Principal-Agent Problem - Deepstash
How To Get Rich Naval - Every Episode

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How To Get Rich Naval - Every Episode

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Principal-Agent Problem

A principal is an owner. An agent is an employee.

The principal's incentives differ from the agent's incentives. The business owner wants what's best for the business and what will make the business successful. The agent wants what will look good to the principal or make them personally the most money.

 

If you're an employee, your most important task is to think like a principal. Train yourself to think like a principal. Ask "What would the founder do?" If you think like a principal, it's a matter of time until you become that.

99

772 reads

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Ethics is something you do

Everyone has a personal moral code. When you are in business long enough, you'll realise that much of it is about trust. You don't want to reevaluate every discussion or continually look over your shoulder. 

When you are ethical, you'll attract other long-t...

96

831 reads

Working for yourself

Anybody who wants to be entrepreneurial and wants to reliably improve their ability to create wealth is patient and looking at it from a long-term view.

Pay attention to who is getting leverage off of the work you're doing. Look who's above you and above th...

98

946 reads

Discover what you're good at

Discover what you're good at

You generally will do better in a smaller organisation as you will have more accountability and your work will be more visible. You're likely to try different things, which can help you discover what you're uniquely good at. 

The long-term goal is to work for ourselves. Peo...

101

839 reads

Productize yourself

Find out what is unique to you that you're good at and apply leverage. Ask if what you do is authentic to you. And then, ask if you are productising it. Are you scaling it with labour or capital or code or media?

So, making money is not a skill. It is who you are, done a million tim...

119

1.1K reads

How to get rich: Common failures

  • People often don't understand what specific knowledge is or how to get it. 
  • People don't understand what accountability consists of. It means you have to be willing to fail publicly. You have to let people criticise you.
  • Don't refuse to do th...

104

1.04K reads

Envy cuts both ways

Envy can motivate you to find the right thing. If you're doing work that you don't like, envy can motivate you to find something better.

But it can also eat you if you let it follow you your entire life.

89

842 reads

Get rich quick schemes

If there was a quick way to get rich, it's already been exploited. If someone is selling you a get rich quick schemes such as crypto or an online business or seminar, that's often their scheme to get rich by making money off you.

If anyone is giving advice on how to...

102

1.1K reads

Work on your internal state

Work on your internal state

When you become wealthy, you'll realise that you were not really looking for it in the first place. You're still the same person. If you're happy, you're happy. If you're unhappy, you will still be unhappy. 

Most importantly, you can't buy a fit body, a calm mind, and a house filled with lo...

122

1.28K reads

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Julius Caesar famously said, “If you want it done, then go. And if not, then send.” What he meant was, if you want it done right, then you have to go yourself and do it. When you are the principal, then you are the owner—you care, and you will do a great job. When you ar...

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Stubbornness is an obstacle to changing people's opinions. Stubborn people will outright reject forceful arguments. They think outcomes can be subject to their will.

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