moment when we can no longer deny reality.

The more desire I have for something to work out a certain way, the less likely I am to see the truth.

Especially in business, if something isn’t going well, I try to acknowledge it publicly and I try to acknowledge it publicly in front of my co-founders and friends and co-workers. Then, I’m not hiding it from anybody else. If I’m not hiding it from anybody, I’m not going to delude myself from what’s actually going on.

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.

What you feel tells you nothing about the facts—it merely tells you something about your estimate of the facts.

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.

Very smart people tend to be weird since they insist on thinking everything through for themselves.

It’s really important to be able to uncondition yourself, to be able to take your habits apart and say, “Okay, this is a habit I probably picked up when I was a toddler trying to get my parent’s attention. Now I’ve reinforced it and reinforced it, and I call it a part of my identity. Does it still serve me? Does it make me happier? Does it make me healthier? Does it make me accomplish whatever I set out to accomplish?”

Shed your identity to see reality

Our egos are constructed in our formative years—our first two decades. They get constructed by our environment, our parents, society. Then, we spend the rest of our life trying to make our ego happy.

Any belief you took in a package (ex. Democrat, Catholic, American) is suspect and should be re-evaluated from base principles.

I don’t like to self-identify on almost any level anymore, which keeps me from having too many of these so-called stable beliefs.

I try not to have too much I’ve pre-decided. I think creating identities and labels locks you in and keeps you from seeing the truth.

There are two attractive lessons about suffering in the long term. It can make you accept the world the way it is. The other lesson is it can make your ego change in an extremely hard way.

“Tension is who you think you should be. Relaxation is who you are.” —Buddhist saying

Learn the skills of decision-making

The classical virtues are all decision-making heuristics to make one optimize for the long term rather than for the short term.

Almost all biases are time-saving heuristics. For important decisions, discard memory and identity, and focus on the problem.

praise specifically, criticize generally.

If you have a criticism of someone, then don’t criticize the person—criticize the general approach or criticize the class of activities. If you have to praise somebody, then always try and find the person who is the best example of what you’re praising and praise the person, specifically. Then people’s egos and identities, which we all have, don’t work against you. They work for you.

I think people have a hard time understanding a fundamental fact of leverage. If I manage $1 billion and I’m right 10 percent more often than somebody else, my decision-making creates $100 million worth of value on a judgment call. With modern technology and large workforces and capital, our decisions are leveraged more and more. If you can be more right and more rational, you’re going to get nonlinear returns in your life. I love the blog Farnam Street because it really focuses on helping you be more accurate, an overall better decision-maker. Decision-making is everything.

Collect mental models

The best mental models I have found came through evolution, game theory, and Charlie Munger. Charlie Munger is Warren Buffett’s partner. Very good investor. He has tons and tons of great mental models. Author and trader Nassim Taleb has great mental models. Benjamin Franklin had great mental models. I basically load my head full of mental models. [4] I use my tweets and other people’s tweets as maxims that help compress my own learnings and recall them. The brain space is finite—you have finite neurons—so you can almost think of these as pointers, addresses, or mnemonics to help you remember deep-seated principles where you have the underlying experience to back it up. If you don’t have the underlying experience, then it just reads like a collection of quotes. It’s cool, it’s inspirational for a moment, maybe you’ll make a nice poster out of it. But then you forget it and move on. Mental models are really just compact ways for you to recall your own knowledge.

Evolution, thermodynamics, information theory, and complexity have explanatory and predictive power in many aspects of life.

don’t believe I have the ability to say what is going to work. Rather, I try to eliminate what’s not going to work. I think being successful is just about not making mistakes. It’s not about having correct judgment. It’s about avoiding incorrect judgments.

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.

To me, the principal-agent problem is the single most fundamental problem in microeconomics. If you do not understand the principal-agent problem, you will not know how to navigate your way through the world. It is important if you want to build a successful company or be successful in your dealings.

