Book SummaryThe Almanack of Naval Ravikant, by Eric Jorgenson

1-Page Summary1-Page Book Summary of The Almanack of Naval Ravikant

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.

Born to poor parents in India, Ravikant moved with them to New York as a child. From those humble origins, he eventually achieved tremendous business and financial success as a Silicon Valley entrepreneur in the early 2000s. He’s...

The Almanack of Naval Ravikant Summary Focus on Building Wealth, Not Money

Ravikant distinguishes wealth from money. To him, wealth is owning assets that grow over time without further inputs from you. Money, by contrast, is merely the means of distributing wealth and time. The equity you own in a growing landscaping company is wealth; the cash people pay you for mowing their lawn is money. According to Ravikant, it’s more important to focus on generating wealth than on generating money.

(Shortform note: Ravikant’s definition of wealth differs from the standard understanding of the concept. Wealth is typically understood as net worth: The sum of your assets, such as your savings and your investment accounts, minus your liabilities, such as your mortgage and student loans. Owning assets that grow over time could be considered a part of your wealth according to this definition, but it doesn’t encompass all that wealth is.)

To Ravikant, the best measure of wealth is financial freedom. When you achieve financial freedom, you have enough income or assets to cover your expenses for the rest of your life without ever having to work. This, to Ravikant, is why you should pursue wealth:...

The Almanack of Naval Ravikant Summary Leverage Specialization and Good Judgment to Generate Passive Income

Generating passive income requires the leverageable skills of specialization and good judgment. Let’s take a look at these three concepts: leverage, specialization, and good judgment.

Leverage

Leverage is the ability to multiply effort. In the context of building passive income, this is helpful because any investment (effort) you put into an opportunity can be magnified by the leverage applied to it. Ravikant distinguishes between three types of leverage.

1. Labor: The people who work for you provide leverage through their labor—for example, a task done by two people should take half as long as a task done by one. Ravikant believes this is the worst kind of leverage simply because it’s hard to manage people.

(Shortform note: While Ravikant doesn’t prefer labor as a means of leverage, successful business owners generally have at least some employees. Experts argue that managing employees is a critical skill to building successful businesses.)

2. Money: This is a good form of leverage because it can amplify any decision you make. In...

The Almanack of Naval Ravikant Summary Build Long-Term Business Relationships

Good relationships are invaluable for building wealth because working with people is far more productive and efficient than going solo. For Ravikant, building relationships in business isn’t a matter of short-term networking: It’s a matter of identifying capable and ethical people and building long-term relationships with them. It’s far more effective to simply stick with competent ethical people and deepen your rapport with them than to seek out more people: In business relationships, quality is more important than quantity.

If you’ve built a foundation of trust with someone, and they’ve shown themselves to be consistent, honest, and fair, keep working with them. In this way, your business relationship will grow more efficient over time as you both come to know each other better.

(Shortform note: Some business...

The Almanack of Naval Ravikant Summary How to Build Happiness

In the rest of this guide, we’ll consider Ravikant’s ideas about building happiness. True happiness, as he understands it, comes from being at peace—another way to express this is: True happiness is fulfillment. When you have this happiness, you don’t long for anything more, and you feel your life is complete.

(Shortform note: Research on happiness suggests that focusing on being happy may actually undermine your ability to achieve the fulfillment Ravikant describes. Researchers have found that those who highly value happiness have difficulty feeling happy under conditions that should make them feel that way. They suggest this is caused by people feeling disappointed in their experience of their emotions—they may not feel as great as they expected. Paradoxically, then, one important part of learning to be happy may be not making happiness a high priority.)

In this section, we’ll consider how you might arrive at this place of fulfillment. While Ravikant believes that being wealthy can help you get there, happiness isn’t dependent on external circumstances—it’s a choice. Making that choice is a...

The Almanack of Naval Ravikant Summary The Habit of Acceptance

One habit Ravikant advocates is acceptance. Acceptance is simply being content with a circumstance no matter what—it’s a kind of freedom. As he sees it, it’s freedom from things like frustration, expectation, desire, and so on. Practicing acceptance will help you find contentment. In particular, practice the habit of acceptance in two areas of life.

Freedom From vs. Freedom To

Ravikant distinguishes between freedom from obstacles (negative freedom) and freedom to do what he wishes (positive freedom). This distinction isn’t original to him—it has a long history going back, by some accounts, to the 18th-century philosopher Immanuel Kant and was broadly used by many thinkers throughout the 20th century.

For instance, psychoanalyst Erich Fromm argued that negative freedom on its own inevitably leads to feelings of isolation and meaninglessness. He believed that positive freedom, by contrast, facilitates a sense of meaning and connectedness to...

The Almanack of Naval Ravikant Summary The Habit of Self-Care

The second type of habit Ravikant suggests is self-care. This type of habit encompasses several practices that can help keep your body and mind conditioned to support your happiness.

Caring for Your Body

Your experience of the world is mediated by your physical health, according to Ravikant. This is one of the reasons he’s chosen to prioritize his own physical health above all other things. If his body isn’t functioning well, his mind won’t be able to function well, and he’ll have a harder time dealing with life circumstances. He suggests incorporating the following habits into your own life to care for your body.

(Shortform note: Researchers find that the connection between the health of your body and the health of your mind works both ways: As Ravikant suggests, poor physical health is a risk factor for poor mental health, but poor mental health is also a risk factor for developing chronic diseases and infirmities.)

1. Eat well. Ravikant suggests the paleo diet, which consists of...

Shortform Exercise: Prepare to Build Wealth

Ravikant offers several practical tips for building wealth. In this exercise, you’ll consider how you can take steps toward financial success.

Ravikant considers passive income to be one of the most effective ways to build wealth. If you don’t yet have any passive income streams established, consider what opportunities you may have to establish such a stream of income. Typically, experts recommend a few different avenues of passive income, such as traditional investments that pay dividends, owning real estate, selling products, and so on. In the space below, identify at least three potential passive income opportunities you might pursue over the course of this year.

Shortform Exercise: Prepare to Build Happiness

Happiness, to Ravikant, involves caring for both your mind and your body. In this exercise, you’ll consider how you can take steps on both fronts.

If you don’t already regularly exercise, write three to five activities that interest you. Maybe you’re interested in dancing or rock climbing, playing baseball or swimming. Once you’ve done that, brainstorm when you might try one of these activities this month.