• The 3 Ms of Leverage

• The Old Rich Ruse

• The New Rich Rule

• Rat Race Escape Plan: Productize Yourself in 3 Ste …

• Simple Summary

I quit law to become an entrepreneur, all because of this guy.

This is Naval Ravikant.

He’s the mind behind AngelList and an investor in Uber and Twitter.

Naval's also known for his famous Twitter thread: “How To Get Rich (without getting lucky).” [1]

For the last 5 years, I’ve spent hundreds of hours consuming and curating his content.

And in this Lesson, I’m gonna share Naval’s simple 3-step process to break free from the rat race and join the new rich.

If you’ve ever felt stuck in a 9 to 5 job and dreamt of financial freedom, keep reading.

The 3 Ms of Leverage

What is Leverage?

Leverage is the difference between your inputs and your outputs. [2]

• It boils down to how much you get for the time you spend getting it.

High leverage means you get a large output from a small input.

• e.g. An author spends 1,000 hours writing a book and makes $1,000,000.

  • 1,000 hours = input

  • $1,000,000 = output

    ($1,000/hour)

Low leverage means you get a small output from a high input.

• e.g. A lawyer works a 60-hour week and makes $2,000.

  • 60 hours = input

  • $2,000 = output

    ($33/hour)

High leverage activities make you wealthy.

Low leverage activities keep you trapped in the Rat Race.

3 Ms of Leverage

Manpower

Manpower refers to the use of humans to perform tasks and achieve goals.

• Basically, this is people working for you (labor).

• e.g. Let’s say you own a barber shop.

  • 1 barber (input) can do one haircut (output) at a time.

  • You can’t do more haircuts at the same time without getting more barbers.

Manpower’s the oldest form of leverage.

It’s also the worst, because managing people is messy af.

Money

Money is a medium of exchange that facilitates transactions.

• It’s a good form of leverage because it can be converted to others forms.

• e.g. You can spend $1,000,000 (input) on manpower that generates $2,000,000 for you (output).

The bad thing about money is that only a few people have a lot of it.

Meaning rich people can leverage their riches to get richer, and poor people can’t.

Media

Media refers to communication channels through which information’s distributed.

• First we saw the printing press (e.g. books), then broadcast media (e.g. radio) and now the internet (e.g. code).

Media’s the new form of leverage, and it’s how the New Rich make their fortunes.

• e.g. You spend 250 hours (input) creating an online course that makes $250,000 (output).

There are two broad categories of media:

Content

Content refers to the creation and distribution of information through media platforms.

• Content includes videos, podcasts, online courses, books, audiobooks, blogs, newsletters, social media posts etc…

• e.g. You record one podcast episode (input) that reaches millions of people (output).

Code

Code is a set of instructions computers follow to do things over and over again.

• Coding languages are used to structure websites, develop apps and video games, analyse data and run operating systems.

• e.g. You write code (input) that lets you auto-magically identify any song that’s playing (output). Shazam!

The Old Rich Ruse

The Old Rich Ruse refers to the traditional wealth-building model where individuals trade their manpower for money.

There are 3 reasons why it’s a ruse:

1. Rat race

The rat race is a never-ending cycle of working, earning and spending.

• It’s like running around a circle track, never reaching the finish line.

• The Old Rich use manpower and money to get richer while everyone else keeps running around the track.

• E.g. Your boss makes 10X your salary working 20 hours a week by leveraging the manpower of you and your colleagues.

2. High marginal cost of replication

Something has a high marginal cost of replication (MCR) if it costs a lot to duplicate.

Your manpower has a high MCR when you trade it for money.

• e.g. If you earn $33/hour, that $33 has a high MCR because it costs 1 hour of manpower to duplicate.

  • And your manpower (time) is finite. There are only 24 hours in a day — and you gotta eat, shit and sleep for at least at third of them.

  • This limits your money-earning potential and traps you in the cycle of the Rat Race.

3. Permission-ed

Manpower and money are permission-ed forms of leverage.

• You can’t just conjure them out of thin air.

  • You willingly give your manpower to your boss.

  • Your boss willingly gives your their money.

• Both require permission — which is inefficient and low-leverage.