When you are the principal, then you are the owner—you care, and you will do a great job. When you are the agent and you are doing it on somebody else’s behalf, you can do a bad job. You just don’t care. You optimize for yourself rather than for the principal’s assets.

The smaller the company, the more everyone feels like a principal. The less you feel like an agent, the better the job you’re going to do.

The more closely you can tie someone’s compensation to the exact value they’re creating, the more you turn them into a principal, and the less you turn them into an agent.

In the intellectual domain, compound interest rules. When you look at a business with one hundred users growing at a compound rate of 20 percent per month, it can very, very quickly stack up to having millions of users.

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.

Calculus is useful to know, to understand the rates of change and how nature works. But it’s more important to understand the principles of calculus—where you’re measuring the change in small discrete or small continuous events.

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.

macroeconomics, because it doesn’t make falsifiable predictions (which is the hallmark of science), has become corrupted. You never have a counterexample when studying the economy. You can never take the US economy and run two different experiments at the same time.

If you can’t decide, the answer is no.

If you find yourself creating a spreadsheet for a decision with a list of yes’s and no’s, pros and cons, checks and balances, why this is good or bad…forget it. If you cannot decide, the answer is

Simple heuristic: If you’re evenly split on a difficult decision, take the path more painful in the short term.

What’s actually going on is one of these paths requires short-term pain. And the other path leads to pain further out in the future. And what your brain is doing through conflict-avoidance is trying to push off the short-term pain.

By definition, if the two are even and one has short-term pain, that path has long-term gain associated. With the law of compound interest, long-term gain is what you want to go toward. Your brain is overvaluing the side with the short-term happiness and trying to avoid the one with short-term pain.

So you have to cancel the tendency out (it’s a powerful subconscious tendency) by leaning into the pain. As you know, most of the gains in life come from suffering in the short term so you can get paid in the long term.

What are the most efficient ways to build new mental models? Read a lot—just read.

Learn to love to read

The means of learning are abundant—it’s the desire to learn that is scarce.

You almost have to read the stuff you’re reading, because you’re into it. You don’t need any other reason. There’s no mission here to accomplish. Just read because you enjoy it.

I would say for books, blogs, tweets, or whatever—anything with ideas and information and learning—the best ones to read are the ones you’re excited about reading all the time.

Reading a book isn’t a race—the better the book, the more slowly it should be absorbed.

I don’t believe in delayed gratification when there are an infinite number of books out there to read. There are so many great books.

The number of books completed is a vanity metric. As you know more, you leave more books unfinished. Focus on new concepts with predictive power.

What practices do you follow to internalize/organize information from reading books? Explain what you learned to someone else. Teaching forces learning.

What can I do for the next sixty days to become a clearer, more independent thinker? Read the greats in math, science, and philosophy. Ignore your contemporaries and news. Avoid tribal identification. Put truth above social approval.

No book in the library should scare you. Whether it’s a math, physics, electrical engineering, sociology, or economics book. You should be able to take any book down off the shelf and read it. A number of them are going to be too difficult for you. That’s okay—read them anyway. Then go back and reread them and reread them.

When you’re reading a book and you’re confused, that confusion is similar to the pain you get in the gym when you’re working out. But you’re building mental muscles instead of physical muscles. Learn how to learn and read the books.

When it comes to reading, make sure your foundation is very, very high quality. The best way to have high-quality foundation (you may not love this answer), but the trick is to stick to science and to stick to the basics.

the hard sciences are a solid foundation. Microeconomics is a solid foundation. The moment you start wandering outside of these solid foundations you’re in trouble because now you don’t know what’s true and what’s false.

Another way to do this is to read originals and read classics.

If you want to learn macroeconomics, first read Adam Smith, read von Mises, or read Hayek. Start with the original philosophers of the economy.

Don’t read the current interpretation someone is feeding you about how things should be done and run.

If you’re a perpetual learning machine, you will never be out of options for how to make money. You can always see what’s coming up in society, what the value is, where the demand is, and you can learn to come up to speed.

