“You’re not going to get rich renting out your time.”

Photo by Anik Mandal on Unsplash
Naval Ravikant is an icon in Silicon Valley and startup culture around the world.

He founded multiple successful tech companies and is an angel investor in more than 200 start-ups.

But Naval Ravikant is more than a financial success — he’s one of the most fascinating thinkers of our time.

His biography, The Almanack of Naval Ravikant, contains a wealth of wisdom on how to live life, build wealth, and make better business decisions.

Read also: Money rules I religiously follow (eye opening)

On Financial Freedom

As Naval said, “If you don’t own a piece of a business, you don’t have a path towards financial freedom.”

He continues, “Without ownership, when you’re sleeping, you’re not earning. When you’re retired, you’re not earning. When you’re on vacation, you’re not earning.”

Whether it’s through starting your own company or investing in stocks, ownership is key.

“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.” — Naval Ravikant

Ownership separates your time from your earning capabilities — one of the core principles for financial freedom.

On High-Value Skills

Naval Ravikant said, “Making money is not a thing you do — it’s a skill you learn.”

“I like to think that if I lost all my money and you dropped me on a random street in any English-speaking country, within five or ten years I’d be wealthy again because it’s just a skillset I’ve developed that anyone can develop,” he expands.

Making great money comes from developing high-value skills such as:

Sales
Marketing
Coding
Entrepreneurship
Investing
Analytical Skills
Learning Quickly
The better you get at these high-value skills, you better you’ll be financially compensated.

The highest-value skills are centered around learning to sell something or learning to build something (products, software, or businesses).

“Learn to sell, learn to build. If you can do both, you will be unstoppable.” — Naval Ravikant

When you master high-value skills, you’ll be able to create more value in a shorter amount of time than most others.

Your ROI per work hour increases exponentially.

This is why Naval said, “Earn with your mind, not your time.”

On Emotional Control

“Investing favors the dispassionate. Markets efficiently separate emotional investors from their money,” said Naval Ravikant.

Emotional control is one of the most important traits for investors to develop.

You want to stay calm and rational when most investors are either over-pessimistic or over-optimistic.

Investment decisions based on emotions are hardly ever the right ones.

Learn to master your mind and make financial decisions based on logical and rational thoughts rather than emotional impulses.

This is why Naval studies mental models — foundational principles for rational decision-making.

“I basically load my head full of mental models,” Naval said.

Studying mental models helps you make better decisions when times are chaotic or stressful.

Read also: 9 fun habits that will make you more money (powerful)

On Playing Long-Term Games

“Play long-term games with long-term people. All returns in life, whether in wealth, relationships, or knowledge, come from compound interest,” said Naval.

In investing, this means following a long-term buy-and-hold strategy rather than short-term trading or trying to time the market.

In fact, studies show the most active stock traders underperform the S&P 500 by an average of 6.5% per year.

Impatient investors tend to get punished — patient investors tend to be rewarded.

As Naval said, “Sticking with it for decades is really how you make the big returns in your money.”

Play the long-term game.

CONTRIBUTED BY Jari Roomer

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