The Old Rich made you believe the Rat Race, a high marginal cost of replication and permission-ed forms of leverage like manpower and money are the only vehicles to wealth.

But that’s all a ruse.

The New Rich Rule

The New Rich Rule refers to the modern wealth-building model where individuals leverage media to make money online.

There are 3 reasons why you should follow the New Rich Rule.

1. Curiosity-Based Creation

Curiosity-Based Creation involves leveraging the internet to create content-or-code-based products around your genuine curiosities.

• e.g. You create a community that helps people improve their online writing because that’s something you’re genuinely curious about.

Pursuing Curiosity-Based Creation over time leads to a collection of products that uniquely represent your interests.

• i.e. Curiosity-Based Creation is how you create your niche of one.

2. No marginal cost of replication

Something has no marginal cost of replication (MCR) if it doesn’t cost anything to duplicate.

Both categories of media — content and code — have no MCR because once a piece of content or code is created, it can be reproduced infinitely for basically no additional cost.

• e.g. 3 hours ago I published this thread post and then finished writing and editing this Lesson. While I was doing that, that one post (input) was replicated 1,900 times (output). For free.

  

• Without media, I would’ve had to use lots of manpower or money to reach 1,900 people that quickly…

• Leverage.

3. Permission-less

Content and code are permission-less leverage.

• i.e. Unlike manpower and money, you can leverage media without requiring somebody else’s permission to use it or succeed.

If you want to earn with your mind and not your time, you need to break the chains of the Old Rich Ruse and embrace the New Rich Rule. Here’s how.

Rat Race Escape Plan: Productize Yourself in 3 Steps

The Rat Race Escape Plan is a 3-step process to break free from the manpower-for-money trap and join the new rich by productizing yourself.

Productize Yourself

Productize Yourself involves using your knowledge and leveraging media to create and distribute a valuable product.

That’s how you productize yourself.

And those 3 things — specific knowledge, accountability and leverage — equal the steps of the Rat Race Escape Plan.

1. Acquire specific knowledge

Specific knowledge is taught through apprenticeships, not schools.

You acquire specific knowledge by engaging in Curiosity-Based Creation.

By doing things that feel like play to you but looks like work to others.

• e.g. Building an online community to help people write online feels like play to me, but I know lots of people couldn’t think of anything worse.

2. Take accountability

• i.e. Taking accountability requires you to get skin in the game.

The opposite of an entrepreneur is an employable person.

Nassim Taleb has some kind words to say about such a person:

You must embrace accountability and take business risks under your own name to be rewarded with leverage.

3. Choose leverage

Manpower and money aren’t readily available to everyone. Media is.

• So choose one category of media — content or code.

I suggest content because it’s how you build a personal brand (i.e. take accountability) and AI is getting better at writing code by the day.

Simple Summary

3 Ms of Leverage = Manpower, Money and Media (content and code).

Old Rich Ruse = Traditional wealth-building model of trading manpower for money

New Rich Rule = Modern wealth-building model of leveraging media for money.

Rat Race Escape Plan = Productize yourself by acquiring specific knowledge, taking accountability and leveraging media or machine code.

The Lesson

Break free from the Old Rich Ruse by following the New Rich Rule and Rat Race Escape Plan.

Cya

That’s what Saints College helps you do.

• It’s my community that gives creators a roadmap to their first 1,000 followers through online writing without feeling overwhelmed or lonely.

• It’s currently free, but I might make it paid soon.

Steal your free spot here before someone else does x

Anyway, that’s it for this Lesson.

Keep it simple until the next one.

In the meantime, check out my man Aaron’s newsletter below ⬇️

(You’ll love it if you have lots of interests and hate the idea of “niching down”)

Resources I consumed to create this Lesson:

1. How to Get Rich (Without Getting Lucky) (Naval, 2018)

2. $100M Leads (Alex Hormozi, 2023)

3. The Almanack of Naval Ravikant (Eric Jorgenson, 2020)

4. The Art of Focus (Dan Koe, 2024)

5. Skin in the Game (Nassim Nicholas Taleb, 2018)

Bonus download:

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The "New Rich" Secret: 3 Steps to Productize Yourself