This is the first in a series of posts exploring & explaining “How to Get Rich (without getting lucky)”, a 2018 Twitter thread by angel investor1 Naval Ravikant that I’ve found to be extremely helpful as I begin building wealth.
I’m convinced this thread contains everything you need to know to begin a journey to prosperity in the US today.
Naval keeps every concept as simple & narrow as it can be, which is great for punchy twitter threads. I’m writing this series of posts because I think we can go deeper. If you’d like t0 read the original twitter (ahem, “X”) thread, I linked to it at the end of the post.
Seek Wealth, Not Money Or Status
The first concept? Most people have a screwed-up idea of what it means to be rich. Being rich isn’t about having a lot of money. Read that again.
Being rich isn’t about having a lot of money.
The wealthy know that a high salary will never make them rich. If you’re a neurosurgeon making $1,000,000 a year & you spend (or are taxed) $1,000,000 a year, but don’t own any assets that generate passive income, you aren’t rich. (Though you probably have a fun lifestyle!)
As soon as you either decide to retire or are forced to stop working, your life will get far worse overnight. You’ll be used to spending hundreds of thousands on a car & you suddenly won’t even be able to afford an oil change for it!
Ignore Status Games To Focus On Wealth
Similarly, being rich isn’t about being famous – at all.
Countless celebrities you’ve heard of – Nicholas Cage & his dinosaur skull is one popular example – are drowning in debt right this moment, despite being very well-paid. Why?
In part, it’s because they focused on playing “Status Games” like acting or activism.
If you’re seeking fame or notoriety, that’s fine – just close this page.
If you want to be rich, there are literally a million easier ways to do it than becoming a famous actor or musician. Remember, there are no bonus points for difficulty when it comes to building wealth!
So…
If we know that wealth is NOT status and wealth is NOT money, what IS it?
Wealth Is The Ownership Of Assets
Naval explains that employment (or “renting out your time”) will never make someone rich. Think about your day to day life – it makes sense, right? Who makes more money, a hardware store’s general manager or its owner?
The general manager’s salary for a Home Depot tops out in the low six figures. Notably, Home Depot ($HD) is a publicly traded company, which means we know roughly how much money they make across their ~2,300 stores.
The average Home Depot location does more than $60,000,000 in revenue2 and $7,000,000 in profit each year!
Now, let me ask you again… would you rather own a Home Depot or run one?
Obviously, you can’t just start a hardware store tomorrow – let alone one with the relationships, locations, experience, capital, and brand that Home Depot has. You couldn’t do it with your pocket money or even a million dollars.
Even if you were great at it, you’d struggle to build one over a lifetime, let alone the next 5-10 years! That’s why it’s important to pick games (businesses) that are rewarding to play & win.
The next post in this series is going to be about how to pick the right games and use different kinds of “leverage” to start making a big impact on your personal finances & the world without a lot of $$$.
If you want to be notified when I post the next issue in this series, consider subscribing to my newsletter using the form below!
Side note: if you think "low six figures" sounds pretty good, you should keep reading my blog. Low six figures is a great place to start, but you can do so much better if you make smart choices, save money, & work hard. There really are levels to wealth, and a six figure salary isn't even the first rung of the ladder. This isn't a boast - I'm barely starting down this path myself.
The original thread can be found here
- An angel investor provides initial seed money for startup businesses, usually in exchange for ownership equity in the company.
- Revenue is the money generated from normal business operations – also known as sales or “turnover”
