How to Make Wealth – The Career Bound Podcast (Ep 9)

Career Bound by Praxis

In this episode, we break down Paul Graham's timeless essay, How to Make Wealth, discussing several of the key insights and what it means for your career + financial future. Paul Graham is an entrepreneur, venture capitalist, and founder of Y-Combinator. His essay draws on his experience as both a founder and investor working with early-stage startup companies in the process of "creating wealth".

Graham discusses the advantages of working at an early stage company – as a way to average your productivity with a small group of other highly-competent, high-output people. As opposed to working at a large corporation, where your productivity is averaged across thousands to tens-of-thousands of people, often times very average, at best. He shares how this difference in your own productivity multiple directly impacts your earning potential, and why startups offer a disproportionate advantage in wealth creation.

Excerpt from the essay: "Startups are not magic. They don't change the laws of wealth creation. They just represent a point at the far end of the curve. There is a conservation law at work here: if you want to make a million dollars, you have to endure a million dollars' worth of pain. For example, one way to make a million dollars would be to work for the Post Office your whole life, and save every penny of your salary. Imagine the stress of working for the Post Office for fifty years. In a startup you compress all this stress into three or four years. You do tend to get a certain bulk discount if you buy the economy-size pain, but you can't evade the fundamental conservation law. If starting a startup were easy, everyone would do it."

Graham also explains the difference between money and wealth. And what you need in order to create wealth – i.e. leverage and measurement.

This essay offers keen and timeless insights into the process of wealth creation, as well as important perspective about how the types of environments / institutions you work in have a direct impact on your earning potential.

Articles & Links Mentioned:

How to Make Wealth by Paul Graham: http://www.paulgraham.com/wealth.html

The Almanack of Naval Ravikant: https://www.navalmanack.com/

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