The Almanack of Naval Ravikant - critical summary review

Have you ever heard of Naval Ravikant? He is an icon in Silicon Valley and startup culture around the world. Also, Naval is a founder of numerous successful companies and an angel investor, betting early on companies such as Uber, Twitter, and Postmates. However, despite his enormous financial success, Naval is more famous for his own philosophy of life and happiness. ‘’The Almanack of Naval Ravikant’’ by Eric Jorgenson is a collection of unique and thought-provoking ideas mostly on wealth and happiness that Naval has shared over the past decade on Twitter, blogs, and podcasts. So, get ready to hear his wisdom!

Making money is a skill you learn

    ‘’I like to think that if I lost all my money and you dropped me on a random street in any English-speaking country, within five or ten years I’d be wealthy again because it’s just a skillset I’ve developed that anyone can develop.’’ Naval believes anyone can become wealthy if they develop the appropriate skills. But before that, he says people need to understand the difference between wealth and money. He says money is something we get for the work we do, while wealth includes ‘’assets that earn while you sleep.’’ For instance, factories, robots, computer programs are wealth. If you rent out your house, it is a form of wealth, too.

According to Naval, becoming wealthy is not connected with hard work. He says, ‘’You can work in a restaurant eighty hours a week, and you’re not going to get rich.’’ However, you will get rich if you know three things: what you should work on, who you should work with, and when you should work. If you do not know yet what you want to develop, set yourself a goal to figure it out.

    Once you create a goal, ask yourself if you are ‘’productizing yourself.’’ In other words, ask yourself whether your idea is authentic to you. Is it myself that I am projecting? Naval says, ‘’If you are fundamentally building and marketing something that is an extension of who you are, no one can compete with you on that.’’ It might be challenging for you to realize what you can uniquely provide - that is why not all of us manage to reach the goal of getting wealthy. However, your advantage lies in the fact that people need things and are willing to pay you for creating them because they don’t know how to do it themselves. Think about it - almost everything around you was once the technology that made someone rich. For instance, cars made Henry Ford rich. Oil was once processed by a technology that made  J.D. Rockefeller rich.

So, the goal of becoming wealthy will be within your reach when you realize how you can use your skill set to provide something for society. However, figuring out what to build is not enough. You need to find a way to mass-produce your technology so everyone can access it.

Learning the skills of decision making

    Remember: if you want to become wealthy, discard the belief that hard work is essential. ‘’Hard work is really overrated,’’ Naval emphasizes. ‘’How hard you work matters a lot less in the modern economy.’’ 

If hard work is overrated, what is then underrated? Naval believes it is judgment. According to him, judgment and wisdom are closely linked. His definition of wisdom includes knowing the long-term consequences of your actions and making the right decisions based on them. And, in business, one correct decision can win everything.

    Embracing reality and seeing things the way they are and not how they should be is necessary for effective decision-making. If you neglect reality, the results can be devastating - you might see your business fail just because you hid the truth from yourself. If something is not going well in his business, Naval says he tries to present the problem to his co-founders, friends, and co-workers. That way, he makes sure he will not delude himself from what is actually going on.

    When you need to make important decisions, such as whether you should start a business or move to another city, say “yes” only if you are certain. Simply ask yourself whether you want something or not. If you start creating a list of pros and cons, forget it. ‘’If you cannot decide, the answer is no,’’ Naval says. 

    If you need to choose between two relatively equal options, opt for the one that will give you more difficulties and pain in the short-term. Naval says, ‘’Most of the gains in life come from suffering in the short term so you can get paid in the long term.’’ For instance, when working out, you suffer in the short-term. However, you are winning in the long run because you are healthier and in better shape.

    Finally, when making decisions, it is crucial to have time off to properly consider them. Take at least one day a week where you have time only to think. ‘’It’s only after you’re bored you have the great ideas,’’ Naval says.

What is happiness? 

    If you ask several people about the meaning of happiness, they will all probably give you different answers. That is because each one of us has our own perception of happiness that evolves through the years. Therefore, the answer that might work for you might not work for someone else. Also, your current definition of happiness is probably different from the one you formed several years ago.

    Naval says that he currently believes that happiness is a default state. ‘’Happiness is there when you remove the sense of something missing in your life,’’ he says. Our lives usually revolve around thinking about what we need. According to Naval, happiness is when you are not trapped in the web of desires. It is the moment when your mind stops regretting the past or worrying about the future. ‘’In that absence, for a moment, you have internal silence,” he says. ‘’When you have internal silence, then you are content, and you are happy.’’ Do you agree with Naval’s vision of happiness? If you don’t, it is perfectly fine. Again, everyone has the right to create their own definition of happiness. 

