Transcription
Getting rich is not about hard work or having a lot of money to invest. It's about knowing what to do, when to do it, and who to do it with.
In this video, I'm going to talk about eight things that rich people do differently than the rest, and how you can apply them to your own life. The information you will hear in this video comes from a book called "The Almanac of Naval Ravikant: A Guide to Wealth and Happiness." In case you don't know, Naval is an Indian entrepreneur, investor, and a millionaire. So, let's get started.
Rich people are unique. Deciding what to work on is one of the biggest decisions we have to make in life, and what we usually decide that we're too young and immature. That's why many people get stuck for decades with a career that doesn't fulfill all their needs. And even if you have the opportunity to change careers later, you need to know how to do it, otherwise you might end up making the wrong choice once again and wasting more time. That's why you need to figure out what to work on before anything else.
So, how to choose the best career for you? Is it the one you like the most? The one that makes you the most money? The one you've always been good at? According to the author, none of them. What you need is a combination of all three factors. This combination is what makes you unique. It's a tricky process, but here are three tips to find your uniqueness:
Number one: Pursue your genuine curiosity and passion rather than whatever career is hot right now. This is essential because you can't go too far at something that you hate or that makes you bored.
Number two: If it entertains you now, but will bore you someday, it's a distraction. Keep looking.
Number three: Figure out what you were doing as a kid or teenager almost effortlessly, something you didn't even consider a skill, but people around you noticed. Your mother or your best friend growing up would know.
Here are some examples of what your specific knowledge could be: sales, cooking, pick up any musical instrument, learning new languages, attention to detail, gossiping. Maybe you're thinking gossiping isn't a specific knowledge, it's a flaw. Some of your specific skills might look like flaws, but don't ignore them. They're still part of your uniqueness. The ability to find out the latest gossip and pass it on in an interesting way, for example, might make you into a very successful journalist.
So, the first lesson is this: If you want to be rich, you need to find your uniqueness.
Number two: Rich people find work that feels like play. One of the biggest reasons people dream of retirement is they want to stop working. Why? Maybe because they're tired? Maybe they don't like their jobs? Maybe it's taken a toll on them? But we don't want to retire from fun. If you're doing something that feels like play to you, retirement won't be a goal anymore.
Ask yourself, what is your definition of retirement? Is it about stopping working, or is it about having free time to do only the things you love? Let's say you want to retire so you're able to travel more because that's what you love. If you can earn money by traveling and that becomes your job, then you'll never need to retire.
One way to retire is to have so much money saved that your passive income covers all your expenses. A second way is you just have zero or close to zero expenses, like a monk. And the third way is you're doing something you love. You enjoy it so much that it's not about the money anymore. This way, you could work forever and never get tired. This is early retirement. People think you're working, but you're actually having fun and enjoyment. It's just like vacation time.
The author says his definition of retirement is when you stop sacrificing today for an imaginary tomorrow. It doesn't matter if you're working or not, if you're earning or not. What matters is that you're living today as you wish, instead of putting off your desires for when it's financially possible. That means you work not because you have to pay the bills that will come soon, but because you love your work and you want to do it all the time. It's not about making money for the future anymore, it's about enjoying life today.
Number three: Rich people say no. Let's suppose you've been in a relationship for five years and it's finally getting serious, and you are preparing to get married. But your reaction surprises even yourself. Instead of feeling amazingly happy, you catch yourself feeling doubt and fear. What do you do? The author says the answer is very clear: you shouldn't do it. If you can't decide, the answer is no.
This is true for other areas of your life too. Consider these situations: Should I take this job? Should I buy this house? Should I move to this city? Should I go into business with this person? If you cannot make a clear decision, the answer is no. And the reason for that is that life is so full of options. The author says there are hundreds of thousands of careers available to you, millions of cities you can move to, thousands and thousands of people you'll meet throughout your life, houses you can buy, hobbies you can take on. There are so many choices.
