Naval Ravikant’s formula for

health, wealth and good life

Naval's life equation is gold mine for many curious minds who are
eager to learn health, wealth and happiness

JITENDRA KUMAR GUPTA

MAY 14, 2021 / 05:42 PM IST

One who is an ardent follower of Naval Ravikant’s works

and thoughts, will readily agree that his 2008 blog post -
- a formula for health, wealth and good life -- is one of the
finest pieces of wisdom shared by this India born
American entrepreneur.

Over the years, Ravikant, who has 1.2 million followers on

his Twitter account, has spoken on many ideas and
themes. But his post in a 2008 blog has become all the
more relevant at a time when the raging Covid pandemic
has put people under tremendous stress and heightened
their anxiety.

For the uninitiated, Naval a start-up investor, had earned

his fame early with his investments in some of the
present-day marquee companies such as Uber and
Twitter. He is known for his wit, wisdom and his clarity
of thoughts on many outstanding workable ideas.

In his 2008 blog, Ravikant had offered a framework

known as algorithms for success on health, wealth and
happiness, which we believe can come in very handy for
many in this time of crisis.

Let us now take a deep dive into his framework and key
ideas.

Naval Formula

While the equations (below) provide a clear picture of

what they mean and how they fit into the different aspects
of life, health and wealth, here are some notes and a few
detailed explanations gathered or borrowed from many of
his public appearances, interviews, books and, most
importantly, his Twitter account, which is a treasure trove
of thought-provoking ideas and wisdom:
Happiness = Health + Wealth + Good
Relationships

Happiness is at the centre or the core of well being and

success. The big ideas start from happiness and Naval
indicates that the three important drivers are Health +
Wealth + Good Relationship.

“The three big ones in life are wealth, health, and

happiness. We pursue them in that order, but their
importance is reverse.” – Naval
He had even gone ahead and said in one of his tweets
that…

“The ideal school would teach health, wealth, and

happiness”

Unlike the popular belief that external circumstances or

external things make us happy, Naval suggests that it all
starts from within. In an interview to Shane Parrish of
Farnam Street, Naval talked about how he was paranoid
about buying a new car as if that was the last thing to
make him happy forever.
He said...

“We bought a new car. Now I’m waiting for the new car
to arrive. Of course, every night, I’m on the forums
reading about the car. Why am I doing that? It’s a silly
object. It’s a silly car. It’s not going to change my life that
much or at all. I know that the instant the car arrives I
won’t care about it anymore. What it is, I’m addicted to
the desiring. I’m addicted to the idea that this external
thing is going to bring me some kind of happiness and
joy and this is completely delusional”

“The idea you’re going to change something in the

outside world, and that is going to bring you the peace,
everlasting joy, and happiness you deserve, is a
fundamental delusion we all suffer from, including me.

The mistake over and over and over is to say, “Oh, I’ll be
happy when I get that thing,” whatever it is. That is the
fundamental mistake we all make, 24/7, all day long.”
While that’s the mistake that most of us make, Naval
talked about the limitations that we, as humans, have.
People may not inherit happiness, but, he believes it is
still possible to be happy if we learn to be happy and train
our mind to be happy. Like any other skill, such as fitness
and nutrition, Naval suggests happiness is a highly
personal skill, which can be learned.

Health = Exercise + Diet + Sleep

In that order of importance, health and being healthy is

on the top of Naval’s list. And Naval puts health in three
important baskets — physical health, mental health and
spiritual health. All three of them are important to
achieve a good overall health for a happy life.

Naval says...

“To have peace of mind, you have to have peace of body

first”

“My number one priority in life, above my happiness,

above my family, above my work, is my own health. It
starts with my physical health. Second, it’s my mental
health. Third, it’s my spiritual health. Then, it’s my
family’s health. Then, it’s my family’s well being. After
that, I can go out and do whatever I need to do with the
rest of the world.”
Exercise = High Intensity Resistance Training +
Sports + Rest

Naval was once asked about the habit that most positively
impacted his life. He answered: I think it’s the daily
morning workout. That has been a complete game-
changer. It’s made me feel healthier, younger. Naval puts
a lot more focus on exercise and daily workouts. Every
single day without fail he would ensure to stick to his daily
workout routines except for days when he is travelling or
facing other unavoidable situations. Developing a good
daily workout or an exercise routine is thus important.

