Building Wealth
Understand How Wealth Is Created
It’s not really about hard work. You can work in a restaurant eighty hours a week, and you’re not going to get rich. Getting rich is about knowing what to do, who to do it with, and when to do it. It is much more about understanding than purely hard work.
Wealth is the thing you want. Wealth is assets that earn while you sleep. Wealth is the factory, the robots, cranking out things. Wealth is the computer program that’s running at night, serving other customers. Wealth is even money in the bank that is being reinvested into other assets, and into other businesses.
Find a Position of Leverage
We live in an age of infinite leverage, and the economic rewards for genuine intellectual curiosity have never been higher. Following your genuine intellectual curiosity is a better foundation for a career
Coding, writing books, recording podcasts, tweeting, YouTubing—these kinds of things are permissionless. You don’t need anyone’s permission to do them, and that’s why they are very egalitarian. They’re great equalizers of leverage. Every great software developer, for example, now has an army of robots working for him at nighttime while he or she sleeps, after they’ve written the code, and it’s cranking away.
Prioritize and Focus
Status games are always going to exist. There’s no way around it, but realize most of the time, when you’re trying to create wealth and you’re getting attacked by someone else, they’re trying to increase their own status at your expense. They’re playing a different game.
Find Work That Feels Like Play
What you really want is freedom. You want freedom from your money problems, right? I think that’s okay. Once you can solve your money problems, either by lowering your lifestyle or by making enough money, you want to retire. Not retirement at sixty-five years old, sitting in a nursing home collecting a check retirement—it’s a different definition.
Well, one way is to have so much money saved that your passive income (without you lifting a finger) covers your burn rate. A second is you just drive your burn rate down to zero—you become a monk. A third is you’re doing something you love. You enjoy it so much, it’s not about the money. So there are multiple ways to retirement.
Another thing that helps: I value freedom above everything else. All kinds of freedom: freedom to do what I want, freedom from things I don’t want to do, freedom from my own emotions or things that may disturb my peace. For me, freedom is my number one value.
How to Get Lucky
Ways to get lucky: • Hope luck finds you. • Hustle until you stumble into it. • Prepare the mind and be sensitive to chances others miss. • Become the best at what you do. Refine what you do until this is true. Opportunity will seek you out. Luck becomes your destiny.
“In a long-term game, it seems that everybody is making each other rich. And in a short-term game, it seems like everybody is making themselves rich.”
I have great people in my life who are extremely successful, very desirable (like everybody wants to be their friend), very smart. Yet, I’ve seen them do one or two things slightly not great to other people. The first time, I’ll say, “Hey, I don’t think you should do this to that other person. Not because you won’t get away with it. You will get away with it, but because it will hurt you in the end.”
Be Patient
One thing I figured out later in life is generally (at least in the tech business in Silicon Valley), great people have great outcomes. You just have to be patient. Every person I met at the beginning of my career twenty years ago, where I looked at them and said, “Wow, that guy or gal is super capable—so smart and dedicated”…all of them, almost without exception, became extremely successful. You just had to give them a long enough timescale. It never happens in the timescale you want, or they want, but it does happen.
This is not to say it’s easy. It’s not easy. It’s actually really freaking hard. It is the hardest thing you will do. But it’s also rewarding. Look at the kids who are born rich—they have no meaning to their lives.
Money buys you freedom in the material world. It’s not going to make you happy, it’s not going to solve your health problems, it’s not going to make your family great, it’s not going to make you fit, it’s not going to make you calm. But it will solve a lot of external problems. It’s a reasonable step to go ahead and make money.
Building Judgment
Hard work is really overrated. How hard you work matters a lot less in the modern economy.
Learn to Love to Read
Reading a book isn’t a race—the better the book, the more slowly it should be absorbed.
The best way to have a high-quality foundation (you may not love this answer), but the trick is to stick to science and to stick to the basics. Generally, there are only a few things you can read people don’t disagree with. Very few people disagree 2+2=4, right? That is serious knowledge. Mathematics is a solid foundation.
I came up with this hack where I started treating books as throwaway blog posts or bite-sized tweets or posts. I felt no obligation to finish any book. Now, when someone mentions a book to me, I buy it. At any given time, I’m reading somewhere between ten and twenty books. I’m flipping through them.
Learning Happiness
We are highly judgmental survival-and-replication machines. We constantly walk around thinking, “I need this,” or “I need that,” trapped in the web of desires. Happiness is the state when nothing is missing. When nothing is missing, your mind shuts down and stops running into the past or future to regret something or to plan something.
Happiness to me is mainly not suffering, not desiring, not thinking too much about the future or the past, really embracing the present moment and the reality of what is, and the way it is.
It’s most obvious if you ever just sit down and try and do nothing, nothing. I mean nothing, I mean not read a book, I mean not listen to music, I mean literally just sit down and do nothing. You can’t do it, because there’s anxiety always trying to make you get up and go, get up and go, get up and go. I think it’s important just being aware the anxiety is making you unhappy. The anxiety is just a series of running thoughts.
When a lot of people say happiness, they mean joy or bliss, but I’ll take peace.
Desire is a contract you make with yourself to be unhappy until you get what you want.
There’s the “five chimps theory” where you can predict a chimp’s behavior by the five chimps it hangs out with the most. I think that applies to humans as well. Maybe it’s politically incorrect to say you should choose your friends very wisely. But you shouldn’t choose them haphazardly based on who you live next to or who you happen to work with. The people who are the most happy and optimistic choose the right five chimps.
Saving Yourself
“Easy choices, hard life. Hard choices, easy life.”
When you really want to change, you just change. But most of us don’t really want to change—we don’t want to go through the pain just yet. At least recognize it, be aware of it, and give yourself a smaller change you can actually carry out.
Number one: read. Read everything you can. And not just the stuff that society tells you is good or even books that I tell you to read. Just read for its own sake. Develop a love for it. Even if you have to read romance novels or paperbacks or comic books. There’s no such thing as junk. Just read it all.
Related to the skill of reading are the skills of mathematics and persuasion. Both skills help you to navigate through the real world.
Philosophy
Honesty is a core, core, core value. By honesty, I mean I want to be able to just be me. I never want to be in an environment or around people where I have to watch what I say.
Another example of a foundational value: I don’t believe in any short-term thinking or dealing. If I’m doing business with somebody and they think in a short-term manner with somebody else, then I don’t want to do business with them anymore.
I would say my philosophy falls down to this—on one pole is evolution as a binding principle because it explains so much about humans, on the other is Buddhism, which is the oldest, most time-tested spiritual philosophy regarding the internal state of each of us.