    People often identify happiness with positive thoughts and actions. However, Naval says this is wrong because ‘’every positive thought essentially holds within it a negative thought.’’ It is all about duality and polarity. For instance, if you say you are happy, that means you were sad at some point. Or, if you consider someone attractive, then somebody else is unattractive. A lot of greatness in life is a consequence of suffering. Therefore, to learn to appreciate the positive,  you have to view the negative first.

    So, happiness is not about positive thoughts or negative thoughts. It is about the absence of desire for external things and acceptance of the current situation. It is about embracing the present. Look at little children - they are generally happy because they live in the present moment. ‘’Everything is perfect exactly the way it is,’’ Naval writes. ‘’It is only in our particular minds we are unhappy or not happy, and things are perfect or imperfect because of what we desire.’’

Building the skill of happiness

    Since happiness depends on how you interpret reality, you can say happiness is a choice, and therefore, you can learn to create it for yourself. ‘’You can increase your happiness over time, and it starts with believing you can do it,’’ Naval says. 

    Happiness is a skill, just like any other - dieting, working out, making money, meeting someone, or having good relationships. You just need to find what works for you. Does meditation make you happy? How about yoga? What if you tried kite-surfing? Do whatever it takes to find your recipe for being happy.

    Naval says you can become happy if you build ‘’good habits.’’ For him, those are not drinking alcohol or eating sugar, and not using social media. Why? Because avoiding those helps stabilize his mood. Essentially, committing to be a happier person involves replacing bad habits with those that increase your long-term happiness. 

    Surround yourself with people you admire and respect and who are generally positive and upbeat, and you will see your happiness increased. The behaviour of chimpanzees, for instance, depends on the behavior of those chimps it hangs out the most. The same can be said about humans. Therefore, choose your friends wisely. Avoid being around negative people or those that often engage in conflict.

    Self-suggestion is also a powerful habit. If you want to be happier, start telling yourself that you are a happy person. Tell your friends the same thing - it will force you to try harder to reach happiness and live up to their expectations.

    How about Naval’s recipe for happiness? First, it includes meditation, exercising regularly, and getting plenty of sunlight. He also says reducing caffeine and screen activities made him a happier and more stable person.

     ‘’You can very slowly but steadily and methodically improve your happiness baseline, just like you can improve your fitness,’’ Naval says. Happiness is all about the choices you make. For this reason, set yourself a goal to be happy and work on reaching it.

Naval’s core values

    Defining your core values is as important as finding the meaning of happiness. What are your core values? Naval says one of his foundational values is honesty. For him, being honest is being able to be himself. When you want to hide who you are, you start lying to yourself and the people around you. He says, ‘’I never want to be in an environment or around people where I have to watch what I say. If I disconnect what I’m thinking from what I’m saying, it creates multiple threads in my mind.’’

    Another core value he mentions is long-term thinking or dealing. Thinking in a short-term manner excludes compound interest, which is essential for a successful business, good relationships, and health. Naval emphasizes, ‘’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 relationships are another thing Naval strongly believes in. Hierarchical relationships require that someone is above or below somebody else. For this reason, Naval says he chooses to interact mostly with those who he can treat as peers, and who treat him in the same way.

    Anger was one of Naval’s core values when he was younger. Now, he says he tries not to be angry or to surround himself with angry people. As the Buddhist saying goes, “Anger is a hot coal you hold in your hand while waiting to throw it at somebody.”

    Having mutual values is a secret to successful relationships. Take Naval’s marriage as an example. At first, his wife was not sure if she wanted to be with him. In the end, she decided she did because they share the same core values, including having a family. Naval says the moment he became a father was the moment he realized life’s meaning and purpose. It made him redefine the things he believed were important and become less selfish.

Final Notes

    Naval’s philosophy of life and happiness attracts readers and listeners around the world. Thanks to Jorgenson, we now have his pieces of wisdom all collected in one place. If you have not followed Naval’s actionable advice by now, try it, and you may discover why they have changed the lives of so many people for the better.

12min Tip

If you liked Naval’s reflections on wealth and happiness, why don’t you try listening to his short-form podcasts at Nav.al where he discusses philosophy, business, and investing?