Welcome back to this series. In the previous piece, we asked a question: if we cannot even control our own thoughts, are we really in control of our lives? Today, we turn to one of the most central ideas in Naval’s philosophy—leverage.
Naval once said: the world can be divided into two kinds of people—those who understand leverage, and those who do not. When people hear “leverage,” they often think of borrowing money, investing, getting rich quickly. But these are merely its most superficial forms. Earlier, we said that leverage is the compounding of time. That’s not wrong—but it’s incomplete. A more precise definition might be: leverage is paying a price to access an output beyond your current capacity, and sustaining that advantage for as long as possible—ideally, for a lifetime.
Take a common financial example. You pledge an asset—stocks, real estate, or credit—borrow capital from a bank, and pay interest as the cost. On the surface, you are using borrowed money to generate higher returns. But at a deeper level, you are doing something else: you are pulling future resources into the present. You bring forward future cash flows and assume that future returns will cover today’s cost. That is the true structure of leverage.
And the key here is never the spread. It is whether your judgment is correct. If your judgment is right, leverage amplifies your gains. If your judgment is wrong, leverage amplifies your losses. Leverage is not a tool for getting rich. It is a system that magnifies the quality of your decisions.
The same applies in an artistic career. When you invest time, money, and even reputation into your work, you are also using leverage. You are committing present resources to a future value that may or may not materialize. Have you noticed—what truly matters lies within? Mind shapes judgment. Judgment shapes decisions. Decisions are what leverage amplifies. As we said before: Mind → Judgment → Decision → Leverage.
Layer 1: The Nature of Leverage
Let’s borrow a way of thinking from Jensen Huang and break leverage down into layers. At its core, leverage does only one thing—it amplifies. It amplifies good judgment, and it amplifies poor decisions. That is why Naval says: in the age of leverage, one correct decision outweighs ten thousand hours of blind effort.
But here is a harsh reality: many correct decisions run counter to human nature—they are neither intuitive nor comfortable. And precisely for that reason, they are rare.
For example: when I was reading Rich Dad Poor Dad, I once saw someone online dismiss it as outdated—“not worth discussing anymore.” Over time, I observed his investment behavior. He made many of the very mistakes the book warns about—sunk cost fallacy, confusing assets with liabilities, and a blurred sense of true value. Despite the unexpected explosion of AI in recent years—a rare inflection point in human history—he was largely absent from it. He missed the opportunity. That, again, reminded me how valuable judgment truly is. Leverage does not make you stronger. It only makes you more of who you already are. Is your judgment worth amplifying?
Layer 2: Three Forms of Leverage
1. Labor — the most intuitive form. When you hire others, you exchange money for their time and capability, allowing total output to exceed your personal limit. In essence, you extend your reach through other people’s time.
2. Capital — as discussed earlier. You bring future resources into the present through borrowing or financial structuring. As long as returns exceed costs, the difference compounds.
3. Network (code, media, AI) — the most powerful and unique form of leverage in our era. It has one defining trait: it does not require your continuous presence. A piece of code, an article, a work of art—once created, they continue to operate without you. While you sleep, travel, or do nothing at all, they are still being replicated, distributed, and amplified. That is why the upper bound of network leverage is nearly infinite.
But remember—leverage is neutral. It does not guarantee acceleration; it can just as easily magnify your constraints. If you repeatedly produce content that diminishes your value, you are simply amplifying your own disadvantages. As we’ve emphasized: you must understand the nature of leverage.
Have you noticed why, in this era, we constantly see people rise to fame—and fall just as quickly? Because: without leverage, you can fail slowly. With leverage, you fail fast.
This is a longer piece, so we’ll pause here for Part 1. But before we end, I want to point to a form of leverage that is unfolding right now—you already know what it is. AI.
The Most Unique Leverage: AI
This is a fundamentally different kind of leverage. If we look back at the previous forms—labor, capital, network—they all share one thing in common: they are centered on the human. You use them to amplify yourself. But AI introduces something else entirely: replacement—agentic AI.
Many people quote Jensen Huang: you won’t be replaced by AI—you’ll be replaced by someone who uses AI. But I would argue this still sits at a surface-level understanding. Let’s not forget—his message also serves a purpose: to guide the world into the NVIDIA ecosystem.
So what does true “agency” look like? The outsourcing of intelligence. The outsourcing of inspiration. The outsourcing of thinking itself. Leverage is no longer just amplifying humans—it is beginning to replace parts of them. Take the art world as an example. Art is trying to incorporate AI into its discourse. But the deeper reality might be this: AI is consuming art.
Imagine a near-future scenario: the form of the work is generated by AI; the technical execution is optimized by AI; even the original concept is produced by AI. Then what remains of the human? In this structure, it appears that humans are using AI. But at a deeper level, humans become the interface—artists acting as agents of AI.
When leverage evolves to this stage, the question is no longer whether you possess leverage—but whether you are still the one being amplified. If even thinking itself can be outsourced, then the next question becomes: are you the one making decisions? In this era, what is real leverage? We’ll continue next time. (1/2)
