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Chapter 1: What is leverage and why is it crucial for wealth building?
Somebody said to him, if you're so smart, why aren't you happy? And it's like, oh, I can apply my intelligence to this problem and I can break it down. Desire is a contract you make with yourself to be unhappy until you get what you want.
If you can learn the discipline of having few desires carefully chosen, you spend a lot more time being content, being happy, not holding a strong burning desire that is like making you unhappy every minute until you've achieved something.
This episode is an important step back from a world that increasingly wants to tell you what to do, when to do it, and how to do it. We're bringing on my friend Eric Jorgensen, one of the best writers of our time on brilliant billionaires and philosophers like Naval Ravikant. He spent the last 10 years studying him. Now we're going to steal his homework.
Naval has a line that's very jarring about how a salary is like the most addictive form of heroin.
the three most addictive substances, these heroin, carbohydrates, and a monthly salary. Like that push to get you out of the comfort zone. Are you a risk taker? Are you exposed? Or are you kind of like a lamb in the paddock?
Can you get really rich on a nine to five?
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Chapter 2: How can you 'productize yourself' to create unique value?
What I took from Naval building this book when I was like 30 is like, you grind and beat yourself up and have this brutal internal monologue all the way to like winning the game. You have the same epiphany that you can have right now, which is that like,
One of my favorite quotes from Naval is forget rich versus poor, white collar versus blue. It's now leveraged versus unleveraged. What does that mean?
Leverage is, to me, one of the most important things that Naval talks about. If you don't understand leverage, a lot of things about the world and the outcomes that you see are not going to make sense. And you're going to get bitter and confused and feel like it's unfair. But it's actually just the normal workings of leverage. And so as Naval explains it, there are many forms of leverage.
The modern forms of leverage are code, media, and capital. Zero marginal cost and uncapped and accesses this sort of global marketplace. And it's really unintuitive. We're not programmed to think that way.
Chapter 3: Why is hard work often overrated in achieving success?
And so understanding that we're in the age of leverage and it totally changes like what businesses can be built and where your priorities are. And we're seeing unbelievable businesses get built that sort of have this understanding of leverage at the core of them.
It's so funny you say that. I was at this YouTube thing this week, and so I have top of mind. But one of the creators there, I think it was Mark Rober, who has a huge science YouTube channel. And he did something with the Discovery Channel or another science channel. And so the CEO of YouTube was joking with him.
And he was like, yeah, it was really nice of you to do that thing with Discovery Channel. It's incredible to collab with a smaller channel. Because their viewership's like 10x smaller than Mark Rober's on YouTube. And so it's interesting, like this idea of capital, code, and media. How do you judge whether you have those kinds of leverage or you don't if you're a normal person?
Ideally, you want your earnings, your inputs and your outputs to be separate from each other. You don't want to have to work an hour to earn $10 or $100 or $1,000. You want to earn independent of your input.
Chapter 4: What are the four types of luck and how can you create your own?
If you're in a normal job, you're linear inputs and outputs. If you are working on a podcast, Like you record the same podcast, you publish it, whether a hundred people listen to it or a hundred thousand people listen to it, you put the same amount in, but you get an unbelievably higher reward from doing the same amount of work.
If you're investing in a company, like whether you invest a hundred thousand dollars or a million dollars, it's the same decision, but the rewards for doing it are an order of magnitude higher. So you want to look for these places where your inputs and your outputs are uncorrelated. And the more levered you are, the more bigger that difference is going to be.
And the way you get leverage is by winning a smaller leverage game. So start small and just let those things accrue incrementally. Like we talked about Elon Musk. He's like the most leveraged person alive. And it's because people choose to give him capital. People choose to go work for him. People choose to support his companies and invest in him. And they do that because they trust his judgment.
Chapter 5: How does understanding desire impact happiness and success?
They trust that he's going to use that well and give them good rewards for doing so.
Yeah, it's so interesting because in today's age, it's even more normal. Like, it used to be, maybe even like 30 years ago, I would say, most people had none of these, right? You had no money, capital. You had no code. You weren't an engineer. And you had no media because you weren't CNN. So it was like, unless you were a top 10% or 1% in any of these three, you had zero, right?
