Or How to get Rich Slowly!
This article is based largely on a podcast and series of tweets by naval Ravikant. I was stunned when I first heard them by how well thought out and put together they were and I have since found myself thinking of the various points made at different times during which they have helped me.
I initially started taking notes to help me better internalise the material but have since written them up in my own way and expanded on the original.
This is a huge post so I am going to be releasing it as I get through my notes to rewrite it. This is part 1 and part 2 will be here as soon as I get through the next section.
The Difference between wealth, money and status.
Wealth money and status seem very tightly connected, almost to the point of being the same thing and are often used almost interchangeably. Certainly, most people would have to think hard about the difference between wealth and money, if they could distinguish the two at all. Status now is so closely linked to how much money you have that it may as well be the same thing most of the time.
In reality though, the 3 are very different things and it is important to understand that difference.
Wealth Consists of assets that earn money while you are asleep.
Wealth is not just having a lot of money. Although invested money that earns you money without your direct involvement would be wealth.
There are many things that could be wealth and they would also be called assets. For example.
- Computer programs
- Business investments
- Even a house which it generally a liability, could be wealth if it is treated in the correct way.
The key thing about wealth is that it buys you freedom – freedom to choose how you spend your time.
You won’t get wealth until you really want it and deliberately pursue it. (Its not just going to happen without you making it a priority). This is because everyone wants it and many people are working hard towards gaining it, so the easy paths are all taken.
Money is social credits or IOUs for the value that you’ve created for society. Money is how we transfer wealth.
What game are you playing?
The two games that you can play are the money game or the status game.
People who don’t believe they can get money may start trying to put down those who are pursuing it, or in fact anyone. They are playing the status game and claim status rewards by placing them self above others and by necessity putting them down.
Wealth is a positive sum game – my success increases the global potential for success
Status is a zero sum game – my success takes away from your possible success as it is a hierarchy there can only be one person at the top.
Evolutionarily we are programmed to play the status game. We lived in small groups and a higher status would directly impact your choice of mates and your survival options. In most of the world, this is not really the case though and there are much better options open to us.
You should avoid the status game because it makes you competitive. That competitiveness makes you take away from others and that harms your ability to cooperate.
Cooperation is one of our key skills and it is a vital skill if you want to succeed and create something which you release to the world.
The root of all evil?
There is a belief that money is evil and that making money is evil.
In many places there is a predator/prey situation where those in power can take or steal from people and do that to acquire money, but this is not the case in most of the western world.
Focus on wealth creation which increases the size of the pie for everyone and does not force you to take from anyone.
All wealth is created by someone – it doesn’t need to be stored.
Everyone in the western world is richer than anyone was 200 years ago
If everyone has the knowledge and skills of a good hardware engineer and the knowledge and the skills of a good software engineer who would create robots for virtually everything we would all live in absolute abundance.
The capitalist system is hardwired return to tracking debt and credits – so it allows us to cooperate across genetic boundaries. Humans are the only species able to do this cross boundary corporation
Societies that shun the free-market are reduced to playing status game and make the world worse for everyone.
Any organism can only survive so many parasites
Part 2 will be coming soon…