When solving problems: the older the problem, the older the solution.

Part II: Happiness

The three big ones in life are wealth, health, and happiness. We pursue them in that order, but their importance is reverse.

Learning happiness

Don’t take yourself so seriously. You’re just a monkey with a plan.

Happiness is learned

Happiness is the state when nothing is missing. When nothing is missing, your mind shuts down and stops running into the past or future to regret something or to plan something.

every positive thought essentially holds within it a negative thought. It is a contrast to something negative. The Tao Te Ching says this more articulately than I ever could, but it’s all duality and polarity. If I say I’m happy, that means I was sad at some point. If I say he’s attractive, then somebody else is unattractive. Every positive thought even has a seed of a negative thought within it and vice versa, which is why a lot of greatness in life comes out of suffering. You have to view the negative before you can aspire to and appreciate the positive.

To me, happiness is not about positive thoughts. It’s not about negative thoughts. It’s about the absence of desire, especially the absence of desire for external things. The fewer desires I can have, the more I can accept the

Happiness to me is mainly not suffering, not desiring, not thinking too much about the future or the past, really embracing the present moment and the reality of what is, and the way it is.

Nature has no concept of happiness or unhappiness. Nature follows unbroken mathematical laws and a chain of cause and effect from the Big Bang to now. Everything is perfect exactly the way it is. It is only in our particular minds we are unhappy or not happy, and things are perfect or imperfect because of what we desire.

Reality is neutral. Reality has no judgments. To a tree, there is no concept of right or wrong, good or bad.

There are no external forces affecting your emotions—as much as it may feel that way.

If you look at little children, on balance, they’re generally pretty happy because they are really immersed in the environment and the moment, without any thought of how it should be given their personal preferences and desires. I think the neutral state is actually a perfection state. One can be very happy as long as one isn’t too caught up in their own head.

A rational person can find peace by cultivating indifference to things outside of their control.

The mind is just as malleable as the body. We spend so much time and effort trying to change the external world, other people, and our own bodies—all while accepting ourselves the way we were programmed in our youths. We accept the voice in our head as the source of all truth. But all of it is malleable, and every day is new. Memory and identity are burdens from the past preventing us from living freely in the present.

Happiness requires presence

We crave experiences that will make us be present, but the cravings themselves take us from the present moment.

I just don’t believe in anything from my past. Anything. No memories. No regrets. No people. No trips. Nothing. A lot of our unhappiness comes from comparing things from the past to the present.

If it’s your internal purpose, the thing you most want to do, then sure, you’ll be happy doing it. But an externally inflicted purpose, like “society wants me to do X,” “I am the first son of the first son of this, so I should do Y,” or “I have this debt or burden I took on,” I don’t think it will make you happy.

You’ll notice when I say happiness, I mean peace. When a lot of people say happiness, they mean joy or bliss, but I’ll take peace.

A happy person isn’t someone who’s happy all the time. It’s someone who effortlessly interprets events in such a way that they don’t lose their innate peace.

Every Desire Is a Chosen Unhappiness

I think the most common mistake for humanity is believing you’re going to be made happy because of some external circumstance.

The thing is, I’m addicted to the desiring. I’m addicted to the idea of this external thing bringing me some kind of happiness and joy, and this is completely delusional.

Looking outside yourself for anything is the fundamental delusion. Not to say you shouldn’t do things on the outside. You absolutely should. You’re a living creature.

The idea you’re going to change something in the outside world, and that is going to bring you the peace, everlasting joy, and happiness you deserve, is a fundamental delusion we all suffer from, including me.

The mistake over and over and over is to say, “Oh, I’ll be happy when I get that thing,” whatever it is. That is the fundamental mistake we all make, 24/7, all day long.

Desire is a contract you make with yourself to be unhappy until you get what you want.

like to stay aware of it, because then I can choose my desires very carefully. I try not to have more than one big desire in my life at any given time, and I also recognize it as the axis of my suffering. I realize the area where I’ve chosen to be unhappy.

