Money Archives

How to Create Wealth: 7 Tips From Naval Ravikant

How important are long-term business relationships when it comes to creating wealth? Should you rely on active income or passive income? Should you specialize or generalize? The Almanack of Naval Ravikant shares Ravikant’s wisdom on creating wealth and achieving financial freedom. He explains the difference between wealth and money, the importance of passive income, three types of leverage, what it means to exercise good judgment in business, and more. Let’s look at seven pieces of Ravikant’s advice on how to create wealth, along with a practical exercise to get you moving in the right direction.

What Is Wage Inequality and How Does It Happen?

What is wage inequality? Why is wage inequality rising? According to Thomas Piketty in Capital in the Twenty-First Century, wage inequality is inequality of income from labor. Many factors contribute to wage inequality, and it’s not getting any better. Read below for a basic overview of wage inequality, as explained by Piketty.

Inherited Wealth Is Making a Return—And It’s Not Good

How to be Rich and Successful: 3 Steps to Follow

Why are more people inheriting wealth? How does inherited wealth contribute to rising inequality? During their lifetimes, baby boomers accumulated large stocks of capital. As they begin to pass away, their children are inheriting this wealth—but it’s creating an unequal society. Keep reading to learn why a new Gilded Age might be upon us thanks to a growth in inherited wealth.

The Fundamental Law of Capitalism: R>G

What does R>G mean in economics? What is one of the fundamental laws of capitalism? The formula R>G states that the net rate of return on capital (R) is greater than the economic growth rate (G). In Capitalism in the Twenty-First Century, Thomas Piketty claims this is one of the fundamental laws of capitalism. Read more to learn how R>G explains wealth inequality.

The Almanack of Naval Ravikant by Eric Jorgenson

Who’s Naval Ravikant? What wisdom does he have to share about building wealth and happiness in life? Many everyday people strive for wealth and happiness, but most of us struggle along the way and very few seem to achieve both. Still fewer share their insights about how to get there. Entrepreneur Naval Ravikant has become known for doing this online, via Twitter, podcasts, interviews, and blog posts. The Almanack of Naval Ravikant is a collection of those insights on wealth and happiness compiled by business blogger Eric Jorgenson. Keep reading for an overview of The Almanack of Naval Ravikant by

Capital’s Share of Income: Why It Can Be a Bad Thing

What does “capital’s share of income” mean? Should you worry about capital accumulating national income? Thomas Piketty warns that the rising capital-to-income ratio will result in capital accumulating an ever-growing share of national income. In his book Capital in the Twenty-First Century, he explains how this happens and why it’s bad. Continue reading to understand how capital’s share of income contributes to inequality.

Capital-to-Income Ratio: Analyzing Wealth Inequality

What is the capital-to-income ratio? How does it help us understand wealth inequality? According to Thomas Piketty, the capital-to-income ratio is the total stock (meaning the total inventory) of all the assets owned by residents of a country divided by total national income. Piketty further stresses that national capital and national income aren’t the same things. Keep reading for an in-depth look at the capital-to-income ratio.

Annual Wealth Tax: What Is It & How Would It Work?

What is an annual wealth tax? How can it help increase wealth equality? A wealth tax is an annual tax on a person’s net worth, which includes personal assets and ownerships. In the book Capital in the Twenty-First Century, Thomas Piketty says that a global wealth tax has many benefits, including the even distribution of economic resources. Continue reading for an overview of the proposed wealth tax.

Why Passive Income Is Important (Naval Ravikant)

Why should you have passive income? What can passive income do that active income can’t? Working for wages is no way to achieve financial freedom. That’s the view of Naval Ravikant, who argues that passive income is the way to go. He explains why that is, and he identifies what he thinks is the best way to generate passive income. Keep reading to learn Ravikant’s view on why passive income is important.

How Progressive Income Taxes Can Reduce Inequality

What is a progressive income tax? Why should the wealthy pay more taxes? In Capital in the Twenty-First Century, Thomas Piketty argues that since the 1980s, wealth inequality has made a troubling comeback that demands a response. His proposed solution is a progressive income tax. Read more about Piketty’s case for progressive taxation and why other economists think differently.