Cracking the Code of Wealth: Wealth Creation Secrets by Naval Ravikant

Naval Ravikant is one of the great thinkers of our time. He is an entrepreneur and an investor who has invested in more than 200 companies including Uber, Notion, and Twitter. He talks about happiness, health, and life's philosophies.

He did a tweetstorm in 2018 about "How to Get Rich (without getting lucky)" which attracted millions of eyeballs, with over 223k+ likes and around 70k+ retweets. He grew up poor and now has a net worth of over $65 million. Let's discover what he shared about wealth creation.

Rule 1: Find and Build Specific Knowledge. Specific knowledge is something that comes naturally to you because it cannot be taught, it can only be learned. It is something that feels like play to you that you were doing effortlessly as a kid or a teenager.

It’s a weird combination of unique traits from your DNA, your unique upbringing, and your response to it. Focus on things that you are really into, and master things that feel like play to you. The only skill required from you is to be a perpetual learner.

Rule 2: Switch From Wage Work To Ownership. “You are not going to get rich by renting out your time. You must own equity — a piece of business — to gain your financial freedom.” — Naval Ravikant Without ownership, your inputs are only linearly related to your outputs.

Even doctors and lawyers make big money when they open their own firms, the firm or the private practice creates a brand, and the brand attracts people. You can invest in stocks, start a business, or build a product that you can patent and sell to the masses.

Rule 3: Create Leverage To Build Wealth

There are broadly three forms of leverage: 1. Leverage through Labor:

The people working for you. It’s one of the oldest forms of leverage and one of the worst. Because managing people is messy and requires incredible leadership skills.

2. Leverage Through Money:

You are leveraging money to make more money, it’s the dominant form of leverage in the last century. It allows you to purchase assets that have the potential to increase in value, resulting in a return on investment.

3. Leverage through Code or Media:

This includes books, YouTube videos, blogs, podcasts, and apps for this all you need is a computer and specific knowledge. It is the highest form of permissionless leverage. It doesn’t require tons of money.

The new generation’s millionaires will be made through this form of leverage. All the tech entrepreneurs, app developers, big YouTubers, content writers, and authors are all using this form of leverage to create wealth. Create it once and sell it forever.