Success does not earn happiness

Happiness is being satisfied with what you have. Success comes from dissatisfaction. Choose.

Survival and replication drive put us on the work treadmill. Hedonic adaptation keeps us there. The trick is knowing when to jump off and play instead.

To me, the real winners are the ones who step out of the game entirely, who don’t even play the game, who rise above it. Those are the people who have such internal mental and self-control and self-awareness, they need nothing from anybody else.

In reality, peace is not a guarantee. It’s always flowing. It’s always changing. You want to learn the core skill set of flowing with life and accepting it in most cases.

Today, the way we think you get peace is by resolving all your external problems. But there are unlimited external problems. The only way to actually get peace on the inside is by giving up this idea of problems.

Envy is the enemy of happiness

Whenever the word “should” creeps up in your mind, it’s guilt or social programming

Training yourself to be happy is completely internal. There

is no external progress, no external validation.

You’re competing against yourself—it is a single-player game.

self-image? If you’re not willing to do a wholesale, 24/7, 100 percent swap with who that person is, then there is no point in being jealous.

Once I came to that realization, jealousy faded away because I don’t want to be anybody else.

Happiness is built by habits

The first rule of handling conflict is: Don’t hang around people who constantly engage in conflict. I’m not interested in anything unsustainable or even hard to sustain, including difficult relationships.

When we get something, we assume the world owes it to us. If you’re present, you’ll realize how many gifts and how much abundance there is around us at all times. That’s all you really need to do. I’m here now, and I have all these incredible things at my disposal.

The most important trick to being happy is to realize happiness is a skill you develop and a choice you make. You choose to be happy, and then you work at it. It’s just like building muscles. It’s just like losing weight. It’s just like succeeding at your job. It’s just like learning calculus.

Just being very aware in every moment. If I catch myself judging somebody, I can stop myself and say, “What’s the positive interpretation of this?” I used to get annoyed about things. Now I always look for the positive side of it. It used to take a rational effort. It used to take a few seconds for me to come up with a positive. Now I can do it sub-second.

The world just reflects your own feelings back at you.

Find happiness in acceptance

In any situation in life, you always have three choices: you can change it, you can accept it, or you can leave it. If you want to change it, then it is a desire. It will cause you suffering until you successfully change it. So don’t pick too many of those. Pick one big desire in your life at any given time to give yourself purpose and motivation.

I have another hack I use for minor annoyances. When they happen, a part of me will instantly react negatively. But I’ve learned to mentally ask myself, “What is the positive of this situation?” “Okay, I’ll be late for a meeting. But what is the benefit to me? I get to relax and watch the birds for a moment. I’ll also spend less time in that boring meeting.” There’s almost always something positive. Even if you can’t come up with

I have another hack I use for minor annoyances. When they happen, a part of me will instantly react negatively. But I’ve learned to mentally ask myself, “What is the positive of this situation?” “Okay, I’ll be late for a meeting. But what is the benefit to me? I get to relax and watch the birds for a moment. I’ll also spend less time in that boring meeting.” There’s almost always something positive.

Death is the most important thing that is ever going to happen to you. When you look at your death and you acknowledge it, rather than running away from it, it’ll bring great meaning to your life. We spend so much of our life trying to avoid death. So much of what we struggle for can be classified as a quest for immortality.

Here’s a hot tip: There is no legacy. There’s nothing to leave. We’re all going to be gone. Our children will be gone. Our works will be dust. Our civilizations will be dust. Our planet will be dust. Our solar system will be dust. In the grand scheme of things, the Universe has been around for ten billion years. It’ll be around for another ten billion years. Your life is a firefly blink in a night.

Choosing to be yourself

All you should do is what you want to do. If you stop trying to figure out how to do things the way other people want you to do them, you get to listen to the little voice inside your head that wants to do things a certain way. Then, you get to be you.

