Naval's Life Formulas
Naval Ravikant · 2008
"Naval treats life outcomes as decomposable equations rather than vague aspirations — happiness, wealth, and income each break down into a small number of controllable inputs, making an otherwise abstract goal into something you can audit and act on directly."
"These are not definitions — these are algorithms for success." Naval reduces happiness itself to an equation: Health + Wealth + Good Relationships.
Each formula decomposes further: Health = Exercise + Diet + Sleep. Wealth = Income + Wealth × (Return on Investment) — a compounding formula, not a static one. Income = Accountability + Leverage + Specific Knowledge, where Specific Knowledge is defined precisely as 'knowing how to do something society cannot yet easily train other people to do' — the thing that can't be outsourced or automated because it hasn't been codified. Leverage = Capital + People + Intellectual Property, the three multipliers that let one person's judgment scale beyond their own hours.
How does Naval define 'Specific Knowledge' in his Income formula?
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The explanation above is written with AI assistance. These are the originals — go to them to check it.
- Life Formulas I (2008)The Almanack of Naval Ravikant
Seek Wealth, Not Money or Status
"Wealth (assets that earn while you sleep) is distinct from money (a transfer of time and wealth) and status (a zero-sum position in a social hierarchy) — and only wealth creation is a positive-sum game worth optimizing for."