Earn with Your Mind, Not Your Time
Inspired by the wisdom of Naval Ravikant, Paul Samuelson, and Warren Buffett
In today’s fast-paced world, we often hear phrases like “time is money,” but there’s something deeper to consider: earning with your mind, not just your time. This idea, famously quoted by Naval Ravikant, reminds us that while hard work is important, smart work — leveraging knowledge and making strategic decisions — is what builds true wealth over time.
Let’s break down some key insights that can transform how you think about earning, saving, and investing:
1. Understanding Rental Yield
When it comes to real estate investments, calculating rental yield is a fundamental step. It’s simple:
(Annual rent / Property value) x 100.
This gives you a clear picture of the return on your investment. If you’re paying rent or buying a property, this is a quick way to gauge whether it’s worth your money. Smart property decisions help maximize your financial growth in the long run.
2. Health Insurance: More Than a Safety Net
Health insurance isn’t just a backup plan for bad times. It’s a key component of financial security. When choosing health insurance, look for policies with no room rent caps, a wide cashless hospital network near you, and coverage for pre-existing diseases. These little details can save you from big financial trouble later on. Additionally, consider life insurance with critical illness and disability riders — they ensure that you’re covered no matter what life throws your way.
3. The Long Game of Investing
Investing is not about instant gratification. As economist Paul Samuelson wisely said, “Investing should be like watching paint dry or watching grass grow. If you want excitement, take $800 and go to Las Vegas.”
Investing is about patience, consistency, and understanding the power of compounding. The biggest mistake many people make is seeking quick returns, often resulting in financial loss. The truth is, the biggest risk is taking no risk at all.
Start by building an emergency fund that covers at least 12 months of your expenses. This will be your safety net. From there, you can structure your savings with a simple formula:
- 10% in cash for immediate needs
- 20% in a bank account for short-term savings
- 70% in safer investments like fixed deposits (FDs)
Look beyond just saving. Invest in long-term options like the National Pension Scheme (NPS) or Public Provident Fund (PPF). If you want to invest in gold, consider Sovereign Gold Bonds (SGB) for better returns than physical gold. Corporate bonds, Real Estate Investment Trusts (REITs), and mutual funds offer additional avenues for steady, long-term growth.
4. Crypto and New-Age Investments
In today’s world, new investment opportunities like cryptocurrencies are also gaining popularity. Platforms like WazirX and CoinSwitch have made it easier to get started. However, as with any investment, education and caution are key. Understand the risks and invest responsibly.
5. Slow and Steady Wins the Race
Warren Buffett, one of the greatest investors of all time, once said: “The problem is that no one wants to get rich slowly.” This is a powerful reminder that wealth creation is a marathon, not a sprint. We often see overnight success stories and believe they are the norm, but real financial success comes from making steady, informed decisions over time.
6. Mindset Matters: Choose Your Hard
Finally, let’s acknowledge that every choice we make comes with its own set of challenges. Saving is hard, but being broke is harder. Learning about investments is hard, but suffering from bad investments is even worse. Paying off debt is hard, but letting debt grow unchecked is the hardest of all.
As Montesquieu once said: “If you only wished to be happy, this could be easily accomplished; but we wish to be happier than other people, and this is always difficult, for we believe others to be happier than they are.”
So, choose your hard wisely. The effort you put into financial discipline today will bring peace and stability tomorrow.
In conclusion, the path to financial freedom isn’t about quick wins or shortcuts. It’s about developing the mindset to make smart choices and staying patient enough to watch those choices bear fruit over time. By focusing on earning with your mind — making informed decisions, taking calculated risks, and investing with long-term goals — you can build a life of financial independence.