You Won’t Get Rich Renting Out Your Time – Naval Ravikant, Podcast Notes #2
Naval Ravikant is a legendary angel investor and someone that I have looked up to for years.
He’s an incredible investor, but he’s also an incredible philosopher. He tweeted out recently that he now had a podcast available on Spotify and I was stoked to check it out.
I’ve already listened to every episode on there (they’re 2-8 minutes in length) and I think they’re great. It seems that he’s uploading new ones regularly as well which is exciting.
In the podcast that I listened to today, Naval talks about a Tweet he sent out saying that you won’t get rich by renting out your time.
Renting out your time means working for someone in exchange for compensation based on time put in.
For example, working a job for $10 an hour. Even working as a doctor and making $1000 an hour.
In this podcast, Naval gets to the root of the problem and explains how true wealth is created — by owning IP (intellectual product), by starting a business, by doing something highly creative, by adding value to the world, etc.
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Note on the formatting of this post —> I wanted to try something new with this format so I mixed my notes with some paraphrasing from what Naval actually said on the podcast.
The following is not a strict translation of what Naval said, but rather, a mixture of what I wrote down that Naval said along with my extra notes that I wrote while listening to the podcast. Let me know in the comments if you like this kind of “loose” formatting in comparison to the more rigid notes that I usually take (direct quote followed by my commentary).
My Notes (With Paraphrasing from the Podcast):
This is probably one of the most important points. People seem to think that you can make money and create wealth through work.
The problem is that your inputs are closely tied to your outputs.
You put in hours and then you are rewarded for the hours you put in.
You don’t earn while you’re sleeping. You don’t earn while you’re retired or on vacation, etc.
When you’re working for someone else, they’re the ones who are taking the risk and who are holding the business or the intellectual property. They’re going to pay you the bare minimum that they have to to get you to do the job.
Creating wealth or “getting rich” is about creating value for society. Typically, when you work a job, you are simply doing repetitive tasks and not really creating something new and valuable for society. Because of your set role - something that is taught in a school - you are essentially replaceable.
Under this model of getting a job:
- Your inputs are tied to your outputs
- You’re replaceable
- You’re likely not adding any creative/new value to society
People who make “real” money and create massive wealth are typically the ones who start their own business or invest and get equity in business.
You want to find some business or some kind of job where your inputs don’t match your output.
For example, a job like software engineering.. In that job you can work 1 hour and it can have an incredibly impactful footprint or you could work 1000 hours and the code could all be shit and never end up getting used. The inputs and outputs are highly disconnected.
Look for leverage.. Not financial leverage - tools. Computers are a tool that software engineers use to make a massive impact.
Tools and leverage help create this disconnection between inputs and outputs. Creativity plays a big role as well — the higher the creativity, the more the potential disconnect between input and output.
What creative work are you doing to add value to the world right now?
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Very true and that is why employees should be encouraged to think more like employers. That's what I like about partnerships, apprenticeships, the ability to meet in the middle like independent contractors. Artists tend to understand the philosophy better than others. Owning land helps for example. Seeking after careers is another kind of example. It's about finding win-win situations in jobs, in the situations you find in your life. Find ways to think bigly in the art of the Trump deal in your life. I'm resteeming this article.
“employees should be encouraged to think more like employers”
I really like that bit. Imagine 2 employees at a company. One works for the company and does what’s required of them and the other works so hard and so passionately that it seems as if they themselves own the business.
For those who need a job, that is how a job should be worked. Over time, knowledge is gained and that employee can start their own business or gain equity somehow and achieve long-term wealth as Naval talks about in this podcast.
Thanks for the great comment and the RS!!
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Awesome.
Thank you for this recommendation! I just added it to my list of podcasts and will listen to it now!
My pleasure! I’m a huge podcast advocate and highly recommend this one!
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