Externalities let you account for the true cost of products by including hidden costs like environmental damage.

• Pricing externalities properly is more effective than feel-good measures 0:32

• Properly pricing externalities can save resources in a tremendous way 1:10

Transcript: http://nav.al/externalities

Calculate what future income is worth today by applying a discount to its future value.

• Figure out what future income is worth today by applying a discount rate 0:00

Transcript: http://nav.al/npv

A lot of people are willing to pay more than what companies charge.

• Consumer surplus is the extra value you get when you pay less than you were willing 0:00

Transcript: http://nav.al/surplus

You can charge people for extras based on their propensity to pay.

• Price discrimination is a technique for charging certain people more 0:00

• Rich people and large enterprises are willing to pay more 0:51

Transcript: http://nav.al/price-discrimination

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

• Compounding relationships make life easier 0:00

• It’s better to have a few compounding relationships than many shallow ones 1:11

• It takes just as much effort to create a small business as a large one 1:40

Transcript: http://nav.al/relationships

Improve your leverage in negotiations by turning short-term relationships into long-term ones.

• Pareto optimal solutions require a trade-off to improve any criterion 0:00

• Negotiations are won by whoever cares less 0:44

• Convert single-move games to multi-move games 1:54

Transcript: http://nav.al/pareto-optimal

People who can’t communicate can cooperate by anticipating the other person’s actions.

• Use social norms to cooperate when you can’t communicate 0:00

• You can find Schelling points in business, art and politics 1:14

Transcript: http://nav.al/schelling-point

Don't ruin your reputation or get wiped to zero.

• Don't bet everything on one big gamble 0:00

• Ruining your reputation is the same as getting wiped to zero 0:54

Transcript: http://nav.al/kelly-criterion

If you think and act like an owner, it’s only a matter of time until you become an owner.

• A principal is an owner; an agent is an employee 0:00

• A principal’s incentives are different than an agent’s incentives 1:08

• If you can work on incentives, don't work on anything else 2:15

• When you do deals, it’s better to have the same incentives 3:15

• If you’re an employee, your most important job is to think like a principal 4:05

• Deal with small firms to avoid the principal-agent problem 5:29

Transcript: http://nav.al/principal-agent

Envy can give you a powerful boost, or it can eat you alive if you let it follow you.

• Suffering through the wrong thing can motivate you to find the right thing 0:00

• Being a lawyer was not what I was meant to do 1:14

• Envy can be useful or it can eat you alive 2:28

Transcript: http://nav.al/envy

If you cut fair deals, you will get paid in the long run.

• Ethics isn’t something you study; it’s something you do 0:00

• Trust leads to compounding relationships 0:51

• Being ethical attracts other long-term players 1:19

• Being ethical is long-term greedy 1:58

• If you cut fair deals, you will get paid in the long run 2:40

Transcript: http://nav.al/ethics

The goal is that we are eventually wealthy and working for ourselves.

• This advice is for anybody who wants to be entrepreneurial 0:00

• Middle age can be the most fruitful time to apply this advice 0:48

• Look up the value chain to find leverage 1:58

• You will do better in a small organization 2:43

• The goal is that we are all working for ourselves 3:25

Transcript: http://nav.al/target-audience

Misunderstanding accountability, and other mistakes on the path to creating wealth.

• Accountability means letting people criticize you 0:00

• The most interesting parts should be the ones you disagree with 1:06

• Get the free leverage that's available in tech 1:53

• Not doing things because other people can't do them is living in denial 2:21

• Realize your philanthropic vision by running a business 2:54

Transcript: http://nav.al/common-mistakes

This giant episode collects every interview we've done on “How to Get Rich.”