The combinatorics of human DNA and experience are staggering. You will never meet any two humans who are substitutable for each other.

Your goal in life is to find the people, business, project, or art that needs you the most. There is something out there just for you. What you don’t want to do is build checklists and decision frameworks built on what other people are doing. You’re never going to be them. You’ll never be good at being somebody else.

The constant mood swings of getting a “like” then an angry comment makes us into anxious creatures. We evolved for scarcity but live in abundance. There’s a constant struggle to say no when your genes always want to say yes. Yes to sugar. Yes to staying in this relationship. Yes to alcohol. Yes to drugs. Yes, yes, yes. Our bodies don’t know how to say no.

Dietary fat drives satiety. Dietary sugar drives hunger. The sugar effect dominates. Control your appetite accordingly.

I will just say in general, any sensible diet avoids the combination of sugar and fat together.

Ditch the extremists and any food invented in the last few hundred years.

World’s simplest diet: The more processed the food, the less one should consume.

Choosing to care for yourself

My number one priority in life, above my happiness, above my family, above my work, is my own health. It starts with my physical health. Second, it’s my mental health. Third, it’s my spiritual health. Then, it’s my family’s health. Then, it’s my family’s wellbeing. After that, I can go out and do whatever I need to do with the rest of the world.

What I did was decide my number one priority in life, above my happiness, above my family, above my work, is my own health. It starts with my physical health. [4] Because my physical health became my number one priority, then I could never say I don’t have time. In the morning, I work out, and however long it takes is how long it takes.

I do not start my day until I’ve worked out. I don’t care if the world is imploding and melting down, it can wait another thirty minutes until I’m done working out.

The best workout for you is one you’re excited enough to do every day.

Meditation + Mental Strength

An emotion is our evolved biology predicting the future impact of a current event. In modern settings, it’s usually exaggerated or wrong.

I learned a very important lesson from this: most of our suffering comes from avoidance. Most of the suffering from a cold shower is the tip-toeing your way in. Once you’re in, you’re in. It’s not suffering. It’s just cold. Your body saying it’s cold is different than your mind saying it’s cold. Acknowledge your body saying it’s cold. Look at it. Deal with it. Accept it, but don’t mentally suffer over it. Taking a cold shower for two minutes isn’t going to kill you.

Having a cold shower helps you re-learn that lesson every morning. Now hot showers are just one less thing I need out of life.

Meditation is intermittent fasting for the mind. Too much sugar leads to a heavy body, and too many distractions lead to a heavy mind. Time spent undistracted and alone, in self-examination, journaling, meditation, resolves the unresolved and takes us from mentally fat to fit.

The first thing to realize is you can observe your mental state. Meditation doesn’t mean you’re suddenly going to gain the superpower to control your internal state. The advantage of meditation is recognizing just how out of control your mind is. It is like a monkey flinging feces, running around the room, making trouble, shouting, and breaking things. It’s completely uncontrollable. It’s an out-of-control madperson. You have to see this mad creature in operation before you feel a certain distaste toward it and start separating yourself from it. In that separation is liberation. You realize, “Oh, I don’t want to be that person. Why am I so out of control?” Awareness alone calms you down.

I try to keep an eye on my internal monologue. It

The ability to singularly focus is related to the ability to lose yourself and be present, happy, and (ironically) more effective.

It’s almost like you’re taking yourself out of a certain frame and you’re watching things from a different perspective even though you’re in your own mind.

As you get older, the sum of preferences you’ve accumulated is very, very large. These habitual reactions end up as runaway freight trains controlling your mood. We should control our own moods. Why don’t we study how to control our moods? What a masterful thing it would be if you could say, “Right now I would like to be in the curious state,” and then you can genuinely get yourself into the curious state. Or say, “I want to be in a mourning state. I’m mourning a loved one, and I want to grieve for them. I really want to feel that. I don’t want to be distracted by a computer programming problem due tomorrow.”

