Today, I finished reading The Almanack of Naval Ravikant by Eric Jorgenson. The section on wisdom and judgment caught my attention. He starts by defining the two:

• Wisdom – Knowing the long-term consequences of your actions
• Judgment – Wisdom applied to external problems

Then he says they’re tightly linked. You need to know the long-term consequences of your actions and then capitalize on that understanding by making the right decision to get the desired outcome.

Naval says judgment is underrated but most important in the modern leverage age. One correct decision can lead to a massive win.

Entrepreneurs learn from experience—their own or others’. Experience gives them the wisdom to understand what actions are available and the likely outcomes of each.

Wisdom is helpful in itself, but as Naval says, applying it is most important. How to apply wisdom to your situation isn’t always obvious or easy, but the most successful entrepreneurs I know have mastered applying wisdom to get the outcome they want.

Your ability to apply wisdom—what Naval calls judgment—is the key to outsize entrepreneurial success.

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