Mastering Mental Models

• