Building Wealth with Equity and Leverage – Lessons from Naval Ravikant

Well-known investor and entrepreneur Naval Ravikant frequently offers insightful advice on wealth building. Among his best lines are:

"Wealth can be built by equity and leverage. It is a learnable skill."

True wealth comes from having valuable assets (such as property or stocks) and leveraging resources (such as technology, money, and people) to make your efforts more efficient, not merely from working hard.

Let's review some actual case studies of accomplished businesspeople. In India we have Sanjeev Bikhchandani and Vijay Kedia. Globally there are Elon Musk and Jeff Bezos. These people are masters at expanding their companies utilizing borrowed funds and stocks.

1. Equity—owning a part in the game

Naval Quote: 

"You will get rich by giving society what it wants but does not yet know how to get. At scale."

Equity in a company is holding a stake. You start to own a portion of the business instead of just getting paid. Your cash goes far more if the company expands.

First example: Vijay Kedia's small business investing.

Investing in smaller businesses like Atul Auto, Cera Sanitaryware, and Aegis Logistics brought Vijay Kedia his riches. His shareholding grew increasingly valuable as these companies expanded.

Lesson: Never rely simply on a pay-back. Support companies with growth potential.

Second example: Jeff Bezos, the Amazon owner. 

Rather than merely working hard.

Jeff Bezos started Amazon not only for profit. He owned some of the company, hence his riches expanded much as Amazon developed. He turned a little online bookshop into a trillion-dollar firm by using his profits to expand the company greatly.

Lesson: Bezos would not be a billionaire today if he had worked for another company instead of launching Amazon. Creating wealth depends on equity.

2. Leverage - Multiplying Efforts Without Increasing Working Hours

Naval Quote: 

"Fortunes require leverage. Business leverage comes from capital, people, and products with no marginal cost of replication (code and media)."

Leverage reduces effort required while yet enabling more achievement. Three main types exist:

• Capital: Expanding a company with funds derived from partners
• Labor: Attaching fresh staff to expand your company.
• Code & Media: Create digital tools (such as movies, blogs, and software) that support your all day, every day needs.

Sanjeev Bikhchandani, using code to create Naukri.com

Building Naukri.com, the largest job platform in India, Sanjeev Bikhchandani used technology—code. Though he had limited means, he used the internet to assist job searchers in locating companies. Owned by Info Edge, which also owns Naukri, today its value exceeds ₹70,000 crore.

Lesson: Make digital objects like applications, websites, or social media channels that can flourish on their own free from constant involvement.

Elon Musk, for instance, is expanding Tesla and SpaceX using funds and employees.

Elon Musk did not single-create Tesla and SpaceX. He consulted:

✅ Money: To back Tesla, SpaceX, and Neuralink, he raised billions from investors. 

✅ Workforce: He engaged the top programmers to implement his plans.

✅ Code & Automaton: Tesla vehicles run software driven by artificial intelligence that improves with time.

Musk recognizes that true success comes from exploiting other people's time and money even if he works really hard.

Lesson: Try not to attempt everything by yourself. Grow using money, technology, and personal assistance as well as tools.

3. Play Long-Term Games with Long-Term People

The naval quote is 

"Play long-term games with long-term people."

Building riches requires time. Not months, but decades are the most successful companies think in.

First example: Radhakishan Damani – D-Mart Method

Radhakishan Damani founded D-Mart by giving long-term success top priority over short payback. Rather than saddling himself with debt, he used his money to steadily expand the company. D-Mart nowadays is worth more than ₹3 lakh crore.

Lesson: Building enduring riches requires long-term thinking and patient.

Jeff Bezos, for instance, said, "Amazon Will Earn Money in the Long Run."

Investors were dissatisfied when Bezos founded Amazon since he had few profits for several years. His priorities were expanding the company, improving facilities, and fostering client loyalty. Globally, Amazon leads in online purchasing nowadays.

Lesson: Emphasize long-term success rather than only transient results.

4. Be Your Own Employer

 Naval Quote: 

"Learn to sell. Learn to build. If you can do both, you will be unstoppable."

The best companies produce something practical and market it effectively.

First example: Nithin Kamath - Building Zerodha from the Bottom Up

Starting Zerodha without any outside funds, Nithin Kamath used He sold millions of traders his revolutionary stock trading gadget. Zerodha nowadays is valued more than ₹30,000 crore.

Lesson: You won't have to rely on people if you can manufacture and market products.

Elon Musk: Learning Sales and Engineering at the Same Time

Musk excels at marketing as well as in engineering. He has developed the skills to sell millions of Tesla vehicles as well as to convince investors to back Tesla, SpaceX, and Neuralink.

Lesson: Learn how to create profitable goods and properly market them.

5. Profit from Your Knowledge Not Only from Your Time

Naval Quote: 

"You’re not going to get rich renting out your time. You must own equity—a piece of a business—to gain financial freedom."

Like with a job, if your income comes from working for a certain period of time only, you will only make so much. Should you have anything valuable, it could generate income even in non-employment.

Mukesh Ambani: Scaling Reliance Outside of Oil

From an energy firm, Mukesh Ambani transformed Reliance into a major participant in technology and telecoms. Establishing Jio, he created something profitable on its own free from direct intervention.

Lesson: Work on producing money-earning projects.

Jeff Bezos, for instance, makes money even as he sleeps.

Bezos does not have to show up daily at Amazon. No matter whether he is on vacation or in a conference, his Amazon investment makes money constantly.

Owning real estate implies your money serves you rather than the other way around.

Final Notes: Start Your Road to Riches Right Now

According to Naval Ravikant, becoming wealthy is basically about having a clever plan rather than only depending on chance.

✅ Own shares—start a company or buy stocks.

✅ Make sensible use of money, people, and technology among other resources.

✔ To create actual riches, be patient and give long-term goals top priority.

# Create and market (learnable) useful talents.

😆 Create something profitable to stop trading your time for money.

Drop your ideas into the comments! 🚀