Naval Ravikant rated his own happiness a 2 out of 10 while already very wealthy

Think of the almanac of Naval as like a cheat sheet to a happier, wealthier life. One of the things that struck me most about Naval is his perspective on wealth. He sees it not as something you're born into, but as a skill you can develop, like playing an instrument or mastering a sport. He argues that if he lost everything and was dropped in any English-speaking country, he could rebuild his fortune within a decade. That's a bold statement, but it highlights a crucial point. Wealth is created through a specific set of principles and actions. Naval was a famous investor in Silicon Valley, but he became famous with the rest of the world when his tweet storm, how to get rich without getting lucky, went viral.

In this series of tweets, he laid out his road map to financial freedom. and I'm going to break it down for you right now. First off, he stresses the importance of specific knowledge. This isn't the stuff you learn in a classroom. What you learn in school is important as well. But specific knowledge is the unique blend of your passions, experiences, and innate talents. It's about becoming the best in the world at what you do. Even if you have to redefine what you do to make that happen. Think about it. Who's going to compete with Joe Rogan or Alex Cooper on their podcasts? Nobody. They have carved out their own niches by being authentically themselves.

That's specific knowledge in action. Let's look at another example. Imagine someone who's always been fascinated by history and has a knack for storytelling. They could leverage this specific knowledge by creating a captivating historical YouTube channel or writing a best-selling historical fiction novel. They're not just regurgitating facts. They're bringing history to life in a way that only they can. Now, I want you to think about your own life. What are you truly passionate about? What makes you tick? What could you spend hours doing that looks like work to others but feels like play to you?

That's where your specific knowledge lies. And once you've identified it, you need leverage. This is the force multiplier that allows you to scale your efforts and achieve extraordinary results. In the past, leverage meant capital or labor. But in today's digital age, code and media are the new powerhouses. Think about it. You can write a piece of software or create content that works for you while you sleep, reaching millions of people without expending additional effort beyond what it took to create the original. So, you've got specific knowledge and leverage. The final piece of the puzzle is accountability.

This means putting your name on your work, taking risks, and owning the outcomes. When you do this, you attract responsibility, equity, and ultimately wealth. Now digging deeper into wealth, Naval draws a clear distinction between wealth and money. Money, he explains, is simply a tool, a means of exchange. It's how we transfer wealth. Wealth, on the other hand, is about owning assets that generate value, even while you sleep. Think of it this way. Money is like the water flowing through a pipe, while wealth is the pipe itself. Money comes and goes, but wealth is built over time through smart decisions and strategic investments.

And how do you build wealth? Naval points to owning equity as a key. This can be through starting your own company, investing in promising startups, owning real estate, or acquiring stock. The important thing is to shift your mindset from trading your time for money to owning assets that generate value. This is how you break free from the limitations of a traditional job and create true financial freedom. Now, let's shift gears and talk about happiness. Because what's the point of wealth if you're not happy, right? Naval believes happiness is a skill, not a trait. It's something you learn and cultivate just like wealth.

He recounts how he used to struggle with happiness, rating his own level as a dismal 2 out of 10 despite being very wealthy. But through deliberate practice, he was able to transform his mindset and experience genuine joy. So how do you learn happiness? [gasps] Well, Naval emphasizes the power of mindfulness and meditation. By observing your thoughts and emotions without judgment, you gain a deeper understanding of yourself and develop the ability to choose happiness consciously. Have you ever noticed how many of our thoughts are fear-based or negative? Meditation helps us break free from this mental chatter and experience the peace that already exists within us.

And meditation doesn't have to be complicated. It can be simply sitting with your thoughts and watching them pass by for 10 minutes. It can be focusing on your breath and every time your attention drifts to your thoughts, refocusing on the breath. If you're worried about where to begin, the Waking Up app is a great place to get started with guided meditations by Sam Harris. But happiness isn't just about internal work. It's also about creating an environment that supports your well-being. Naval highlights the importance of surrounding yourself with positive people. Your five chimps, as he calls them.

These are the individuals who uplift and inspire you, who challenge you to grow, and who share your values. Imagine you're hanging out with friends who are constantly complaining or gossiping. How do you think that's going to affect you? Are you going to be more inclined to complain and gossip? Now, contrast that with being around people who are optimistic, supportive, and genuinely interested in your well-being. It's a complete gamecher. Think about it this way. The people you spend the most time with have a profound impact on your thoughts, beliefs, and ultimately your happiness. If you're surrounded by negativity, it's going to be much harder to cultivate a growth mindset.

But if you're surrounded by people who are happy, supportive, and driven, their energy will rub off on you. And here's another crucial point. Naval emphasizes that you should work with people you'd be happy working with for life because the quality of your relationships has a direct impact on your happiness. Not to mention that most gains in business are achieved by working with long-term people, playing long-term games. Finally, Naval emphasizes the importance of acceptance. Life is full of ups and downs, and learning to accept the things you can't change is crucial for finding peace and happiness.

Think about it. Every desire is a chosen unhappiness. When you're constantly chasing after something, you're creating suffering for yourself. This doesn't mean you can't have goals. The upside of a goal is that it gives you direction and a psychic structure. But understanding the downside of too many goals and getting stuck on the hedonic treadmill is critical as well. There's another powerful concept from Naval that I want to explore with you. Judgment. He defines judgment as wisdom applied to external problems. Essentially, the ability to make sound decisions based on a deep understanding of the long-term consequences of your actions.

And in today's world where leverage can amplify the impact of our choices, good judgment is more valuable than ever. One right decision can have a ripple effect creating massive wealth and positive change. So how do you cultivate good judgment? Naval recommends building a strong foundation of knowledge through reading particularly in areas like math, science, and philosophy. But if you're not inclined to read much, he says the key is to read what you love until you love to read. And if you're already a big reader, when it comes to non-fiction, seek out the source materials as much as possible. Ryan Holliday's work is a great place to get started with stoicism, but there is no replacement for reading Marcus Aurelius's meditations yourself.

He also stresses the importance of collecting mental models, which are essentially frameworks for understanding the world. These mental models help us see patterns, make predictions, and make better decisions in complex situations. One example of a mental model is the principal agent problem. He explains this as a situation where a person, the agent, is making decisions on behalf of another person, the principal. The problem arises because the agent may not have the same incentives as the principal, and may therefore make decisions that are not in the principal's best interest. As Julius Caesar said, if you want it done, then go and if not, then send.

Meaning that if you want something done right, you have to do it yourself. So there you have it. The essence of Naval's wisdom on wealth, happiness, and judgment. Remember, these are just starting points. The real journey begins when you read the almanac of Naval in his words and take these principles and apply them to your own life. That's it for this week's edition of Distilled. If you enjoyed this episode, please share it with a friend and subscribe. Until next time, keep asking questions, don't accept the status quo, and be curious. [music] [music] [music]