Hello friends and subscribers,
Today's email is very practical. I want to share the mental models I use every day. Mental models are systems for thinking. It's a list of questions to ask when faced with a decision, and each model has its own separate list of questions.
I look at mental models as ways of creating the life I want. This post is not about magical equations and spreadsheet wizardry. The models I use are simple and optimize my quality of life.
Let's get into it.
I've gambled more than I care to admit. I'm lucky, though. I've learned a lot from it. Casino games are almost always rigged for the house. Sometimes you have a 49% chance of winning, sometimes 2%, but it's always rigged for them to win.
Real-life opportunities aren't like that. There are some things in life that don't take much time, effort, or money, but can create big gains. Sometimes you can have a 98% chance of winning. Sometimes, only 51%.
Take writing online, the highest leverage thing you can do to build a professional career. What does it cost you to write a few hundred words and post them on a regular basis? Not much. But the gains from this habit are massive for your professional success.
The same goes for your health. How much is a gym membership in the big picture? What gains are waiting for you on the other side of working out every day?
When making big decisions, I look at how big the gains vs what I have to do and have to lose. If I'm not hurting anybody, I dive headfirst into these asymmetrical opportunities.
"All I want to know is where I'll die, so I can never go there." - Charlie Munger.
The nature of anti-goals is structuring your day so you guarantee the minimum. Big gains come from consistency over time. Once you've built the habit, we can add more time to our habits from there. Start small.
If I know that I'll die because I never work out, I build it into my day to do some kind of workout. No matter what. Even if it's just 20 pushups. I have to move every day. In time, the 20 pushups grow into a full workout. That's how great habits start. With Anti-Goals.
When faced with what to do or what not to do, I find myself taking the option that minimizes regret. Why? Because I don't want to look back and say "what if I did this or that." It's such a big deal, and it often goes unnoticed.
Trust me, with enough time, you'll appreciate trying and failing. It's better than wondering what "could have been."
Jeff Bezos himself is on record saying that he used this model when deciding to start Amazon. Something here for sure (even if Jeff wasn't the one popularizing it).
Utility x happiness = sustainability.
When considering what to do or not to do, consider how happy it will make you. The best decisions create long-term outcomes. The best business strategy is the one that creates massive profits forever. Of course, without hurting people. The best relationship strategy creates amazing friends/partners for life. Great things last. Great strategy creates great things.
Without happiness, things don't last. Great things have to make us happy. Happiness is the multiplier that creates sustainability. There is nothing worse than hating what you're doing. It drains you and - given enough time - you'll stop. There goes your great habit.
When faced with options, never forgot to account for how happy the process can make you. It's cliche but it's true. Happiness is a multiplier. Once happiness is negative, there's no hope.
Every time when I'm faced with a decision, I review the context. What is actually at the root of what I'm doing?
When faced with a negotiation, and the other side tells me "that's just how it is," I know it's not true. I then ask, "at its very core, what are we talking about?" There's always something more to it.
Take work. Companies often charge a fortune for their services and products, and I understand why. When it's valuable, people pay. But big companies operate on the basis of secrets. They don't tell you how they do it, and that's usually a great opportunity to apply First Principles.
A classic example is from Elon Musk, the founder of Tesla and Space X.
When building batteries, Musk noticed that they seemed oddly expensive. So, he broke down what's in a battery with first principles. Batteries are only steel, brass, coils, zinc, PVC, and a few more materials. Musk realized it's the way the metals were shaped and managed that made batteries.
So, he didn't buy the batteries. He bought the materials (cheap) and made hi own (also cheap). Suddenly, the expensive batteries weren't expensive anymore. He worked backwards from the root problem (getting batteries), and figured out the best way possible. He made his own.
Wine is just fermented grapes. The list of examples goes on and on.
A chess player might look at a review of the game they lost and realize their blunder.
"Pawn to E4 lost the game"
Lesson: don't play Pawn E4 again.
This is an outcomes mindset. it's a good start, but weak in the long term.
A chess grandmaster looks at the same game, and sure, they question the move. But they do something else. They ask the key question.
"Why did I think Pawn E4 was the right move there?"
They understand the thinking that created the mistake and stop it at the source. It's the right way to go about assessing mistakes (and successes).
Understanding the thought process that created the mistake is more important than the mistake itself. That's the system. That's systems thinking.
We spend so much time finding ways of improving our quality of life. Better food, better workouts, better jobs, and better relationships. What we often miss is that our attitude towards life influences all of these. If our attitude towards life is all about our thinking.
I believe the systems we apply to our thinking help us channel our emotional states into something positive. For most, our emotional states get the better of us. How often do we make commitments we don't have time for? How often does our anger lead us to say things we regret later?
For me, it's been often. That's why I try and apply systems to my thinking. So far, it's worked wonders for my mental state, my attitude, and my life in general. I hope this starts you on the path to applying mental models for yourself.
Thanks for reading.