The One Book That Changed The Way I View My Life
If everything I want to communicate through this channel is written as a book, then this would be it. No book has had a bigger impact on how I see money, wealth, and happiness than this one. This is the one book that I keep coming back every year. And it's the Almanack of Ravikant written by Jorgenson.
For those who don't know Naval Ravikant, he is an angel investor who has invested in more than 100 companies, including Twitter, Uber, and Stack Overflow, when they were just startups. But what made him famous was his Twitter series about building wealth, which got him a large following on social media, where he keep sharing insightful and thought-provoking content.
Jorgenson compiled all of Naval's best insights and advice over the past decade into short, easily digestible chapters. From managing money and relationships to finding happiness in life, the book avoids all the fluff and brings clear, actionable advice. So, in this video, I would like to share the main 8 takeaways from the book and how the book personally influenced me. I hope you find it as useful as I did.
I so wish I had read this book before, not because I wanted to make a lot of money and become rich. I have always been happy with what I have, and I still am. But there were certain things that this book introduced to me that I wish I had realized earlier. And the most important among them is the difference between being wealthy and being rich.
Building Wealth
“You’re not going to get rich renting out your time. You must own equity, a piece of a business to gain your financial freedom.”
Our society has a very narrow perception of making money and getting rich. As a kid, I thought studying well, getting a university degree, and working hard in a 9-5 job was the best way to make money. But now I know it's not the case. I agree, it's the safest, risk-free way to make a living, but it's not easy with a 9-5 job to get to financial freedom. Simply because there is a limit on how many hours we can work in a day. We need to build income sources not bounded by the restriction of time. My channel got monetized recently, so it will earn money through Adsense even when I am sleeping.
“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.”
Still, according to him, earning money shouldn't be our main focus.
“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.”
It's important to understand the difference between the three because people often confuse them with one another. Money is just a means to transfer value from one person to another.
If I do a task for you, I get paid in the form of money for the time I spend on the task. Once the task is done, the cash flow stops. But then wealth is different. Wealth is the assets that keep making money, like this YouTube Channel or published book. Of course, there's the one-time effort, but money keeps flowing as the channel grows or the copies sell. And status is our ranking in society.
Everything we do, at some level, we are doing it for social approval.
Most of us play this kind of status game. But according to Naval, this is a zero-sum game. Because status games are always about who comes first and who's second. And for one person to climb the hierarchical ladder, someone has to move down. But then, wealth creation is a positive-sum game. When we sell a book, we earn money; if the book provides value, the reader also benefits. So it's a win-win for all. Naval believes we should prioritize building wealth over earning money or pursuing status. But then two other factors are more important than wealth.
Health & Happiness
“The three big ones in life are wealth, health, and happiness. We pursue them in that order, but their importance is reverse. When you’re young, you have time. You have health, but you have no money. When you’re middle-aged, you have money, and you have health, but you have no time. When you’re old, you have money, and you have time, but you have no health. So the trifecta is trying to get all three at once”
And these lines struck me a lot. Most people work hard during their 30s to 60s, thinking that when they retire, they can enjoy their retirement life.
But what most of us don't realize is that there is an expiry date for every experience in life. We can't make a trip to Disneyland with our children when we are 70 years old. Technically, we can, but it won't be the same as when we do it when our children are kids. And the things that interest us in our 20s or 30s might not be the ones that interest us in our 60s and 70s. So, to increase your overall lifetime fulfillment, having each experience at the right age is important.
For all of those who have kept things pending to do in their retirement life, I just have one advice. Take one week off, do a mini version of what you plan to do in your retirement, and see if you enjoy all those things. It could be spending time at the beach or taking a cruise. Just see if it's really your thing. If you don't enjoy it as much as you thought, then all those years of waiting will be for nothing. Most people in retirement spend most of their time at home, doing nothing. So when you are young and healthy, find time to do things you love. Because as the days go by, it won't get any easier. But then, who has time to do things we love?
Time
““I don’t have time” is just another way of saying, “It’s not a priority.” What you really have to do is say whether it is a priority or not. If something is your number one priority, then you will do it. That’s just the way life works.”
Everyone from Jeff Bezos to Elon Musk has the same 24 hours in a day. So when we say we don't have time, we are indirectly saying we are as busy as those CEOs. Most of us spend considerable time scrolling on Instagram or watching TV. I am not saying you shouldn't relax and watch TV after a busy day. But then know that it's your choice. If you have time to binge-watch a 10-season series, you can't complain that you don't have time to start working on your passion. It's just that watching TV is more important to you than working towards your financial freedom.
“Value your time. It is all you have. It’s more important than your money. It’s more important than your friends. It is more important than anything. Your time is all you have. Do not waste your time. This doesn’t mean you can’t relax. As long as you’re doing what you want, it’s not a waste of your time. But if you’re not spending your time doing what you want, and you’re not earning, and you’re not learning—what the heck are you doing?”
Life Decisions
“There are basically three really big decisions you make in your life: where you live, who you’re with, and what you do. Because these three factors decide the quality of your life.”