Many things such as reading books, morning workouts,

meditation and yoga are among other things that often
turn into mere new-year resolutions. To avoid this trap,
Naval puts far more importance on building habits.

And to build good habits he says, “When building habits,

choose consistency over content”

Wealth = Income + Wealth * (Return on

Investment)

The second interesting idea is about wealth, which he

often talked about and shared through his Twitter
account, mostly under the thread “How to Get Rich
Without Getting Lucky”

Do not go by the fancy headline, the content and thoughts

shared are real gems.
While everyone wants to be wealthy the real challenge is
how do you create wealth and make money?

In one of the books, “The Almanack of Naval

Ravikant” the author Eric Jorgenson quotes
Naval saying...

“I like to think that if I lost all my money and you

dropped me on a random street in any English-speaking
country, within five or ten years I’d be wealthy again
because it’s just a skill set I’ve developed that anyone can
develop.

It’s not really about hard work. You can work in a

restaurant eighty hours a week, and you’re not going to
get rich. Getting rich is about knowing what to do, who
to do it with, and when to do it. It is much more about
understanding than purely hard work. Yes, hard work
matters, and you can’t skimp on it. But it has to be
directed in the right way”

Income = Accountability + Leverage + Specific

Knowledge

To become wealthy we need to have the right ingredient

and the right approach that Naval talked about. And the
single important contributor of wealth is going to be your
income, which he puts in an equation comprising three
factors.

This is quite interesting and you would hardly find an

explanation like this clearly guiding what income means
particularly from the perspective of wealth and overall
well being.

Accountability = Personal Branding + Personal Platform

+ Taking Risk?

The first and most important is to understand that

accountability means taking charge of what you want to
do, what you are good at and what the world needs.
In one of his works, “How to Get Rich (without
getting lucky)”, he says...

“Essentially you’re working for somebody else, and that

person is taking on the risk, and has the accountability,
and the intellectual property, and the brand. So, they’re
just not gonna pay you enough. They’re gonna pay you
the bare minimum that they have to, to get you to do
their job. And that can be a high bare minimum, but it’s
still not gonna be true wealth where you’re retired”

Essentially accountability means taking your own path,

taking risk, creating your own platform and which is
where the larger pay-offs are laid.
Leverage = Capital + People + Intellectual
Property

Second, part of the equation is leverage, which is

commonly understood as multiplier. However, here,
unlike the Wall Street, leverage is not defined narrowly in
terms of financial leverage. Leverage could be applied in
many other areas such as relationships, network and
others. Here leverage is referred to as enabler for income,
ultimately creating wealth. When we want to do
something or when it takes the equity in what we are
doing if you add leverage the impact is going to quite high.

What can you leverage as an individual?

Naval talks about few things that can be
leveraged:

• Code

• Product

• Media

• Capital

• Labour
Specific Knowledge

The third part of the equation is specific knowledge,

which he explains clearly as knowing how to do
something that society cannot yet easily train other
people to do. He believes that each individual is uniquely
qualified and there is no use in emulating someone and
trying to be someone. It is all about being your own and
completely avoiding competition or focusing mainly on
what you are good at.

In an interview to Shane Parrish of Farnam

Street, he says...

“No one in the world is going to beat you at being you.

You’re never going to be as good at being me as I am.
Your goal in life is to find out the people who need you
the most, to find out the business that needs you the most,
to find the project and the art that needs you the most.
There is something out there just for you. What you don’t
want to do is be building checklists and decision
frameworks built on what other people are doing. You’re
never going to be that. You’ll never be good at being
somebody else”

RoI = Buy-and-Hold + Valuation + Margin of

Safety

The final equation is about RoI, which is basically about

returns, but could be broadly applied in many human
activities than just finance. The RoI is part of the equation
which says when we add income and wealth and then
multiply that with the RoI, the outcome is wealth.

Naval has the distinct ability to borrow or clone a

particular idea from a different subject or stream and
then apply it and leverage its utilities to improve our life
and decision making. And this can be vouched from the
following tweet where he talks about low ROI habits or
addictions.

Importantly anything that we do, apart from managing

finance, the RoI, in Naval’s view, could be derived from
buying and holding something at right valuation with the
judicious blend of margin of safety.

While this completes the checklist, before we sum it up, I

would like to pick my personal favourite noted from one
of his tweets:

The Measure of wealth is freedom.

The measure of health is lightness.

The measure of intellect is judgement.

The measure of wisdom is silence.

The measure of love is peace.