[Book Recap] The Almanack of Naval Ravikant

I read this some time ago and re-read it once, writing a summary to recap things that left an impression.

The book is organized into largely two parts: Wealth and Happiness. Both are great. Naval's philosophy on happiness combines stoicism and Buddhism, which resonates with me.

LIFE FORMULAS I (2008)

(Underline are my own)

• Happiness = Health + Wealth + Good Relationships
  • Health = Exercise + Diet + Sleep
    • Exercise = High Intensity Resistance Training + Sports + Rest
    • Diet = Natural Foods + Intermittent Fasting + Plants
    • Sleep = No alarms + 8–9 hours + Circadian rhythms
• Wealth = Income + Wealth * (Return on Investment)
  • Income = Accountability + Leverage + Specific Knowledge
  • Accountability = Personal Branding + Personal Platform + Taking Risk?
  • Leverage = Capital + People + Intellectual Property
  • Specific Knowledge = Knowing how to do something society cannot yet easily train other people to do
  • Return on Investment = "Buy-and-Hold" + Valuation + Margin of Safety

NAVAL’S RULES (2016)

(Underline are my own)

• Be present above all else.
• Desire is suffering. (Buddha)
• Anger is a hot coal you hold in your hand while waiting to throw it at someone else. (Buddha)
• If you can’t see yourself working with someone for life, don’t work with them for a day.
• Reading (learning) is the ultimate meta-skill and can be traded for anything else.
• All the real benefits in life come from compound interest.
• Earn with your mind, not your time.
• 99 percent of all effort is wasted.
• Total honesty at all times. It’s almost always possible to be honest and positive.
• Praise specifically, criticize generally. (Warren Buffett)
• Truth is that which has predictive power.
• Watch every thought. (Ask “Why am I having this thought?”)
• All greatness comes from suffering.
• Love is given, not received.
• Enlightenment is the space between your thoughts. (Eckhart Tolle)
• Mathematics is the language of nature.
• Every moment has to be complete in and of itself.

Happiness

Learning Happiness

Happiness == nothing missing == no desire == peace == internal silence == no thoughts spent on past or future == presence

Happiness is a side effect of peace.

• "Peace is happiness at rest, and happiness is peace in motion. You can convert peace into happiness anytime you want. But peace is what you want most of the time. If you’re a peaceful person, anything you do will be a happy activity."

Happiness requires presence.

Happiness/peace and purpose don't go together.

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

Now, the stoic part of happiness:

• "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. 
• The world just reflects your own feelings back at you. Reality is neutral. Reality has no judgments."

"We think of ourselves as fixed and the world as malleable, but it’s really we who are malleable and the world is largely fixed."

"The fundamental delusion: There is something out there that will make me happy and fulfilled forever."

• "Desire is a contract you make with yourself to be unhappy until you get what you want."
• "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."
• "it’s way more important to perfect your desires than to try to do something you don’t 100 percent desire."

"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."

"Happiness is a choice you make and a skill you develop." i.e., you can slowly but steadily improve your happiness baseline, just like you can improve your fitness:

• Cultivate indifference to things outside of your control.
• Lower your identify
• Don't care about things that don't matter
• Don't get involved in politics.
• Don't hang around unhappy people, hang around with happy people.
• Read philosophy
• Value your time on this earth
• Meditate

