name: almanack-of-naval
description: Apply Naval Ravikant's principles on wealth creation and happiness. Use when making career decisions, evaluating opportunities, thinking about leverage, building wealth without selling time, optimizing for long-term fulfillment, or deciding what skills to develop. Also use when feeling trapped in time-for-money exchanges.
tags: [create, leverage]

The Almanack of Naval

Principles for building wealth and finding happiness from Naval Ravikant.

Wealth vs Money vs Status

Wealth = Assets that earn while you sleep. Freedom.

Money = How we transfer wealth. Tool.

Status = Your rank in social hierarchy. Zero-sum game.

Key insight: Seek wealth, not money or status. Status games are zero-sum and make you bitter. Wealth creation is positive-sum.

How to Get Rich (Without Getting Lucky)

1. Own Equity

You won't get rich renting out your time. You must own equity—a piece of a business—to gain financial freedom.

Time-for-money traps:
- Salary caps your upside
- You're replaceable
- No compound growth
- Trading finite resource (time) for money

Equity paths:
- Start a business
- Join early-stage companies for equity
- Create intellectual property
- Build products with zero marginal cost

2. Specific Knowledge

Knowledge that cannot be trained for. If society can train you, it can replace you.

Characteristics:
- Feels like play to you, looks like work to others
- Found by pursuing genuine curiosity
- Often at the intersection of fields
- Built through apprenticeship, not school

Examples:
- Deep technical + domain expertise combination
- Unique taste or judgment in a field
- Rare skill combinations (coding + design + sales)

Question: "What do I know or do that feels easy to me but hard to others?"

3. Accountability

Take business risks under your own name. Society rewards those who take responsibility.

Accountability = leverage:
- Builds reputation (portable)
- Attracts opportunities
- Compounds over time
- Requires courage (downside is visible)

Contrast: Hiding in committees, anonymous work, blaming others—no upside capture.

4. Leverage

Leverage magnifies your outputs without magnifying inputs.

Three types of leverage:

Prioritize permissionless leverage: Code and media. Write once, sell forever. No gatekeepers.

New leverage formula: Specific knowledge + accountability + leverage (especially code/media) = wealth

5. Judgment

Knowing the long-term consequences of your actions. The most important skill.

Judgment comes from:
- Experience (especially failures)
- Learning foundational concepts (not news)
- Mental models from multiple disciplines
- Clear thinking (meditation, reading, solitude)

High judgment = high hourly rate. People pay for decisions, not labor.

The Hourly Rate Heuristic

Set an aspirational hourly rate. Outsource/ignore anything below it.

Example: If target is $500/hr:
- Don't mow your lawn ($50/hr task)
- Don't optimize for $100 savings
- Don't take meetings with unclear value

Why it works: Forces prioritization. Your time is your ultimate resource.

Caution: Don't use this to avoid learning new skills that will raise your rate.

Compound Growth

Play long-term games with long-term people.

Compounding applies to:
- Relationships (trust builds over time)
- Knowledge (foundations enable advanced learning)
- Reputation (track record compounds)
- Wealth (returns compound)

Implication: Optimize for the long term. Don't burn relationships for short-term gain. Don't take shortcuts that sacrifice reputation.

Rule: All returns in life come from compound interest.

Happiness Principles

Happiness Is a Skill

Happiness is not something you find. It's something you develop through:
- Desire reduction (wanting less)
- Acceptance (of the present moment)
- Health (foundation for everything)
- Freedom (from obligations, anger, fear)

Desire Is Suffering

Every desire is a contract with yourself to be unhappy until you get what you want.

Solution: Reduce desires. Want fewer things. Appreciate what you have.

Not: Achieve all desires (treadmill).

Peace Is Happiness at Rest

Happiness = Positive state, peaks and fades.
Peace = Absence of negative, sustainable.

Optimize for peace over happiness spikes.

The Mind Is a Single-Player Game

All benefits and suffering are in your head. External world is neutral.

Implication:
- You can change your experience by changing your mind
- Meditation, journaling, therapy = high ROI
- Stop blaming externals

Decision Making

Clear Thinking

The quality of your decisions determines the quality of your life.

Enemies of clear thinking:
- Ego (protecting self-image)
- Emotions (short-term reactivity)
- Social pressure (wanting approval)
- Complexity (not understanding fundamentals)

Aids to clear thinking:
- First principles (strip to basics)
- Inversion (what would guarantee failure?)
- Long time horizons (how does this look in 10 years?)
- Solitude (your own thoughts, not others')

Easy Choices, Hard Life

If you're evenly split on a decision, take the harder path.

Why: Your brain overweights short-term difficulty. The harder path usually has less competition and more growth.

If You Can't Decide, the Answer Is No

When faced with two equal options, choose the one with less downside, or neither.

Why: Modern life has too many options. Saying no to most things gives you time for what matters.

Application Checklist

When evaluating opportunities or career moves:

1. [ ] Does this build specific knowledge I can't be trained for?
2. [ ] Do I own equity or just trade time for money?
3. [ ] Am I taking accountability under my own name?
4. [ ] What leverage am I using? (labor/capital/products)
5. [ ] Does this compound over time?
6. [ ] Am I playing long-term games with long-term people?
7. [ ] Does this increase or decrease my freedom?
8. [ ] Would I do this if I couldn't tell anyone?

Anti-Patterns

• "I'll get rich then get happy" → Happiness is a skill, not a destination
• "Working hard = success" → Without leverage, hard work has linear returns
• Renting out time to highest bidder → Capped upside, no equity
• Status games → Zero-sum, makes you bitter
• Following credentials → Specific knowledge can't be certified
• Short-term optimization → Destroys compounding
• Wanting more → Desire treadmill, never satisfied