Transcript: http://nav.al/how-to-get-rich

• Seek Wealth, Not Money or Status 1:30

• Make Abundance for the World 6:40

• Free Markets Are Intrinsic to Humans 10:21

• Making Money Isn’t About Luck 14:19

• Make Luck Your Destiny 19:25

• You Won’t Get Rich Renting Out Your Time 24:00

• Live Below Your Means for Freedom 28:40

• Give Society What It Doesn’t Know How to Get 31:01

• The Internet Has Massively Broadened Career Possibilities 33:44

• Play Long-term Games With Long-term People 38:23

• Pick Partners With Intelligence, Energy and Integrity 44:24

• Partner With Rational Optimists 49:09

• Arm Yourself With Specific Knowledge 54:34

• Specific Knowledge Is Highly Creative or Technical 1:00:53

• Learn to Sell, Learn to Build 1:06:24

• Read What You Love Until You Love to Read 1:10:59

• The Foundations Are Math and Logic 1:12:00

• There’s No Actual Skill Called “Business” 1:16:48

• Embrace Accountability to Get Leverage 1:20:06

• Take Accountability to Earn Equity 1:25:37

• Labor and Capital Are Old Leverage 1:30:06

• Product and Media are New Leverage 1:35:01

• Product Leverage is Egalitarian 1:39:42

• Pick a Business Model With Leverage 1:44:56

• Example: From Laborer to Entrepreneur 1:50:51

• Judgment Is the Decisive Skill 2:01:15

• Set an Aspirational Hourly Rate 2:07:41

• Work As Hard As You Can 2:11:26

• Be Too Busy to “Do Coffee” 2:16:34

• Keep Redefining What You Do 2:20:38

• Escape Competition Through Authenticity 2:22:41

• Play Stupid Games, Win Stupid Prizes 2:28:17

• Eventually You Will Get What You Deserve 2:30:53

• Reject Most Advice 2:35:00

• A Calm Mind, a Fit Body, a House Full of Love 2:37:55

• There Are No Get Rich Quick Schemes 2:42:02

• Productize Yourself 2:46:42

Figure out what you're uniquely good at and apply as much leverage as possible.

• Figure out what you're uniquely good at and apply as much leverage as possible 0:00

• Find hobbies that make you rich, fit and creative 1:07

Transcript: http://nav.al/productize-yourself

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

• There are no get rich quick schemes 0:00

• We don't have ads because it would ruin our credibility 0:56

• Every founder has to lie to every employee 2:02

• Anyone giving advice on how to get rich should have made their money elsewhere 3:02

Transcript: http://nav.al/rich-quick

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

• When you're wealthy, you'll realize it wasn't what you were seeking 0:00

• A calm mind, a fit body and a house full of love must be earned 1:00

• Practical advice for a calmer internal state 1:52

• A lot of divorces happen over money, a lot of battles happen over internal anger 3:14

Transcript: http://nav.al/finally-wealthy

Most advice is people giving you their winning lottery ticket numbers.

• The best founders listen to everyone but make up their own mind 0:00

• Advice is maxims you can recall later, when you get your own experience 1:29

Transcript: http://nav.al/reject-advice

Apply specific knowledge with leverage and eventually you will get what you deserve.

• On a long enough time scale you will get paid 0:00

• What are you really good at that the market values? 1:59

Transcript: http://nav.al/deserve

Competition will blind you to greater games. You're one step away from a better market.

• Businesses that seem like they're in direct competition really aren't 0:00

• My first company got caught up in the wrong game 1:23

Transcript: http://nav.al/stupid-games

Competition can make you play the wrong game. No one can compete with you on being you.

• Competition will trap you in a lesser game 0:00

• No one can compete with you on being you 1:27

• In entrepreneurship, the masses are never right 2:40

• Combine your vocation and avocation 3:45

Transcript: http://nav.al/competition-authenticity

Become the best in the world at what you do. Keep redefining what you do until this is true.

• Keep redefining what you do until you're the best at what you do 0:00

• Find founder-product-market fit 1:35

Transcript: http://nav.al/redefining

You should be too busy to “do coffee”, while still keeping an uncluttered calendar.

• Be too busy to “do coffee” while keeping an uncluttered calendar 0:00

• People will meet with you when you have proof of work 2:00

• Networking is overrated even early in your career 2:09

Transcript: http://nav.al/meetings

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 0:00

• But what you work on and who you work with are more important 1:00

• Nobody really works 80 hours a week 2:22

• Inspiration is perishable 3:05

• Impatience with actions, patience with results 3:36

Transcript: http://nav.al/work-hard

If outsourcing a task will cost less than your hourly rate, outsource it.

• Set and enforce an aspirational hourly rate 0:00

• You can't penny pinch your way to wealth 1:27

• My aspirational rate was $5,000/hr 1:56

• If you can outsource something for less than your hourly rate, outsource it 2:57

• Your hourly rate should seem absurdly high 3:39

Transcript: http://nav.al/hourly-rate

Everything we've discussed so far has been setting you up to apply judgment.

