38 Weeks to Get Rich
Welcome to the “38 Weeks to Get Rich”, where each week we’ll break down a section from Naval’s iconic tweetstorm and interviews on the topics of wealth, freedom, money, status, and happiness.
The full PDF is available here.
What follows is my summary & key takeaways to help you digest the 127 page document.
Week 10: Play Long-Term Games With Long-Term People
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.
Compounding works over a long time period.
Essentially, all the benefits in life come from compound interests. Whether it’s in relationships, or making money, or in learning.
If you increase 20% per year for 30 years, that’s not just 30 x 20%; it’s such a larger number. Look at this comparison to get a better understanding of compound interest:
Notice, especially, how the increase really only comes towards the end. That’s why we don’t want to think short-term, we want to build long-term. Remember, this isn’t “get rich quick,” this is about creating a mindset & lifestyle of wealth.
For the most part, if you want to be successful you have to work with other people. And you have to figure out who can you trust, and who can you trust over a long period of time. You want to find the people you can keep playing the game with, so that your efforts compound, and you can collect the major rewards, which are usually at the end of the cycle.
When you switch industries, you’re starting over from scratch.
If you keep hopping from industry to industry, even though there might be a better opportunity, you’re going to be starting from scratch. You’re not going to know who to trust. They’re not going to know to trust you. This is true for industries, and it used to be true for location, but as we learned last week, we’re becoming more and more location-independent thanks to the internet.
Long-term players make each other rich.
Short-term players are only thinking about themselves. In a longterm game, it’s positive sum. We’re all baking the pie together. We’re trying to make it as big as possible. And in a short term game, we’re cutting up the pie.
Returns come from compound interest in iterated (repeatable) games.
“Good Health” doesn’t come from one workout.
A “Good Marriage” doesn’t come from one date.
A “Good Business” doesn’t come from one sale.
It’s important to do good things again and again and again (iterated), with a long-term focus, with other people that you trust, that are also thinking long-term.
When you have been doing business with somebody, for ten years, twenty years, thirty years; it just gets better and better because you trust them so easily. The friction goes down, and you can do bigger, and bigger things together.
That’s the power of compounding.
Next week we’ll cover chapter 11, and discuss the importance of Picking Partners With Intelligence, Energy, and Integrity.
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