But now everybody could actually have all three really easily. So you can literally just ask yourself, am I making money and thus am I taking my money and investing in other things? That's leverage. Can I code? No, but now I've got all these AI tools so I can now use code. That's leverage. And media, do I own CNN?
Chapter 6: What does it mean to live like a lion in terms of opportunity?
No, but I actually have a podcast or I have an email newsletter or I have an Instagram account that I talk about. And so, yeah, I actually am levered with all three. And then it's degrees of them, but it's a wild time to be alive because for the first time ever, any human really, at least in most established worlds, can have all three of them for almost a $0 cost except capital.
If you can get a device that can get on the internet, you can enter the global meritocracy, essentially. Most people aren't even trying. Most people are just on the consumption side. If you start creating, if you start coding, if you start trying to build products like
and you think about it in terms of where do you get those uncorrelated inputs versus outputs and try to build a business, that's where you're going to get those exponential returns. And this is true in every industry, right? Like I think people, you know, running a plumbing company would probably say like, yeah, that's all well and good for a podcaster or a hedge fund.
But like I run a plumbing company, every business is just, uh, their growth is determined by how levered they are and how elegant they are and how long those levers can get. And Naval has a great
It's a long thing, I won't take you all the way through it, but he goes step by step all the way through the real estate industry where you could be a day laborer working on a house, you could be a general contractor, you could be a real estate investor, you could be a developer of big properties, or you could take the final leap into maximum leverage of external investors and technologists and everything and build Zillow.
And so the difference between a day laborer and a Zillager is how leveraged are you and how comfortable are you using each of those different forms of leverage?
It's a really good point.
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Chapter 7: How can you assess your risk-taking and exposure to opportunities?
I actually even thought of that before. It'd be interesting to put names on the tiers because every industry actually has that. Everyone has the day laborer all the way to the CEO, to the level of CEO of what kind of company you are, to investor. to like, I don't know, capital allocator plus risk taker. So it's actually an interesting way to think about the world.
I think a lot of times people just think, am I entry level? How much do I make? But they don't think about what is the game the company that they're in is playing too. And I feel like Naval's the king of contextual awareness, like understanding the game that you're playing.
It would be a fun game like books to build of just like breaking down the business from the beginning all the way up the whole ladder because we hear these incredible stories of people who like entered as a dishwasher in the restaurant industry and over the course of their career built like restaurants. a 50 restaurant chain.
And those are people who just sort of figured out, what does the person above me know that I don't know? What tool do they know how to use? What are they able to access? How can I figure it out?
Chapter 8: What are the key principles for finding fulfillment and success in life?
How can I take that next step, that next risk and climb all the way up the ladder?
Naval talks about something that is kind of controversial these days. He says, hard work is overrated and judgment is underrated. What do you think he means by that?
I think the Archimedes quote, give me a lever long enough and a place to stand and I can move the world. One totally correct decision can dominate everything. And Naval is really, he's an elegant thinker. I think he's really enamored with the idea of where can you flip one domino and everything takes care of itself, which is this incredibly zen business thing.
What's the smallest action I can take to create the biggest result? Um, it's very different than somebody like Elon or Goggins or whatever, who are just kind of like trying to get the most out of themselves possible. Um, but I think that's a really interesting approach. It's a good tool for thought to just be like, yeah, how easy could this be?
Um, he describes himself as lazy, which I don't think he is, but he's like, you know, I just want, I want the greatest reward for my effort. And I, I don't want to expend effort wastefully.
There is something to this idea of how you become incredibly ambitious while also being lazy. And lazy in the things that you will allow to take up your time. Because if you are crazy particular about the things that take up your time, then you have time to figure out where to flick that domino. That's going to live free in my mind, actually.
You could spend a lot of time in the middle and you will never actually have the full effect than if you spent the time to find the beginnings.
The real thing is hard work has a limit eventually. You can't work 100-hour weeks forever. Hard work is respectable and admired, and yes, we should work hard. Hard work can only get you a two or three X improvement in what you're doing.
And if you don't learn to improve how you're working or the elegance or improve your leverage, like learn where you can have those hundred X, you know, where one hour of work or 10 hours of work can have a 10 X or a hundred X impact. Like you're going to be kind of stuck in that two to three X improvement window, no matter what you do.
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