Choosing to build yourself

Life is going to play out the way it’s going to play out. There will be some good and some bad. Most of it is actually just up to your interpretation. You’re born, you have a set of sensory experiences, and then you die.

Really, I wish I had done all of the same things, but with less emotion and less anger.

Now, I’m trying to learn from that and do the same things I think are the right things to do but without anger and with a very long-term point of view. If you take a very long-term point of view and take the emotion out of it, I wouldn’t consider those things mistakes anymore.

. I started realizing it’s all about habits. At any given time, I’m either trying to pick up a good habit or discard a previous bad habit. It

. I started realizing it’s all about habits. At any given time, I’m either trying to pick up a good habit or discard a previous bad habit. It takes time.

One of the things Krishnamurti talks about is being in an internal state of revolution. You should always be internally ready for a complete change. Whenever we say we’re going to try to do something or try to form a habit, we’re wimping out.

When you really want to change, you just change.

But most of us don’t really want to change—we don’t want to go through the pain just yet.

At least recognize it, be aware of it, and give yourself a smaller change you can actually carry out.

Impatience with actions, patience with results. As Nivi said, inspiration is perishable. When you have inspiration, act on it right then and there.

Choosing to Grow Yourself

I don’t believe in specific goals. Scott Adams famously said, “Set up systems, not goals.” Use your judgment to figure out what kinds of environments you can thrive in, and then create an environment around you so you’re statistically likely to succeed.

I’m not going to be the most successful person on the planet, nor do I want to be. I just want to be the most successful version of myself while working the least hard possible.

want to live in a way that if my life played out 1,000 times, Naval is successful 999 times. He’s not a billionaire, but he does pretty well each time. He may not have nailed life in every regard, but he sets up systems so he’s failed in very few places.

Science is, to me, the study of truth. It is the only true discipline because it makes falsifiable predictions. It actually changes the world. Applied science becomes technology, and technology is what separates us from the animals and allows us to have things like cell phones, houses, cars, heat, and electricity.

I think almost everything that people read these days is designed for social approval. [4] I know people who have read one hundred regurgitated books on evolution and they’ve never read Darwin. Think of the number of macroeconomists out there. I think most of them have read tons of treatises in economics but haven’t read any Adam Smith.

At some level, you’re doing it for social approval. You’re doing it to fit in with the other monkeys. You’re fitting in to get along with the herd. That’s not where the returns are in life. The returns in life are being out of the herd.

Social approval is inside the herd. If you want social approval, definitely go read what the herd is reading. It takes a level of contrarianism to say, “Nope. I’m just going to do my own thing. Regardless of the social outcome, I will learn anything I think is interesting.”

think that’s why the smartest and the most successful people I know started out as losers. If you view yourself as a loser, as someone who was cast out by society and has no role in normal society, then you will do your own thing and you’re much more likely to find a winning path.

Everyone’s motivated at something. It just depends on the thing. Even the people that we say are unmotivated are suddenly really motivated when they’re playing video games. I think motivation is relative, so you just have to find the thing you’re into.

Number one: read. Read everything you can. And not just the stuff that society tells you is good or even books that I tell you to read. Just read for its own sake. Develop a love for it. Even if you have to read romance novels or paperbacks or comic books. There’s no such thing as junk. Just read it all. Eventually, you’ll guide yourself to the things that you should and want to be reading. Related to the skill of reading are the skills of mathematics and persuasion. Both skills help you to navigate through the real world. Having the skill of persuasion is important because if you can influence your fellow human beings, you can get a lot done. I think persuasion is an actual skill. So you can learn it, and it’s not that hard to do

Mathematics helps with all the complex and difficult things in life. If you want to make money, if you want to do science, if you want to understand game theory or politics or economics or investments or computers, all of these things have mathematics at the core. It’s a foundational language of nature.

You should know statistics and probability forwards and backwards and inside out.

Choosing to free yourself

Be aware there are no “adults.” Everyone makes it up as they go along. You have to find your own path, picking, choosing, and discarding as you see fit. Figure it out yourself, and do it.

