How to Get Rich (3 Steps)
Every Sunday I send out something to think about, a question to ponder and something to try to make your life a little more pleasant. The idea is to inspire and encourage positive change. Readers share their progress so we can all benefit from the learnings.
THINK
“Most of life is a search for who or what needs you the most.“
Naval Ravikant
As we approach the 5 year anniversary of Naval Ravikant’s famous Tweetstorm “How to Get Rich (without getting lucky)“, I thought I’d share one of my favourite takeaways with you.
The 3 Components of Wealth Building.
Naval took to Twitter on 31st May 2018, and dumped reems and reems of money-making knowledge bombs, such as:
“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.“
“Understand that ethical wealth creation is possible. If you secretly despise wealth, it will elude you.”
You can check out the entire Tweetstorm HERE
According to Naval, if you want to become wealthy, you need to:
“Arm yourself with specific knowledge, accountability, and leverage.“
If you’re not wealthy, it’s because you’re likely missing one of these 3 things.
Let’s dive into each one.
Specific Knowledge
Naval believes, “You will get rich by giving society what it whats but does not yet know how to get it.“
- Specific knowledge isn’t something you can be trained for – “If society can train you, it can train someone else, and replace you.“
- You acquire specific knowledge by following your passion and curiosity – not jumping on trends.
- It will feel like play for you.
- It’s taught through apprenticeships, not schools.
- It’s highly technical or creative. It cannot be outsourced or automated.
When you consider the foundation of economics, you want to offer something that is in LOW SUPPLY and HIGH DEMAND. Like toilet paper 3 years ago.
To offer specific knowledge on a topic that’s rare (low supply) and valuable (high demand) is difficult, which is why it’s so important to follow your passion and curiosity.
Curiosity drives competence.
Having a mild interest isn’t enough. It leaves the door open for competition. Having competition (higher supply) drives prices down.
Be obsessed.
Naval says, “Escape competition thorugh authenticity“.
Be authentically you, and help people solve problems they don’t do (£), won’t do (££) or can’t do (£££).
“You get paid in direct proportion to the difficulty of problems you solve.” — Elon Musk
If you’re struggling, consider Maslow’s hierarchy of Needs. Start at the bottom and work up. Offering something that helps people:
- Feel better
- Look better
- Become wealthier
- Become better at x
If you can combine some of these, even better.
I know that some of you might be thinking, ‘How can I make money from my freaky deaky hobby?‘. My answer…
The Internet.
You no longer have to conform and change who you are to suit your job and their ideals. You can direct energy into finding the job that fits you perfectly.
Lean into your strengths and curiosity.
For example, helping people solve the money problem, whilst sharing philosophy and d*ck jokes. What a life!
How can you become more authentically yourself?
Accountability
Get some skin in the game and put your neck on the line.
“Embrace accountability, and take business risks under your own name. Society will reward you with responsibility, equity, and leverage.“
If it doesn’t work out, you’re the one to blame.
If it does work out, you get all the upside.
The opposite example of this is a traditional 9-5. Your efforts and value are overlooked. Your company doesn’t fire you for making a mistake, but it also doesn’t give you credit for delivering above expectations. Quite often, they don’t even notice.
My videos, posts and these emails get both ends of the spectrum. I receive hate and criticism, as well as love and appreciation. I can tell you, the upside far exceeds the downside. Particularly, as I’m following my passion and curiosity.
Leverage
Naval says, “Fortunes require leverage. Business leverage comes from capital, people, and products with no marginal cost of replication (code and media).“
1. Capital (Money)
You can use other people’s money to invest in your business. Property investing is a good example.
We use investor money to complete development works, and the bank’s money to mortgage the building when it’s complete. If we had to pay for everything, our progress and profits would be significantly held back.
2. People
You can use other people’s time to free up your own. A Cleaner is a good example.
Rather than spending 1-4 hours cleaning your house each week, pay someone less than your hourly rate to do it for you, and use those 1-4 hours to create more value.
3. Code and Media
You can create Code (Apps, Software, etc.) or Media (YouTube, Podcasts, etc.) that have little to no cost of replication. Meaning, if I sell 10 books or 10,000,000 books the effort and cost to create it is the same (or very similar).
Capital and People are Permissioned Leverage – Someone has to agree to give you Money or their Time.
Code and Media are Permissionless Leverage – They make you money whilst you sleep.
This is where the greatest opportunity lies.
Pre-internet, people got wealthy with Capital and People. Now, they get wealthy with Code and Media.
Don’t worry if you don’t know Code, I don’t, and I don’t care to learn. I opted to create content instead. This can take the form of a book, blog, video, podcast or online course.
Key takeaway = Separate your time from earning money
Learn to harness leverage so you earn money whilst you sleep. Spend your waking hours creating more value and leverage.
Reflect and share this with someone.
ASK
If you’d like to build wealth, consider which area you’re overlooking and ask:
“How can you become more authentically you?”
“How can you embrace accountability?”
“How can you separate your time from earning money?”
Write down what comes to mind.
TRY
Put your neck on the line and put something out on the internet. The format is irrelevant. Help someone:
- Feel better
- Look better
- Become wealthier
- Become better at something
Didn’t that feel good?
Remember: Little by little, a little becomes a lot.
SHARE
Comment below and share how it went for you.
SHARE a link or screenshot of something you’ve created.
Also, feel free to SHARE this email on social media or with a friend, and let me know in the comments..
