Embarking on the journey to wealth is no small feat. It requires a blend of smart decisions, strategic investments, and a dash of luck. Let's delve into the world of financial prosperity and explore the pathways to achieving it.

Kelly Criterion: Avoid Ruin

Don’t bet everything on one big gamble

Example: From Laborer to Entrepreneur

Laborers get paid hourly and have low accountability

Bonus: Finding Time to Invest in Yourself

If you have to work a “normal job,” take on accountability to build your specific knowledge

Pick a Business Model with Leverage

An ideal business model has network effects, low marginal costs, scale economies, and zero marginal cost

Accountability Means Letting People Criticize You

You have to stick your neck out and be willing to fail publicly

Specific Knowledge Is Highly Creative or Technical

Specific knowledge is on the bleeding edge of technology, art, and communication

Give Society What It Doesn’t Know How to Get

Society will pay you for creating what it wants and delivering it at scale

Set an Aspirational Hourly Rate

Outsource tasks that cost less than your hourly rate

Envy Can Be Useful, or It Can Eat You Alive

Suffering through the wrong thing can motivate you to find the right thing.

The Internet Has Massively Broadened Career Possibilities

The internet allows you to scale any niche obsession

Ethics isn’t something you study; it’s something you do

Ethics is something you think about and do. Everyone has a personal moral code.

Labor and Capital Are Old Leverage

Everyone is fighting over labor and capital

Consumer Surplus: Getting More Than You Paid For

People are willing to pay more than what companies charge

Read What You Love Until You Love to Read

You should be able to pick up any book in the library and read it

Avoid business schools and magazines

There’s no actual skill called ‘business’

Free Markets Are Intrinsic to Humans

We use credits and debits to cooperate across genetic boundaries

Pick Partners With Intelligence, Energy and Integrity

Pick business partners with high intelligence, energy and integrity

Product and Media Are New Leverage

Create software and media that work for you while you sleep

Take Accountability to Earn Equity

When negotiating with other people, ultimately if someone else is making a decision about how to compensate you, that decision will be based on how replaceable you are. If you have high accountability, that makes you less replaceable.

Partner With Rational Optimists

Don’t partner with cynics and pessimists; their beliefs are self-fulfilling

The Foundations Are Math and Logic

Mathematics and logic are the basis for understanding everything else

Escape Competition Through Authenticity

Competition will trap you in a lesser game

Productize Yourself

Figure out what you’re uniquely good at, and apply as much leverage as possible

There Are No Get Rich Quick Schemes

Get rich quick schemes are just someone else getting rich off you

Judgment Is the Decisive Skill

In an age of infinite leverage, judgment is the most important skill

Embrace Accountability to Get Leverage

Take risks under your own name and society will reward you with leverage

Product Leverage is Egalitarian

The best products tend to be available to everyone

Learn to Sell, Learn to Build

If you can do both, you will be unstoppable

Eventually You Will Get What You Deserve

On a long enough timescale, you will get paid.

Play Stupid Games, Win Stupid Prizes

When you’re being authentic, you don’t mind competition as much because you’re oriented towards the goal and the mission

Live Below Your Means for Freedom

People who are living far below their means enjoy a freedom that people busy upgrading their lifestyles just can’t fathom.

A Calm Mind, a Fit Body, a House Full of Love

When you’re finally wealthy, you’ll realize it wasn’t what you were seeking in the first place.

We Should Eventually Be Working for Ourselves

But we will have to make sacrifices and take on more risk

Schelling Point: Cooperating Without Communicating

The Schelling point is a game theory concept made famous by Thomas Schelling in his book, “The Strategy of Conflict”

Keep Redefining What You Do

If you want to be successful in life, you have to get comfortable managing multi-variate problems and multiple-objective functions at once.

Making Money Isn’t About Luck

It’s about becoming the kind of person that makes money.

Make Abundance for the World

Wealth isn’t about taking something from somebody else

Price Discrimination: Charge Some People More

Price discrimination is a technique for charging certain people more

Make Luck Your Destiny

Build your character in a way that luck becomes deterministic

Seek Wealth, Not Money or Status

Wealth is assets that earn while you sleep

Net Present Value: What Future Income Is Worth Today

NPV is when you say, “That stream of payments I’m going to get in the future-what’s it worth today?”

Compound Interest in Long-Term Games

All the benefits in life come from compound interests.

Turn short-term relationships into long-term ones

Pareto optimal solutions require a trade-off to improve any criterion

Principal-agent problem: act like an owner

Principal is an owner; an agent is an employee

Be too busy to ‘do coffee’ while keeping an uncluttered calendar

Ruthlessly decline meetings

Externalities: Calculating the Hidden Costs of Products

Properly pricing externalities can save resources in a tremendous way

Specific Knowledge

Specific knowledge can be found by pursuing your genuine curiosity

You Won’t Get Rich Renting Out Your Time

You can’t earn non-linearly when you’re renting out your time.

Work As Hard As You Can

Even though what you work on and who you work with are more important, work as hard as you can

Compounding Relationships Make Life Easier

Life gets a lot easier when you know someone’s got your back

Reject Most Advice

Most advice is people giving you their winning lottery ticket numbers

Source

Get in