Naval’s Periscope Session – 6/6/18

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Intro
  • Check out Naval’s latest tweet storm on how to create wealth
    • Each tweet is written, so it can stand alone – this was deliberate, it makes the entire tweet storm randomly accessible 
    • This Periscope will be discussing that
    • “Everyone pretends like they don’t want to make money, but in reality, everyone does want to make money”
    • Money buys you freedom in the material world
      • It won’t make you happy, but it will solve a lot of your external problems
    • There are many people who are attached to not being happy/making money, so sometimes it’s difficult to talk about these topics
      • These people don’t want to feel bad about their choices, so they tend to shut down these conversations
    • “Everyone in the world can be happy, and everyone in the word can be wealthy”
      • It’s just a matter of education, know-how, and effort
Ownership vs. Wage work
    • If you’re getting paid for renting out your time, you can make good money, but you won’t make the kind of money that can really give you freedom – the passive income that can make you money while you’re on vacation
    • You want to own equity – “If you don’t own equity in a business, your odds of making money are slim” – Ownership is important
productize yourself
  • If you can only remember two words from the tweet storm – PRODUCTIZE YOURSELF
    • How you package yourself in a product
  • “Create a product out of whatever it is that you naturally and uniquely do really well”
  • If you compete at being someone else, you won’t be the best in the world at it, and in turn you won’t get rewarded properly for it
compound interest
  • Compound interest – keeps adding on itself, so that you end up with thousands of times your original investment
  • Compound business relationships – people trust you when you have shown yourself in a visible, and accountable way, to be a high integrity person
    • This can apply to your reputation, as it’s compounded over time
  • If you’ve worked with the same person for a long enough time, the good relationship is compounded to a place where trust tends to dominate
  • “In the intellectual domain, compound interest rules”
  • “When you find the right thing to do, and people to work with, invest deeply into that, and stick with it for decades” – THAT’S how you make the big bucks
How do you escape the 9-5?
  • It’s difficult
    • You get suck into being busy, and the job chews into all your time – it makes it hard to work on anything else
  • Find a career/job/education where you will end up in a business where the inputs and outputs are disconnected
    • 2000 years ago, the inputs and outputs were connected – effort=result
    • Nowadays – we have knowledge worker jobs
      • A good developer can write a good piece of code that will generate millions of dollars over the next few years
      • “Navigate towards a career where you’re tracked on the output”
      • Sales is a good example, or product building etc.
      • NOT a customer service role
Can 7 billion people all productize themselves?
  • Yes
  • Assume everyone had maximum education and practical knowledge
    • Naval thinks if this were the case, within 5 years everyone would be independently wealthy, robots would be doing the manual work, and we’d all be doing creative work
  • Wealth is not a zero sum game – it’s a positive sum game
  • 7 billion people can have 7 billion products
Skin in the Game: Hidden Asymmetries in Daily Life
  • Written by Nassim Taleb
  • The best book Naval has read in 2018
sales skills
  • Sales skills are a form of specific knowledge
  • You can be trained, but there’s such a thing as a natural, and it’s easy to identify one
  • How to improve? – read Influence: The Psychology of Persuasion by Robert Cialdini
    • The book talks about strategies we can use to persuade people
    • CLASSR 
      • Consistency – people want to be consistent with their past actions
      • Liking – if someone likes you, they’re more likely to be persuaded by you, so be nice to people
      • Authority – you’re more likely to listen to a doctor for medical advice than a non-doctor
      • Scarcity – we want what’s scarce 
      • Social Proof – monkey see, monkey do
      • Reciprocity – people always want to repay you
    • “Persuasion is one of foundational skills that everyone should learn”
Additional Foundational Skills people should have in addition to persuasion
  • Basic mathematics – probability and statistics are important for personal finance
  • Basic accounting
  • Calculus – understand rates of change, be able to measure the change in small discrete/continuous events
specific knowledge
  • Specific Knowledge – A combination of unique traits from your DNA, combined with your unique upbringing and your response to it
  • Figure out what it was you were doing as a kid, almost effortlessly, that you didn’t even really consider a skill, but people around you would notice
programming
  • Is not a commodity skill
  • In the future, computers will not write code – coding is a general AI task
    • It is not likely to be automated in our lifetimes
  • The top coders in the world can make billions of dollars of value, while a not so good coder can well, create no value
    • The spread is so large
What would Naval major in today if he were to go to college?
  • Learn things in college that you can’t learn by yourself
    • Mathematics, programing, physics, medicine etc.
    • If you can learn STEM disciplines on your own, you may not need to go to school
  • One of the advantages of a college education is an alumni network
desires
  • We all have many desires in life
    • When you’re desires are split up, you create anxiety, and this forces you to lose focus
    • Pick the one thing you care about more than anything, and ignore everything else
    • “If you’re going to make money, it has to be your number one desire”
    • “It’s very, very hard to be successful in business while trying to live a well rounded life” 
decision making
    • Naval’s 3 decision making heuristics
      • When faced with a difficult choice, if you can’t decide, the answer is no
        • Modern society is filled with options – “We are biologically built to not realize how many choices there are, because we evolved in tribes of ~150 people, where if you pass up one choice, the second one never comes along”
        • When you choose something, you often get locked in for a long time
        • Only say yes when you’re pretty certain
          • If you have to create a pro/con list – the answers no
      • If you have 2 choices to make, and they’re relatively equal (it’s 50/50), take the path that’s more difficult and more painful in the short term
        • Short term pain, means long term gain
        • Our brain tends to overvalue the choice with short term happiness, and is trying to avoid the one with short term pain
        • Lean into the pain
        • “Most of the gains in life come from suffering in the short term, so you can get paid in the long term”
        • “Hard choices, easy life. Easy choices, hard life.”
      • In times of interpersonal conflict, make the choice that will leave you more equanimous (internally calm) 
        • Peace of mind is a precursor to happiness
        • Happiness is one of those things that can’t be chased directly – if you do chase it, you’re chasing pleasure
          • Pleasure is just a high, which you eventually come crashing down from
          • “If you actually want to be happy and content, that comes from peace”
Be impatient and willful
  • Naval hates wasting time – he’ll  often leave a dinner/party at a moments notice if he feels it’s a waste of time
    • “The moment I figure out something is a waste of my time, I leave immediately”
    • After looking back now, Naval realizes most of his past business trips were a waste of time
      • “Business trips are almost never worth it”
    • “Value your time, it’s all you have”
failure
  • “If you didn’t have failure, you’d never improve”
  • Failure causes us to change, and through that, we get growth
  • If you always got what you wanted, you’d probably be married to your high school sweetheart and be a manager at your first job
99% of effort is wasted
  • Most of what you’ve learned in school, doesn’t really apply to your life now – sure you learned from it, but according to goal oriented life, only about 1% of the effort you put in pays off
  • In most aspects of life, try to find the thing you can go all in on with compound interest
    • In dating – the minute you think the relationship won’t lead to marriage, you should probably end it
    • Be more conscious of what’s a waste of your time
    • “When you find that 1%, go all in, and forget about the rest”
The Last tweet in Naval’s Tweet Storm
  • “When you’re finally wealthy, you’ll realize that it wasn’t what you were seeking in the first place. But that’s for another day”
  • Making money won’t make you happy
  • Making money will solve your money problems – it removes a set of things that are in the way of making you happy
  • Happiness comes from peace
  • To be happy – “You truly have to believe that happiness is a choice you make and a skill you can develop” – It is NOT an intrinsic quality
  • You can improve your happiness baseline, just like you can improve your fitness
  • “The first step to being happier, is to believe you can be happier”

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