Those choices need to be well thought out. Think of stock market investments, for example. You spend a year researching and deciding, and only a few minutes acting. But if you decide well, those few minutes are going to bring you profit for years. The research and deciding phase are the most important ones. When we're young, many people rush through that phase, though. Marry their first girlfriend, choose the first career they find interesting, buy a house in the city they've always lived in. Where to live, who to marry, what career to choose. These are the three most important decisions you'll make in your life. They will influence, if not outright determine, many aspects of your future: your quality of life, if you get rich or not, if you are happy or not. Spend as much time deciding as you need to.
During decision making, the brain is a memory prediction machine. It thinks "X happened in the past, therefore X will happen in the future." For example, "Last time I went to New York, I was robbed and had a bad experience, so I don't want to go to New York anymore." This is a terrible way to make decisions based on two specific circumstances that misguide you. What you really want instead is to create good mental models. Think of them as pointers or guiding sentences, things that you need to remember when your decision-making process gets clouded. For example, one of your mental models could be: "My goals are more important than what other people think of me." Now, when you see yourself trying to decide if you should buy a new suit to go to your brother's wedding or if you should save money to travel, you'll know exactly what the right choice is, even if you feel tempted to dress up.
This is a super simple example, but you can use mental models with more complex decisions too. Imagine a woman who has the mental model: "Enjoying my alone time is more important than being with my family." Would that woman be happy if she got married to a man who wants to be a father? Probably not. People who value alone time more than family shouldn't be parents, since you have very little alone time for years once you have a child. She wouldn't be happy, and he wouldn't either. If they're in love, it might be a very difficult situation to break up their relationship, but maybe it'll also avoid huge disappointments and arguments in the future. Make hard decisions now so that your future is smooth.
The same goes for your career decisions. Maybe deciding not to be a lawyer, as your father always hoped you would be, is a tough decision that will bring pain. Maybe giving up college to open your own business is what feels right, but it's hard to take that step. But if a decision feels right and matches your long-term career plans, do it. Instead of avoiding pain now and putting off your suffering, say no to everything that is not what you want in all areas of your life, such as your career or diet. You should always take the path that is more painful in the short term so that you can enjoy the long-term benefits.
Number four: Rich people know their value. Rich people don't usually cook. Cooking takes a lot of time, not only to acquire the expertise and practice, but also to decide what to cook, buy the ingredients at the lowest price, store goods, wash vegetables and fruits, and then the process of cooking itself. So, what do rich people do instead? They eat out, or they hire someone to do the cooking for them and cook only when they want to, or if they like to.
No one is going to value you more than you value yourself. This is true for life in general, and it's true when it comes to money. Rich people don't spend a lot of time doing things they don't like to do or they don't think will bring them good results, because they know their time is valuable. They don't do that after they become rich, they've always valued themselves and their time.
Now, you might say, "It's too expensive to hire someone to cook for you." Well, it depends on how much you earn per hour. If your hourly rate is $100 and the person who will cook for you costs more than that per hour, then yes, it's expensive. But if your hourly rate is higher than that, then you'll be wasting time and money when cooking. If your hourly rate is $400 and the person you hired costs $100, then you'll be losing $300 per hour if you cook your food yourself. If it takes you two hours to cook lunch, that's the same as throwing $600 away. Are you going to do that? Always factor in your hourly rate and your time in every decision you make. How much time does it take? How much would I earn if I were making money instead of doing this?
Another thing you should take into consideration when valuing yourself is status. People do crazy things for status. Do you know what status is? It's the opinion other people have about you. When your neighbor buys an expensive car and you want to buy an expensive car too because you don't want to rank lower, you're paying for status. You're literally buying other people's opinion about you. You want them to think you're worth it. You want them to think that you too can have a car like that. Some people prefer to look rich and stay poor than give up status. Status is purely about your ego. As long as you allow your ego to command your actions, you won't be truly free. You should work on building wealth, not status.