Happiness is built by habits

• "At the end of the day, you are a combination of your habits and the people who you spend the most time with."
• Find positives in annoying things.
  • Large issues - trace growth and improvements that came from it years later.
  • Small things - "What's the posiiive of this situation?"
• "Every time you catch yourself desiring something, say, “Is it so important to me I’ll be unhappy unless this goes my way?” You’re going to find with the vast majority of things it’s just not true."
• Drop caffeine - be a more stable person.
• Workout - peace of body, peace of mind
• "The more you judge, the more you separate yourself. You’ll feel good for an instant, because you feel good about yourself, thinking you’re better than someone. Later, you’re going to feel lonely. Then, you see negativity everywhere. The world just reflects your own feelings back at you."
• Tell your friends you are happy - consistency bias.
• More secrets, less happiness.
• Hedonic adaptation is more powerful for man-made things (cars, houses, clothes, money) than for natural things (food, sex, exercise).
• No exceptions—all screen activities linked to less happiness, all non-screen activities linked to more happiness.
• A personal metric: how much of the day is spent doing things out of obligation rather than out of interest?
• Increase serotonin in the brain without drugs: Sunlight, exercise, positive thinking, and tryptophan.

Death

"Any moment where you’re not having a great time, when you’re not really happy, you’re not doing anyone any favors. It’s not like your unhappiness makes them better off somehow. All you’re doing is wasting this incredibly small and precious time you have on this Earth.

Keeping death on the forefront and not denying it is very important."

Saving Yourself

Health above all else:

"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."

"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.

Nothing like a health problem to turn up the contrast dial for the rest of life."

“I don’t have time” is just another way of saying “It’s not a priority.” What you really have to do is say whether it is a priority or not. If something is your number one priority, then you will do it. That’s just the way life works.

About meditations:

"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 advantage of meditation is recognizing just how out of control your mind is."

Meditation is turning off society and listening to yourself. It only “works” when done for its own sake.

• Hiking is walking meditation.
• Journaling is writing meditation.
• Praying is gratitude meditation.
• Showering is accidental meditation.
• Sitting quietly is direct meditation.

How to do it:

• "I recommend meditating one hour each morning because anything less is not enough time to really get deep into it. I would recommend if you really want to try meditation, try sixty days of one hour a day, first thing in the morning. After about sixty days, you will be tired of listening to your own mind. You will have resolved a lot of issues, or you have heard them enough to see through those fears and issues.
• Meditation isn’t hard. All you have to do is sit there and do nothing. Just sit down. Close your eyes and say, “I’m just going to give myself a break for an hour. This is my hour off from life. This is the hour I’m not going to do anything."

Change/grow yourself

Power of habits

• "When we’re older, we’re a collection of thousands of habits constantly running subconsciously. We have a little bit of extra brainpower in our neocortex for solving new problems. You become your habits."

“Set up systems, not goals.” - Scott Adams

"Impatience with actions, patience with results." - also results are out of your control, actions are.

If there’s something you want to do later, do it now. There is no “later.”

The hardest thing is not doing what you want—it’s knowing what you want.

Freedom from

"Advice to my younger self: “Be exactly who you are.”

Holding back means staying in bad relationships and bad jobs for years instead of minutes."

Freedom from reaction. Freedom from feeling angry. Freedom from being sad. Freedom from being forced to do things.

Freedom from other people's expectations:

• If you hurt other people because they have expectations of you, that’s their problem.
• Courage isn’t charging into a machine gun nest. Courage is not caring what other people think.
• Value your time. It is all you have. ... 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.

Freedom from anger:

• 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.

Freedom from uncontrolled thinking:

• A busy mind accelerates the passage of subjective time.
• If you walk down the street and there are a thousand people in the street, all thousand are talking to themselves in their head at any given point. They’re constantly judging everything they see. They’re playing back movies of things that happened to them yesterday. They’re living in fantasy worlds of what’s going to happen tomorrow. They’re just pulled out of base reality. That can be good when you do long-range planning. It can be good when you solve problems. It’s good for us as survival-and-replication machines.
• I think it’s actually very bad for your happiness. To me, the mind should be a servant and a tool, not a master. My monkey mind should not control and drive me 24/7.

Philosophy

"The real truths are heresies. They cannot be spoken. Only discovered, whispered, and perhaps read."

