Chapter Content
Okay, so, let's talk about building wealth, right? It's something I've been thinking about for a long time. I truly believe, and this is kind of a bold statement, but I believe if I lost everything, like, completely started over in any English-speaking country, I could become wealthy again within like, five to ten years. And that's because I think I've learned the "skill" of making money. It's not really about how hard you work, you know? I mean, you could be working, like, eighty hours a week at a restaurant and you're probably not going to get rich doing that.
Real wealth creation is about knowing *what* to do, *who* to do it with, and *when* to do it. It's way more about understanding and thinking strategically than just pure, blind effort. Effort is definitely important, you can't be lazy, but it has to be the *right* kind of effort, directed in the *right* way. If you don't know what you should be doing yet, figuring that out is the first step. Don’t just go blindly, you know, expending all your energy without a plan.
So, like, when I was a teenager, I came up with a set of principles for myself. And for the last, like, thirty years, I've really tried to live by them, to put them into practice in my life and in my work. Over time, I've noticed I've gotten better and better at looking at businesses and kind of pinpointing the leverage points, you know, the places where you can really create a lot of wealth. And, uh, capturing some of that wealth for myself. I don't know if that's a good thing or a bad thing, but it's just something I've gotten good at.
Basically, wealth isn't just money or status. Wealth is, like, assets that earn you money even when you're sleeping. Money is how we transfer time and wealth, and status is just, you know, your position in the social hierarchy.
And it’s totally possible to create wealth and still be ethical, okay? If you secretly look down on wealth, it's going to avoid you. And honestly, just ignore people who are obsessed with social status. Often the way they gain status is by tearing down people who are actually creating wealth.
You’re not going to get rich by renting out your time. You need to have equity, like ownership, in a business to be financially free. One way to build wealth is to give society something it wants but doesn't yet know how to get at scale. You gotta pick an industry with long-term potential and find people you can see yourself working with for a long time. The internet has opened up so many new opportunities, but I think most people haven't really realized it yet.
And it’s all about compounding, you know? Everything in life, wealth, relationships, knowledge, it all comes from compound interest. Choose business partners who are super smart, have a ton of energy, but most importantly, they have to be honest and have integrity. Avoid cynical, pessimistic people. Their negativity will become a self-fulfilling prophecy.
Learn to sell, learn to build. If you can do both of those things, you're unstoppable. And then, arm yourself with specific knowledge, accountability, and leverage. Specific knowledge is, like, the kind of stuff you can't really be trained for. If society can train you to do it, it can train someone else to replace you. You develop specific knowledge by pursuing your genuine interests and passions, not just chasing trends. Accumulating specific knowledge feels like play to you, but it feels like hard work to other people. It's often taught through apprenticeship, not formal schooling, and it's often really technical or creative. It can't be outsourced or automated.
Develop a sense of accountability. Take business risks in your own name. Society will reward you based on the amount of responsibility you take, the equity you have, and the leverage you apply.
Leverage is super important. To create wealth, you have to use leverage. In business, leverage comes from capital, labor, and products that have zero marginal cost of replication – think code and media. Capital is, well, money. To get capital, you need to show specific knowledge, accountability, and good judgment. Labor leverage is just having other people work for you. It's the oldest form of leverage, and the most fought over. It'll impress your parents, but, like, don't overdo it. Capital and labor require permission. Everyone's trying to raise capital, but someone has to want to give it to you. Everyone wants to lead, but someone has to want to follow.
Code and media don't require permission. These are the levers behind the new rich. You can create software and media that works for you while you sleep. There are tons of robots available for free. They're all sitting in data centers to make them heat efficient and space efficient. Go use them! If you can't code, write books, write blogs, make videos, record podcasts. Leverage is a force multiplier for judgment. Judgment comes from experience, but you can learn basic mental models really quickly.
And, honestly, there's no such thing as "business" skills. Don't waste time on business magazines or business classes. Study microeconomics, game theory, psychology, persuasion, ethics, math, and computer science. Reading is faster than listening, and doing is faster than watching.
You should be too busy to socialize, but you still need to keep your calendar organized. Set a really high personal hourly rate and stick to it. If solving a problem costs less than your hourly rate, ignore it. If outsourcing a task costs less than your hourly rate, outsource it.
When you're working, work as hard as you can. But, who you work with and what you're working on are way more important than how hard you work. Become the best in the world at what you do. Keep redefining what you do until this is true. There’s no such thing as a get-rich-quick scheme. If there was, the person selling it would be getting rich, not you. Apply specific knowledge, with leverage, and you'll eventually get what you deserve. And when you finally get wealthy, you'll realize that it wasn't really what you were after in the first place. But, that's a different story for another time.
So, basically, productize yourself.
What does that even mean, right? Well, there are two parts to it: "yourself" and "productize." "Yourself" means uniqueness. "Productize" means leverage. "Yourself" means accountability. "Productize" means specific knowledge. "Yourself" also implies specific knowledge. So those two concepts kind of encapsulate all these ideas.
If you want to get rich over the long term, you should be asking yourself, "Is this what I truly want? Are my goals actually aligned with what I want?" And if the answer is yes, then you ask, "Am I productizing? Am I scaling? And am I scaling with labor, capital, or code and media?" So, yeah, "productize yourself" is just a simple, easy-to-remember way to think about it.
And look, "productizing yourself" is *hard*. That's why I say it takes decades. Not decades of *doing*, necessarily, but decades of *thinking*. What unique value can I provide?
So, what’s the difference between wealth and money anyway?
Money is just how we transfer wealth. It's society's way of keeping track of who owes what to whom. It's a credit slip. If I do a good job and create value for society, society will say, "Thank you. Because of the work you did in the past, we owe you something in the future. Here's a piece of paper, we can call it money."
What you really want is wealth. Wealth is assets that earn you money while you sleep. It's the factories and robots that produce things. It's the computer programs that serve customers 24/7. It’s the money in the bank that's invested in other assets or businesses. Even a house can be wealth because it can be rented out and generate income. But, that’s a less productive use of land compared to, like, a commercial enterprise. So, wealth, to me, is businesses and assets that generate income while you sleep.
Technology makes consumption more globalized, but it also makes production more concentrated. The best person in the world at something can now serve everyone in the world. To earn money in society, you have to give society something it wants but doesn't yet know how to get. If society has already figured out how to create the products and services it needs, it doesn't need you. Pretty much everything in your house, your workplace, and on the street used to be technology. Oil was technology that made Rockefeller rich. Cars were technology that made Henry Ford wealthy.
So, technology is anything that doesn’t quite work yet. Once something’s widely adopted, it's no longer technology. Society always needs new things. If you want to get rich, figure out what you can provide to society that it wants but doesn't yet know how to get, and that feels easy and natural for you, within your skill set and your capabilities.
And the next step is thinking about how to scale it, because providing one product or service isn't enough. You have to provide thousands, or hundreds of thousands, or millions, or billions, ideally one for every person on Earth. Steve Jobs, and his team of course, realized that society needed smartphones. They envisioned a small computer that could fit in your pocket, with all the capabilities of a phone and, like, a hundred times more, and that was easy to use. And then they figured out how to build it and how to mass-produce it.