Number five: Rich people aren't lucky. I'm sure you've already heard someone comment about a rich person that "he's only rich because he got lucky." Sometimes it's understandable. For example, there's blind luck where you just get lucky because something completely out of your control happened, like winning the lottery. Another way to get lucky is when you become skilled enough to find luck on your path. Suppose you're faced with a huge investment opportunity in real estate, but you know nothing about real estate investment, so you won't even notice you have a great opportunity in front of you. Now, if you are skilled in that field, you'll notice the opportunity when it happens. You can also be lucky when you become the best at what you do. This way, you don't have to watch out for opportunists, they will find you. It's like you attract luck. This is the best kind of luck because if you're the best at what you do, there's no way you won't have it.
For example, let's say you're the best person in the world at deep sea diving. You are brave enough to dive deeper than anyone else. Now, suppose somebody finds a sunken treasure ship off the coast, they can't get to. Well, their luck just became your luck, because they're going to come to you to get the treasure, and you're going to get paid for it. This is an extreme example, of course, but it shows well the difference between blind luck and the kind of luck you should count on. The first person had blind luck finding the treasure, but that doesn't happen to most people. You, on the other hand, created your own luck by becoming the best deep diver. This is the only kind of luck the author believes we should count on, and some people would say it isn't even luck at all. When people say rich people got lucky, 99% of the time, what they really should be saying is that those rich people were well prepared to take good opportunities when they appeared. Luck or not, this is how you get wealthy.
Number six: Rich people build leverage. Even if you have great specific knowledge, such as public speaking or teaching, the author doesn't recommend you to get a common job that uses your specific knowledge. Now, why not? Let's say you're a doctor who works only 9 to 5, Monday to Friday, and earns a good $400 an hour. Now, let's say you want to become wealthy faster, so you become particularly hard-working and prefer to work 10 hours a day, 6 days a week, and have no vacation ever. So, your yearly wages will be $6,912,000. If you can keep half of that, it's $3,456,000. At this pace, it'll take you 29 years to reach $100 million. But the thing is, you can't scale much more than that, because first, if you increase your workload, then you'll have no time ever for anything besides working. Second, that's a rare situation, even for a doctor or a lawyer. Most people, even if well-paid, get less than $400 an hour.
If I make the same calculation with, let's say, $100 an hour, which is a more realistic salary for most of us, and still high for many, it'd take you 227 years to amount to $100 million. So, even if you have a very well-paid job, there's still a limit to how much you can earn, and how you'll still need to work hard. If medicine is your dream job, go for it. But if you're trying to build wealth, there's a much easier and more effective way. You're not going to get rich renting out your time. That is not financial freedom. The problem with being a teacher, a lecturer, a doctor, or a lawyer is that what you're doing is trading some of your time and effort for money. Only poor people exchange time for money. It's not a wise way to use your time because you have limited hours in a day.
Let's suppose you now found a way to keep a robot working for you 24/7. That robot is a nice, restless guy, but he can't make as much as you do because people are willing to pay robots less than they pay people. So, if your robot makes $150 an hour, it'll take him 22 years to reach $100 million, less time than it would take you if you were working restlessly for 10 hours a day, six days a week, with no holidays ever. Now, can you imagine what would happen if you bought a second robot? $100 million in 11 years. Four robots will give you $100 million in only five years.
Maybe you're thinking, "But I can't buy a robot to work for me. It's not realistic." Well, you can. The robot is right here in front of you. It's called the internet. The internet is your leverage. Let's understand what leverage means. Business leverage comes from capital, labor, and products with no marginal cost of replication. Labor means people working for you. It's the oldest form of leverage. It might impress some people, but it's messy and unstable. Capital means you already have some money because someone gave it to you, so you can use it to make more money. Now, using the internet for things such as code and media is permissionless leverage. It means you don't need other people to work for you or to give you money. You don't need anyone's permission. You can use the power of the internet and create software and media tools that work for you while you sleep. That's the real definition of wealth: business and assets that can earn while you sleep. For example, if you're trying to sell an ebook, you'll have some cost to produce it, but once it's done, you can sell as much as you want with almost zero cost.
