Why does Naval emphasize that 'finding leverage' is key to modern wealth creation?

Okay, no problem. Let's talk about Naval and his theory of "leverage." I'll try to explain it in plain English.

Why does Naval emphasize that "finding leverage" is key to creating wealth in the modern era?

Imagine you want to move a one-ton boulder all by yourself. Relying on brute strength alone would be nearly impossible, even if you exhausted yourself. But if you have a long enough pole (a lever) and a fulcrum, you only need a gentle push to move the stone.

That's the magic of "leverage": using a small input to achieve a massive outcome.

Naval's core idea is that in the modern world, creating truly significant wealth doesn't come from "selling time" or working harder hour by hour. Instead, it comes from finding and employing the "leverage" unique to our era.

The Old Game vs. The New Game

Before the internet became widespread, the wealth formula for most of us looked like this:

Wealth = Hours Worked × Hourly Rate

You are a doctor; you see one patient, get paid once. You are a programmer; you write a line of code, get a salary. You are a worker; you tighten one screw, get piece-rate pay. To earn more money, you either had to "work overtime" (increase hours worked) or "get a promotion" (raise your hourly rate). But no matter what, your time and energy have limits, so your income hits a ceiling.

The modern wealth creation Naval talks about is a completely different game. Its formula is more like:

Wealth = Your Unique Ability × Amplification Factor of Leverage

Your hours worked are no longer the key variable. You might work just a few hours, but by using powerful leverage, the output can work for you 24 hours a day, 365 days a year, serving thousands or even millions of people.

So, what exactly are the "leverages" Naval talks about?

Naval categorizes leverage into several types, the most crucial of which are two "new" leverages – unique gifts of our time.

1. Labor Leverage

This is the oldest form. You become a boss and hire employees to work for you. Your output = your own output + the total output of your employees. This is the logic of the industrial age, but management is a headache, and expansion has limits.

2. Capital Leverage

This is making money with money. You invest in stocks, start a company, do venture capital. This is the game of financiers and investors. This leverage is extremely powerful, but its entry barrier is: you need money to start with.

3. New Leverage: Code and Media

This is the core of Naval's thinking and what he believes ordinary people should focus on seizing. These two leverages share a divine-like characteristic: Near-Zero Marginal Cost of Replication.

What does that mean?

It means the cost of copying and delivering this thing to a new user is almost zero.

Code: You develop an app. Serving 10 users versus 100,000 users might increase server costs slightly, but the cost to replicate the software itself is zero. You write the code once, and it can work for countless people worldwide simultaneously, even while you sleep.
Media: You record a podcast, write a viral article, create an educational video. Producing it took some time, but having 100 people see it versus one million people see it costs you almost nothing extra. Your ideas and knowledge are amplified infinitely through media.

Most importantly, these two new leverages are "Permissionless".

Learning to code doesn't require approval from any department. Starting a blog or video channel doesn't need anyone's permission. As long as you have the ability to create something valuable, you can start using these leverages immediately. This was unimaginable before when appearing on TV or publishing a book required layers of approvals and gatekeepers.

A Simple Example to Understand

Suppose you are an expert baker making delicious "keto cakes."

The Old Game: You open a cake shop. You work from dawn to dusk, baking maybe 50 cakes a day for the local community. Your income depends entirely on how much time you spend and how many ovens you have. This is "selling time."
The New Game (Applying Leverage):
1. Find Unique Ability: You have deep expertise in keto cake recipes and techniques.
2. Assess Accountability: You build a personal brand online under a name like "Keto Kitchen by Lee."
3. Apply Leverage:
  - Media Leverage: You create beautiful short and long video tutorials of your process and post them on Douyin, Bilibili, YouTube. One video goes viral, showcasing your expertise to millions.
  - Code Leverage: Riding the wave of your viral content, you launch a paid "Online Course on Keto Baking." Customers buy access and can view the course anytime on your website. This website (code) automatically collects payments and delivers the course for you 24/7.

See? Through "Media" and "Code" leverage, your specialized knowledge is amplified thousands of times over. You no longer serve just 50 neighbors; you serve thousands of keto enthusiasts nationwide or even globally. Your income becomes completely decoupled from "how many cakes you can bake per day."

Conclusion

Naval emphasizes "finding leverage" because he recognizes the fundamental shift of our era: The core elements of creating wealth have shifted from "capital" and "labor" to "knowledge" and "information."

In today's world, you don't need vast sums of money or to manage a large team. You just need to:

Find a unique skill you genuinely love and excel at.
Build a personal brand by putting your name behind it.
And crucially, use the "Code" and "Media" leverages – these almost-free, incredibly powerful tools – to amplify your value to the maximum.

This is why he says that finding and applying leverage is the necessary path to financial freedom for modern individuals. You're no longer competing over who can "grind the longest," but rather over who can "leverage better."