Founder of AngelList and investor, Naval is known for his advice and philosophy on startups and life. His well known tweetstorm How to get rich without getting lucky is advice for accumulating wealth and thinking long term. While the tweets seem overly simplistic and feel like truisms, he provides more context and explanation in audio interviews on his podcast.
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Extrapolating from past data points is not an explanation. Building your confidence that something that will happen—like Bayes Theorem—is useful for descrete, observable problems, but fails to reveal the truth. It’s the equivalent of saying “because it’s always been that way” which is a flawed way of reasoning about the world.
The list of ways wealth is created is remarkably short.
Due to the nature of compounding interests growing exponentially over time, the immediate benefits of such an effect are small compared to the benefits at the end. This can make it hard to see how certain actions and behaviors lead to compounding because it can take a long time. It makes intuitive sense for things like money (people understand to contribute to a 401k for example), but requires more faith for actions like reading a lot. This explains why a lot of good advice is unlikely to be followed and example of Gate’s Law.
When building a company and product, having a singular obsession with working on it and solving the problem is an advantage over competitors that do not. The obsession leads to exploring the area in depth, more than any rational person would do. This leads to all sorts of discoveries overlooked by others.
The reason you shouldn’t rely on what economists say to make decisions (for example in financial decisions) is because nobody grades an economist. As Howard Marks puts it, “Economists are like portfolio manager who don’t mark to market.” In other words, a source of predictions is only useful if it is reliably correct, but there is no way to know that about an economist because they don’t keep score.
Short form podcast episodes with a single idea or concept is like note blogging. For example, Naval Ravikant’s podcast often takes a recent tweet and expands on the context and concept behind it. He’s previously remarked that ‘he thinks out loud’ on Twitter and they serve as reminders so he can recall that information again later and notes clarify understanding. In that way it is not just beneficial to listeners, but also to himself.
Building a business of any size takes substantial effort and is stressful. Just because a business is smaller doesn’t mean there is less work to do and less issues to deal with. If you are going to start a company, might as well strive for it to be a large one.
Inspiration quickly fades and is not enough to sustain a prolonged effort. That’s why you should act immediately when inspiration strikes. For example, when you have the idea for a blog post, jump straight into writing it—waiting causes the inspiration to pass and the likelihood of writing it goes down.
Charlie Munger’s first rule of compounding is to never interrupt it unnecessarily. Because of the way compounding works over time, to prematurely interrupt it (e.g. selling your shares or stopping to contribute) will forgo the largest upside—most compounding interest benefits occur at the end.
There are four kinds of luck.