The Almanack of Naval Ravikant

The Almanack of Naval Ravikant compiles the valuable lessons of Naval Ravikant, who teaches people how to build wealth and achieve long-term happiness by working on a few essential skills, all while discovering the secrets of living a good life.

What is compound interest? Essentially, it’s when your money makes more money, and then that money makes even more money. Take the following example: you invest 10,000 dollars into the stock market for an interest of 10% annually. Then, you cash them out and reinvest 11,000 dollars back. Naturally, those 11,000 will be worth 12,100 dollars next year.

Albert Einstein once said that compound interest is the eighth world wonder. As such, this concept is definitely worth implementing in your life, and not just from a financial point of view. Sure, investing in the stock and bond market is a one way ticket to success, as long as you manage the risk with extreme care and reinvest the gains to grow exponentially. However, compounding can be used in your relationships as well.

Successful people worldwide are viewed as reliable and trustworthy. When they are recommended by their peers, their network grows. Once they prove what they’re worth, their value grows in the network. In other words, they use the compound rule to build their reputation and integrity.

Don’t be the person who says that money is the root of all evil, that you don’t need them to be happy, or that you’re not interested in building wealth. Sure, these affirmations are true, up to a certain point. However, many use them to justify not growing their mindset and accepting the status-quo in their life. Truth be told, money is a great thing to have, especially if you know how to use it. To change this mentality, you must first accept that money is something you can have and that they can give you freedom. Essentially, this is what you’ll use them for, to buy time. It is the tool you need to experience the real values of life. As such, the meaning you give to it can alter the course of your life. If your end goal is to simply build more and more wealth, money will get you nowhere. However, if you want to acquire freedom, the chance to spend more time with your family, help those in need, dance more, or whatever it is that your spiritual self craves, you’re on the right path. For that, you’ll need to learn how to play the money game right. Fearing that you’ll lose what you’ve earned and being unhappy with what you have is an unhealthy approach. Moreover, the end goal isn’t more money, so keep that in mind. Instead,…