• In an age of infinite leverage, judgment becomes the most important skill 0:00

• Everything else you do is setting you up to apply judgment 1:21

• Judgment is knowing the long-term consequences of your actions 2:40

• Without experience, judgment is often less than useless 3:15

• The people with the best judgment are among the least emotional 4:05

• A lot of the top investors often sound like philosophers 5:18

• The more outraged someone is, the worse their judgment 6:00

Transcript: http://nav.al/judgment

The continuum from laborer to real estate tech company goes from low accountability to high specific knowledge, accountability and leverage.

• Laborers get paid hourly and have low accountability 0:19

• General contractors get equity, but they're also taking risk 1:20

• Property developers pocket the profit by applying capital leverage 2:14

• Architects, large developers and REITs are even higher in the stack 3:16

• Real estate tech companies apply the maximum leverage 4:05

Transcript: http://nav.al/laborer-tech

Ideally, you should pick a business model with network effects, low marginal costs and scale economies.

• Scale economies: the more you produce, the cheaper it gets 0:00

• Zero marginal cost of reproduction: producing more is free 0:51

• Network effects: value grows as the square of the customers 1:34

• Network effect businesses are natural monopolies 2:26

• In a network effect, each new user adds value to the existing users 3:06

• Zero marginal cost businesses can pivot into network effect businesses 5:01

Transcript: http://nav.al/business-models

Labor and capital are limited to the people who control those resources. But products reach global markets.

• Product leverage is a positive-sum game 0:00

• Status goods are limited to a few people 0:57

• The best products tend to be targeted at the middle class 1:25

• Creating wealth with product leads to more ethical wealth 2:06

• You want to use the product that is used by the most people 3:06

• Capital and labor are becoming permissionless 4:24

Transcript: http://nav.al/egalitarian-leverage

Product and media are the leverage of new wealth. Create software and media that work for you while you sleep.

• Product and media are the new leverage 0:00

• Product leverage is where the new fortunes are made 0:55

• Combining all three forms of leverage is a magic combination 1:28

• Product and media leverage are permissionless 2:03

• The robots army is already here—code lets you tell them what to do 2:59

Transcript: http://nav.al/product-media

Wealth requires leverage. Labor and capital are older forms of leverage that everyone is fighting over.

• Our brains aren't evolved to comprehend new forms of leverage 0:00

• Society overvalues labor leverage 1:08

• You want the minimum amount of labor that allows you to use the other forms of leverage 1:56

• Capital has been the dominant form of leverage in the last century 2:40

• You need specific knowledge and accountability to obtain capital 4:52

Transcript: http://nav.al/labor-capital

If you have high accountability, you're less replaceable and you can get a piece of the business.

• Accountability is how you're going to get equity 0:00

• Taking accountability is like taking equity in all your work 0:29

• The downside of accountability is not that large 2:11

• Accountability is reputational skin in the game 4:30

Transcript: http://nav.al/accountability-equity

Embrace accountability. Society will reward you with leverage.

• You have to have accountability to get leverage 0:00

• Take business risks under your own name 0:54

• A well-functioning team has clear accountability for each position 2:09

• People who can fail in public have a lot of power 3:47

Transcript: http://nav.al/accountability-leverage

There's no actual skill called business. Avoid business schools and magazines.

• There's no actual skill called business 0:00

• Doing is faster than watching 0:55

• The number of “doing” iterations drives the learning curve 2:49

• If you're willing to bleed a little every day, you may win big later 3:53

Transcript: http://nav.al/skill-business

If you understand mathematics and logic, you have the basis for understanding everything else.

• The ultimate foundations are math and logic: 0:00

• It’s better to read a great book slowly than to fly through a hundred books quickly: 1:22

• Learn persuasion and programming: 2:08

Transcript: http://nav.al/math-logic

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

• Read what you love until you love to read: 0:00

• Read the original scientific books in a field: 1:44

• Don't fear any book: 2:43

• The means of learning are abundant, the desire to learn is scarce: 3:54

Transcript: http://nav.al/love-read

Learn to sell. Learn to build. If you can do both, you will be unstoppable.

• Learn to sell, learn to build 0:00

• The Silicon Valley model is a builder and seller 1:07

• If you can do both you will be unstoppable 1:52

• I'd rather teach an engineer marketing than a marketer engineering 2:48

• Building is better when you're starting out, sales scales better over time 4:33

Transcript: http://nav.al/build-sell

Specific knowledge tends to be creative or technical. It's on the bleeding edge of technology, art and communication.