The meaning of life:

1. Answer 1: It’s personal. You have to find your own meaning. ... When you find an answer you’re happy with, it will be fundamental to your life.
2. Answer 2: There is no meaning to life. There is no purpose to life.
   1. 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.”
   2. I don’t buy the everlasting afterlife answers because it’s insane to me, with absolutely no evidence, to believe because of how you live seventy years here on this planet, you’re going to spend eternity, which is a very long time, in some afterlife. 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.
   3. 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. After death, you just don’t care either.
3. Answer 3: Our existence is to revert entropy locally and accelerate the heat death of the universe.
   1. I also wrote something about this here, actually.

Live by your values

Honesty:

• 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.
• Anyone around whom I can’t be fully honest, I don’t want to be around.

Long-term thinking and relationships

• All benefits in life come from compound interest, whether in money, relationships, love, health, activities, or habits.
• I 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.

Peer (not hierarchical) relationships

No anger

• “Anger is a hot coal you hold in your hand while waiting to throw it at somebody.” I don’t want to be angry, and I don’t want to be around angry people. I just cut them out of my life. I’m not judging them. I went through a lot of anger too. They have to work through it on their own. Go be angry at someone else, somewhere else.

“To find a worthy mate, be worthy of a worthy mate.” - Charlie Munger

Rational Buddhism

Wisdom: Understanding the long-term consequences of your actions.

Everyone starts out innocent. Everyone is corrupted. Wisdom is the discarding of vices and the return to virtue, by way of knowledge.

If wisdom could be imparted through words alone, we’d all be done here.

Wealth

Building Wealth

How Wealth Is Created

"Seek wealth, not money or status. Wealth is having assets that earn while you sleep. Money is how we transfer time and wealth. Status is your place in the social hierarchy.

You will get rich by giving society what it wants but does not yet know how to get. At scale.

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

Don’t partner with cynics and pessimists. Their beliefs are self-fulfilling.

Learn to sell. Learn to build. If you can do both, you will be unstoppable.

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

When specific knowledge is taught, it’s through apprenticeships, not schools.

Embrace accountability, and take business risks under your own name. Society will reward you with responsibility, equity, and leverage.

Fortunes require leverage. Business leverage comes from capital, people, and products with no marginal cost of replication (code and media).

Capital means money. To raise money, apply your specific knowledge with accountability and show resulting good judgment.

Study microeconomics, game theory, psychology, persuasion, ethics, mathematics, and computers.

Reading is faster than listening. Doing is faster than watching.

Work as hard as you can. Even though who you work with and what you work on are more important than how hard you work.

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

Summary: Productize Yourself

• “Productize” and “yourself.” “Yourself” has uniqueness. “Productize” has leverage. “Yourself” has accountability. “Productize” has specific knowledge. “Yourself” also has specific knowledge in there. So all of these pieces, you can combine them into these two words.

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

"technology is the set of things, as Danny Hillis said, that don’t quite work yet"

Find and Build Specific Knowledge

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

Society, business, & money are downstream of technology, which is itself downstream of science. Science applied is the engine of humanity. Corollary: Applied Scientists are the most powerful people in the world. This will be more obvious in the coming years.

“Escape competition through authenticity.”

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 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

Compounding in business relationships is very important.

• Look at some of the top roles in society, like why someone is a CEO of a public company or managing billions of dollars. It’s because people trust them. They are trusted because the relationships they’ve built and the work they’ve done has compounded.
• They’ve stuck with the business and shown themselves (in a visible and accountable way) to be high-integrity people.

Intentions don’t matter. Actions do. That’s why being ethical is hard.

99% of effort is wasted.

• 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.

Take on Accountability

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

• generally, people will forgive failures as long as you were honest and made a high-integrity effort.

Find a Position of Leverage

If it entertains you now but will bore you someday, it’s a distraction. Keep looking.

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.

• 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.