My old definition was “freedom to.” Freedom to do anything I want. Freedom to do whatever I feel like, whenever I feel like. Now, the freedom I’m looking for is internal freedom. It’s “freedom from.” Freedom from reaction. Freedom from feeling angry. Freedom from being sad. Freedom from being forced to do things. I’m looking for “freedom from,” internally and externally,

If you hurt other people because they have expectations of you, that’s their problem. If they have an agreement with you, it’s your problem. But, if they have an expectation of you, that’s completely their problem. It has nothing to do with you. They’re going to have lots of expectations out of life. The sooner you can dash their expectations, the better.

Value your time. It is all you have. It’s more important than your money. It’s more important than your friends. It is more important than anything. Your time is all you have. Do not waste your time.

This doesn’t mean you can’t relax. As long as you’re doing what you want, it’s not a waste of your time. But if you’re not spending your time doing what you want, and you’re not earning, and you’re not learning—what the heck are you doing?

Don’t spend your time making other people happy. Other people being happy is their problem. It’s not your problem. If you are happy, it makes other people happy. If you’re happy, other people will ask you how you became happy and they might learn from it, but you are not responsible for making other people happy.

What is anger? Anger is a way to signal as strongly as you can to the other party you’re capable of violence. Anger is a precursor to violence. Observe when you’re angry—anger is a loss of control over the situation. Anger is a contract you make with yourself to be in physical and mental and emotional turmoil until reality changes.

People who live far below their means enjoy a freedom that people busy upgrading their lifestyles can’t fathom.

There is no endpoint to self-awareness and self-discovery. It’s a lifelong process you hopefully keep getting better and better at. There is no one meaningful answer, and no one is going to fully solve it unless you’re one of these enlightened characters. Maybe some of us will get there, but I’m not likely to, given how involved I am in the rat race. The best case is I’m a rat who might be able to look up at the clouds once in a while. I think just being aware you’re a rat in a race is about as far as most of us are going to get.

The meanings of life

There is no fundamental, intrinsic purposeful meaning to the Universe. If there was, then you would just ask the next question. You’d say, “Why is that the meaning?” It would be, as physicist Richard Feynman said, it would be “turtles all the way down.” The “why’s” would keep accumulating. There is no answer you could give that wouldn’t have another “why.”

What kind of silly God judges you for eternity based on some small period of time here? I think after this life, it’s very much like before you were born. Remember that? It’s going to be just like that. Before you were born, you didn’t care about anything or anyone, including your loved ones, including yourself, including humans, including whether we go to Mars or whether we stay on planet Earth, whether there’s an AI or not.

Live by your values

Honesty is a core, core, core value. By honesty, I mean I want to be able to just be me. I never want to be in an environment or around people where I have to watch what I say.

If I disconnect what I’m thinking from what I’m saying, it creates multiple threads in my mind. I’m no longer in the moment—now I have to be future-planning or past-regretting every time I talk to somebody. Anyone around whom I can’t be fully honest, I don’t want to be around.

only want to be around people I know I’m going to be around for the rest of my life. I only want to work on things I know have long-term payout.

only believe in peer relationships. I don’t believe in hierarchical relationships.

Buddhist saying, “Anger is a hot coal you hold in your hand while waiting to throw it at somebody.”

Much of finding great relationships, great coworkers, great lovers, wives, husbands, is finding other people where your values line up. If your values line up, the little things don’t matter.

Rational Buddhism

When people say your third chakra is opening, etc.—I don’t know—that’s just fancy nomenclature. I have not been able to verify or confirm any of that on my own. If I can’t verify it on my own or if I cannot get there through science, then it may be true, it may be false, but it’s not falsifiable, so I cannot view it as a fundamental truth.

Try everything, test it for yourself, be skeptical, keep what’s useful, and discard what’s not.

The democratization of technology allows anyone to be a creator, entrepreneur, scientist. The future is brighter.