Naval Ravikant is one of the most well-known venture capitalists in Silicon Valley and an outspoken guru when it comes to building wealth and happiness. He freely shares knowledge gleaned over decades of investing on social media and in a biography called The Almanack of Naval Ravikant.
There’s a lot to be learned from Ravikant. In this article, we’ll explore 8 pieces of advice Naval Ravikant has for investors.
Naval Ravikant Investment History
Naval Ravikant is best-known as the founder of AngelList, which launched in 2010 as a platform to bring together startups and VC investors. Through AngelList and his own investing activity, Ravikant has invested in companies such as Uber, Twitter, FourSquare, and Clearview AI. His investments include more than 10 unicorns and dozens of successful exits.
Ravikant is also a cryptocurrency investor. He launched the crypto hedge fund MetaStable Capital in 2014. The fund had over $400 million in assets under management when it was acquired by VC firm Dragonfly in 2022.
Ravikant is very active on social media and has his own podcast. In addition, he allowed his writings and interviews to be collected into a book, The Almanack of Naval Ravikant, written by Tim Ferriss.
Naval Ravikant Investment Advice
Naval Ravikant’s advice focuses on wealth, health, and happiness. A lot of his writing isn’t specifically about investment, but still holds deep wisdom for investors to draw from. Below are 8 pieces of advice from Ravikant.
1. Figure Out Your Goals
To Ravikant, finding success requires first defining your goals. “The hardest thing is not doing what you want,” he says. “It’s knowing what you want.”
For investors, that means starting by defining what you want to accomplish with investing. Is your goal to buy a house, retire securely, or something else? Once you know what you want, you can start creating a plan for how to get there through investing.
2. Approach Life with a Long-term Mindset
Ravikant speaks frequently on the topic of patience and long-term thinking. He advises followers to “play long-term games with long-term people. All returns in life, whether in wealth, relationships, or knowledge, come from compound interest.”
It’s not only the investments already in your portfolio that get better over time. It’s also your knowledge of investing and the trust you develop with the people who advise you on investment decisions. The longer you stick with investing, the more successful you’ll be.
3. Invest in Assets You Can Own
Ravikant is a strong advocate for investing in stocks or real estate or launching your own business. ”You’re not going to get rich renting out your time,” he warns. “You must own equity – a piece of a business – to gain your financial freedom.”
This isn’t to say that investors need to quit their day job. Rather, Ravikant argues that the returns that stocks and other assets offer through appreciation and dividends is critical to growing your wealth. If you’re not already investing, you should be.
4. Find Your Niche
Ravikant talks frequently about the importance of what he calls “specific knowledge.” That is, knowledge that’s deep, targeted, and gives you a competitive advantage in a specific field.
He says that “specific knowledge is found…by pursuing your innate talents, your genuine curiosity, and your passion.” If there’s a field you’re interested in learning more about, go learn about it. Then apply that knowledge to your investing to find companies that the rest of the market has overlooked.
5. Be Contrarian, Especially in a Bear Market
One of Ravikant’s most actionable pieces of investment advice is to go against the grain and be bullish in a bear market. The reason, he says, is that “the low price already bakes their opinion in. Your losses are limited to 1x, and your gains are uncapped.”
This makes a lot of sense, considering Ravikant’s background as a VC investor. Many startups will fail, but those that succeed will generate returns of thousands of percent. While not every investor can or should invest like a VC, it’s important to think about risk/reward when choosing investments.
6. Take a Portfolio Approach
Ravikant also advises investors to build systems for success rather than rely too heavily on any one individual decision. “I try and set up good systems and then the individual decisions don’t matter that matter much,” he says.
Ravikant’s system works like this: “I want to see 10,000 companies and I want to pick 500 that have a shot of being huge. Then I want the option to double down on the 5 winners.”
Investors can build a portfolio in the same way. Research a lot of companies, then pick the ones you think are best. Instead of going all-in, hold some money back and double down on your best picks later.
7. Focus on the Basics
Warren Buffett famously said that he won’t invest in any company he doesn’t understand. Ravikant takes a similar approach. “The really smart thinkers are clear thinkers,” he says. “They understand the basics at a very, very fundamental level.”
In other words, investing isn’t about proving how good you are at following complex product ideas or tasing apart convoluted business structures. You should be able to understand a company and how it makes money at a basic level, then make an investment decision based on that.
8. Cultivate Patience
Even if you do everything right, investing takes time. You have to put in the work to find stocks and evaluate investing decisions. Once you invest, you have to wait – for however long it may take – for an investment to pay off.
Ravikant suggests that many investors struggle because they aren’t patient enough. “If you’re counting,” he says, “you’ll run out of patience before success actually arrives.”
Cultivating patience and being comfortable with waiting is one of the most important skills long-term investors can develop.
Conclusion: Naval Ravikant Investment Advice
Naval Ravikant is one of the most successful VC investors in Silicon Valley. He encourages investors to focus not just on creating wealth, but also on building happiness. Ravikant advocates long-term thinking, applying your passions while investing, and integrating patience into your investing strategy.