Earn With Your Mind, Not Your Time
The biggest lesson from Naval Ravikant for future me.
Known as the “Tech Buddha” and the “Angel Philosopher” of Silicon Valley, Naval Ravikant is a prolific tech investor, founder of AngelList and a lucid thinker. I first learned about Naval on Shane Parrish’s The Knowledge Project podcast, and have been following him closely since.
His subsequent appearances on Tim Ferriss and Joe Rogan are chock-full of wisdom on how to build wealth and happiness. I wish they taught classes such as personal finance, nutrition, time management, habit building, relationship skills and creativity in high school (wouldn’t it be nice to have a class to help figure out what you’re good at and what you can be when you grow up?).
Instead, society tells us to build a foundation for a career that makes money rather than following our genuine intellectual curiosities. It makes sense given time is something you cannot get back. It’s a non-renewable asset.
If you can only earn with your time, then to build wealth is to develop a deep specialization. It is no wonder schools prepare us to become doctors, lawyers or accountants. However, you’re never going to get rich renting out only your time.
Instead, if you have leverage, you can extend your impact beyond a linear, hourly input vs. output model. By using leverage, you can create more value for more people in the same amount of time. It allows you to 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.
If you can brand yourself and your specialized skills, then you don’t need to work at a 9–5. You can participate in the gig economy. Naval argues that if machines and mass production characterizes the Industrial Age, then the Information Age will essentially reverse the Industrial Age. We will become more like hunter gathers.
The Information Age will influence the need for more people to work for themselves or in smaller companies to produce specialized goods and services to which larger mass production companies outsource. Technology is facilitating the ability for individuals to now work wherever, whenever, whatever, for whomever.
“Forty hour work weeks are a relic of the Industrial Age. Knowledge workers function like athletes — train and sprint, then rest and reassess.”
If you can build enough leverage with code, media, labor, capital, etc., you only need to make a couple great decisions a year to get paid and hopefully make all the money you need that year. You should spend your time figuring out what those great decisions look like.
It’s not about how hard and how many hours you work. Much of your “work” becomes thinking about what to work on. He refers to this as “judgement” where you apply wisdom to external problems. Wisdom is knowing the long-term consequences of your actions.
Picking the direction you’re heading in for every decision is far more impactful than how much force you apply. Just pick the right direction to start walking toward and start walking. Once you decide, you should move quickly.
Tim Ferriss echoes:
“Slow down and remember this: Most things make no difference. Being busy is a form of laziness — lazy thinking and indiscriminate action. Being overwhelmed is often as unproductive as doing nothing, and is far more unpleasant. Being selective — doing less — is the path of the productive. Focus on the important few and ignore the rest.”
How tools of leverage can help you accomplish more:
- Small/Product: Instead of doing 1:1 coaching, spend a few hours creating a video course on a topic for hundreds to learn.
- Medium/Labor: You have taught yourself how to source fresh ingredients to make plant-friendly bowls, and sell them for lunch delivery to local companies. By hiring an employee to execute on operations, you can focus on selling your meals to more companies (your most valuable skill). The business grows.
- Large/Capital: Your friend starts a promising company. Rather than working there to get equity, you can invest your money and/or bring in other investors to earn a % of the value of the equity that capital bought.
Probably the most interesting thing about new forms of leverage is that they are permission-less (like in the first example). It doesn’t require someone else’s permission for you to use it to succeed. For labor, someone has to decide to follow you. For capital, someone has to give you money to invest.
Whereas code, writing, recording are examples of where you don’t need someone else’s permission to do them. As much as people may poo-poo on social media platforms like Twitter, Instagram, and YouTube, they’re not going to stop using it because it's permission-less leverage where everyone can be a broadcaster. It’s just too good.