First is where we live. I was in Dubai last year, and the mindset of people is so different from here in Germany. People are crazy about the new iPhone and high-end cars. This is okay if you are rich enough to afford them. But then, this is not the case, and most are living with huge credit card bills. I drive a 10-year-old BMW, and I never felt the need to get a new one even though I can afford it. If I was in Dubai, I am pretty sure I would have got myself a high-end car. There's the "five chimps theory," where you can predict a chimp's behavior by observing the five chimps it hangs out with the most. The most happy and optimistic people choose the right five chimps. Peer pressure is real, and people around us influence our behavior much more than we think.
And the third important decision in our life is what we do. And a major share of it is our habits. We are just a collection of thousands of habits subconsciously running in our minds. Just think of it. The moment we wake up, 90% of the things we do, we don't have to put any serious thought into it. They just happen. So be careful with building your habits. I try to bring as many good habits into my life as possible. I read for 30 minutes every day before I go to bed. I keep the Kindle near my bedside, and when it's my reading time, the lights automatically switch to the reading mode, and the notifications on my phone get silenced. Much of the battle of building better habits comes down to finding ways to reduce the friction associated with our good habits and increase the friction associated with our bad ones.
These three decisions determine our happiness.
Happiness is a Choice
“Happiness is a skill you develop and a choice you make. You choose to be happy, and then you work at it.”
When we think about it, there are no actual emotions in the physical world. Feelings are only sensations that arise in the body to which the mind gives colors. For example, take a negative emotion such as anger. If we are angry at someone, it's a story we tell ourselves about how a person should or shouldn't have behaved the way that made us angry. It's all in the brain, and it all depends on how we handle the inputs that come at it. So, taking control of our emotions is a skill we need to develop, and choosing happiness is part of it.
I am not saying I never get unhappy or I am good at controlling my emotions. Also, I know this may not be true for people suffering from chronic diseases or living in extreme poverty. But I think most of us don't fully appreciate the beautiful life we have in the present. Instead, we are always either planning for the future or regretting the past.
Before coming to Germany for a Job, I got admitted to a German university for higher studies. So, I left my job in India and started preparing for my trip to Germany. But then, there was a delay in getting the student visa, and I lost that opportunity. And this was hard for me. I just sat at home, regretting about the lost chance and worrying about what I should do with my life now. I couldn't accept it and move on for a long time. Then, somehow, I found the courage to return to my old job, started searching for job opportunities in Germany, and moved here one year later.
“You always have three options: you can change it, you can accept it, or you can leave it. What is not a good option is to sit around wishing you would change it but not changing it, wishing you could leave it but not leaving it and not accepting it. That struggle or aversion is responsible for most of our misery.”
Power of Compounding
“All the returns in life, whether in wealth, relationships, or knowledge, come from compound interest. You should be very thoughtful and realize in most things (relationships, work, even in learning) what you’re trying to do is find the thing you can go all-in on to earn compound interest.”
I read a lot about personal finance, and I know the importance of compounding when it comes to my investments. If we invest 10,000 at a 5% interest rate over 50 years, after 25 years, we will get 500,000, but if we can wait for another 25 years, it will grow to 2.5 Million dollars. That's the power of compounding. And it's not just limited to investments. The same is true with relationships and every other area of our life. Always think of the long term. This is where most returns in life are.
“If you have two choices to make, and they’re relatively equal choices, take the path more difficult and more painful in the short term. If you make the easy choices right now, your overall life will be a lot harder.”
Mindful of Our Values
“I think you just have to be very careful about doing things you are fundamentally not going to be proud of because they will damage you. The first time someone acts this way, I will warn them. By the way, nobody changes. Then I just distance myself from them. I cut them out of my life. I just have this saying inside my head: “The closer you want to get to me, the better your values have to be.”
Everyone has a defined set of values in their life. Being compassionate to others is one of my core values. I also believe that I should always stand with the oppressed or the minority. Whenever I am at a crossroads about something and don't know what to do, I always run it against my values and make decisions based on that. So be mindful of our values. That will help you to be clear about whom to accept in your and what to do with your life
Second Life
“There is no legacy. There’s nothing to leave. We’re all going to be gone. Our children will be gone. Our works will be dust. Our civilizations will be dust. Our planet will be dust. Our solar system will be dust. In the grand scheme of things, the Universe has been around for ten billion years. It’ll be around for another ten billion years. You are going to die, and none of this will matter. You’re going to die one day, and none of this is going to matter. So enjoy yourself. Do something positive, Project some love. Make someone happy. Laugh a little bit. Appreciate the moment. And do your work.”
Naval develops on this point with the story of the Sumerian civilization. They were among the smartest people to have ever lived on Earth. They invented writing, the calendar, the wheel, and many others. But can you name any Sumerian? Nope. So maybe after ten thousand years, if humans still exist, they would say, "Americans, I have heard of Americans."
When I feel too egotistical, I think of this picture. This is Earth; if we zoom out a little, this is our solar system. And if we zoom out again, this is our galaxy, and there are millions of galaxies. Now, that small, barely visible dot is our Earth, and I am a tiny speck living there for just a fraction of a time.
And that realization is enough for me to get rid of my ego. Our life is irrelevant in the grand scheme of things other than to ourselves. So enjoy it, make the most of it, and do things that make you happy. I would like to finish it here with a quote from Confucius:
“You have two lives, and the second begins when you realize you only have one.”
This book has more valuable life advice than I can summarize in one YouTube video. So please do yourself a favor and read it. It is available for free to download at navalmanack.com. I promise it will be worth your time, and this will be one book you'll want to read, think a bit, and then read again.