Number seven: Rich people have good habits. Have you ever had a day with no planning at all? It usually happens on vacations or weekends. You just wake up and you don't know where to go or what to do. When I have them, they're usually my least favorite days because I end up doing nothing all day long. The funny thing is, even if I scrolled through social media all day, I still feel tired when the day is over. You need habits and a certain amount of routine to function. You need prefixed times to eat, sleep, exercise, work, and even have fun. This makes life easier, saves you time, and guarantees you'll keep up with all the necessary stuff in life.
Just like you can't live without habits, you cannot allow habits to control your life. There are many habits you take on during life that can be affecting your wealth more than you think. The things you buy and where you buy them, if you prefer to drive or take the bus, the kind of house you are willing to live in, if you value status over quality of life, the food you eat, etc. Instead of conforming to "this is who I am," it's really important to be able to stop doing what doesn't serve you anymore. Examine your life, take your habits apart, and say, "I took this habit when I was X years old because of Y. Does it still serve me?" Here's an example of something you could say: "Pretending I'm never okay is a habit I probably picked up when I was still a toddler trying to get my parents' attention. Does it make me happier now? Does it make me healthier? Does it make me accomplish whatever I set out to accomplish?" Leave behind habits that don't match your goals anymore.
There's a great chance that the habits you have with money fall in the automatic category. You spend on certain things, but you never wonder if you really should. You shop for groceries every week at the same supermarket, but you aren't sure if it's still the best place to buy at. You keep your money in a savings account because that's what you've always done, instead of researching investments. You associate hard work and money because that's how things were when you were a child, and so on.
Number eight: Rich people read books. While you have some skills that have always been with you, you'll need to combine them with other skills as you go along so you can make your business work. Those skills will vary depending on the type of business you have in mind, but there are some that everyone needs: the foundations. When the author talks about foundations, he's talking about basic knowledge that you can use in any field. You will always need basic math, it doesn't matter what kind of business you have. You'll always need basic economics knowledge, basic knowledge about human behavior, basic principles of sales, training, up-to-date basic knowledge about technology, and so on. This basic knowledge means so much more than being an expert at something. Being able to communicate with basic English speaking skills is far more important than being able to write poetry. Knowing how to do basic math matters more than knowing calculus.
Here's the thing: most of this basic knowledge can be found in books. That's why one of the author's main tips is: learn to love to read. But it's not bestsellers he's talking about. Although you can do that for fun, you need to read books that solve your problems. Are you struggling to sell? Then pick up a book on sales. Are you struggling with self-confidence? Then pick up a book on building self-confidence. Another reason you need to love to read is that the most important skill for getting rich is knowing how to learn anything you want to learn. It's not only an interesting skill today, it's a requirement. Think about your grandparents' or maybe even your parents' career model. They went to college for four years, got a degree, and worked as a professional in that same area for 30 years. But things change fast. Now, many professions become obsolete in a matter of five years or even less. We can only guess which professions will still be around 30 years from now. That's why learning how to learn and becoming good at something is an essential skill.
Number nine: Bonus takeaway. Rich people value peace. Now, this is what's the most interesting thing. The author says that when you're finally wealthy, you'll realize it wasn't what you were seeking in the first place. What you really wanted was freedom and peace. Peace is the final goal in life. When you finally reach your goal and become wealthy, don't let yourself forget why you were working so hard.
If you enjoyed this video, then I think you'll also like the video that you see on your screen called "17 Things Rich People Do That the Poor Don't." It's based on a book called "Secrets of The Millionaire Mind" by Harv Eker. Thanks for watching.