• Specific knowledge can be taught through apprenticeships 0:00

• Specific knowledge is often highly creative or technical 0:45

• Specific knowledge is specific to the individual and situation 2:02

• You can't be too deliberate about assembling specific knowledge 3:01

• Build specific knowledge where you are a natural 4:44

Transcript: http://nav.al/creative-technical

Arm yourself with specific knowledge. It can't be trained but it can be found by pursuing your genuine curiosity.

• Arm yourself with specific knowledge 0:00

• Specific knowledge can't be trained 1:47

• Specific knowledge is found by pursuing your curiosity 2:34

• Building specific knowledge will feel like play to you 3:53

Transcript: http://nav.al/specific-knowledge

Don't partner with cynics and pessimists. Their beliefs are self-fulfilling.

• Don't partner with pessimists 0:00

• Partner with rational optimists 1:20

• We're descended from pessimists 2:28

• BOCTAOE 4:13

Transcript: http://nav.al/rational-optimists

Picking partners with high intelligence, energy and integrity is the three-part checklist that you can't compromise on.

• Pick business partners with high intelligence, energy and integrity 0:00

• Motivation of the people you work with has to come intrinsically 1:18

• Integrity is what someone does, despite what they say they do 2:18

Transcript: http://nav.al/intelligence-energy-integrity

Pick an industry where you can play long-term games with long-term people. All returns in life come from compound interest over many turns of the game.

• Play long-term games with long-term people 0:00

• When you switch industries, you're starting over from scratch 2:21

• Long-term players make each other rich 4:02

• Returns come from compound interest in iterated games 4:49

Transcript: http://nav.al/long-term

The Internet has massively broadened the possible space of careers, by allowing you to scale any niche obsession.

• The Internet has massively broadened the possible space of careers 0:00

• The Internet allows you to scale any niche obsession 1:22

• Escape competition through authenticity 3:33

Transcript: http://nav.al/possible-careers

Society will pay you for creating what it wants, but doesn’t know how to get, and delivering it at scale.

• Give society what it wants, but doesn't know how to get—at scale 0:00

• Figure out what product you can provide and then figure out how to scale it 0:57

Transcript: http://nav.al/product-scale

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

• People living below their means have freedom 0:00

• The most dangerous things are heroin and a monthly salary 0:38

• Ideally, you'll make your money in discrete lumps 1:17

Transcript: http://nav.al/salary-freedom

You won't get rich renting out your time, because you can't earn non-linearly.

• You won't get rich renting out your time 0:00

• Renting out your time means you're essentially replaceable 1:23

• You must own equity to gain your financial freedom 2:17

• You want a career where your inputs don't match your outputs 2:41

Transcript: http://nav.al/renting-time

Build your character in a way so luck becomes deterministic.

• Build your character so luck becomes your destiny 0:00

• Build your character so opportunity finds you 1:12

• You have to be a little eccentric to be out on the frontier by yourself 2:39

Transcript: http://nav.al/luck-destiny

Making money isn't about luck. It's about becoming the kind of person who makes money.

• Making money isn't about luck 0:00

• Blind luck 0:46

• Luck from hustling 0:55

• Luck from preparation 1:35

• Luck from your unique character 1:51

• In 1,000 parallel universes, you want to be wealthy in 999 of them 2:54

• Wealth stacks up one chip at a time, not all at once 4:11

Transcript: http://nav.al/money-luck

We're the only animals who cooperate across genetic boundaries, because we can track credits and debits in voluntary exchanges.

• Free markets are intrinsic to the human species 0:00

• Too many takers and not enough makers will plunge a society into ruin 1:48

Transcript: http://nav.al/capitalism-intrinsic

Wealth isn't about taking something from somebody else—it's about creating abundance for the world.

• Ethical wealth creation makes abundance for the world 0:00

• Everyone can be wealthy 1:28

Transcript: http://nav.al/ethical-wealth

The difference between wealth, money and status.

• Wealth is assets that earn while you sleep 0:56

• Money is how we transfer wealth 2:28

• Status is your rank in the social hierarchy 3:08

Transcript: https://nav.al/seek-wealth

This is the first interview between Naval and Nivi on How to Get Rich. These interviews are based on Naval's tweetstorm at https://twitter.com/naval/status/1002103360646823936.