There are three broad classes of leverage:

• One form of leverage is labor
  • Managing other people is incredibly messy. It requires tremendous leadership skills.
• Money is good as a form of leverage. It means every time you make a decision, you multiply it with money.
• The final form of leverage is brand new—the most democratic form. It is: “products with no marginal cost of replication.”
  • This includes books, media, movies, and code. Code is probably the most powerful form of permissionless leverage. All you need is a computer—you don’t need anyone’s permission.

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.

• Inputs don’t match outputs, especially for leveraged workers.
• The higher the creativity component of a profession, the more likely it is to have disconnected inputs and outputs.

Earn with your mind, not your time.

Get Paid for Your Judgment

• Judgment—especially demonstrated judgment, with high accountability and a clear track record—is critical.
• We waste our time with short-term thinking and busywork. Warren Buffett spends a year deciding and a day acting. That act lasts decades.

Being at the extreme in your art is very important in the age of leverage.

Prioritize and Focus

Set a very high hourly aspirational rate for yourself and stick to it. It should seem and feel absurdly high. If it doesn’t, it’s not high enough.

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.

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.

Play stupid games, win stupid prizes.

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.

Other

Figure out what you’re good at, and start helping other people with it. Give it away. Pay it forward. Karma works because people are consistent. On a long enough timescale, you will attract what you project. But don’t measure—your patience will run out if you count.

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

Money is not the root of all evil; there’s nothing evil about it. But the lust for money is bad.

The punishment for the love of money is delivered at the same time as the money. As you make money, you just want even more, and you become paranoid and fearful of losing what you do have. There’s no free lunch.

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.

Shor-term vs long-term game

• “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.”
• I 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.

Business networking is a complete waste of time.

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

I think you just have to be very careful about doing things you are fundamentally not going to be proud of, because they will damage you.

• The first time someone acts this way, I will warn them. By the way, nobody changes. Then I just distance myself from them. I cut them out of my life.
• I just have this saying inside my head: “The closer you want to get to me, the better your values have to be.”

Be Patient

Everybody wants to get rich immediately, but the world is an efficient place; immediate doesn’t work. (RD: inefficient?)

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 (patience).

People are oddly consistent. Karma is just you, repeating your patterns, virtues, and flaws until you finally get what you deserve.

Always pay it forward. And don’t keep count.

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.

Anything you’re given doesn’t matter.... You have to do hard things anyway to create your own meaning in life.

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.

Building Judgment

Judgment

Hard work is overrated, judgement is underrated.

My definition of wisdom is knowing the long-term consequences of your actions. Wisdom applied to external problems is judgment.

Without hard work, you’ll develop neither judgment nor leverage.

The direction you’re heading in matters more than how fast you move, especially with leverage.

How to Think Clearly

“Clear thinker” is a better compliment than “smart.”

If you can’t rederive concepts from the basics as you need them, you’re lost. You’re just memorizing. 

The advanced concepts in a field are less proven. We use them to signal insider knowledge, but we’d be better off nailing the basics.

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

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.

Jorgenson, Eric. The Almanack of Naval Ravikant: A Guide to Wealth and Happiness (p. 97). Magrathea Publishing. Kindle Edition.

I also encourage taking at least one day a week (preferably two, because if you budget two, you’ll end up with one) where you just have time 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.

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

Shed Your Identity to See Reality

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

Learn the Skills of Decision-Making

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

Praise specifically, criticize generally.

It's almost always possible to be honest and positive.

Collect Mental Models

Similar to Charlie Munger

Mental models are compact ways to recall your knowledge.

Inversion - see what's not going to work

Principal-agent problem: "If you want it done, then go. And if not, then send."

Falsifiability - For you to believe something is true, it should have predictive power, and it must be falsifiable. Macroeconomics doesn't make falsifiable predictions.

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

Run uphill

• If you are evenly split on a difficult decision, take the path more painful in the short term.
• Our brain is overvaluing the side with the short-term happiness and trying to avoid the one with short-term pain.

Learn to Love to Read

"I don't want to read everything, I just want to read the 100 great books over and over again."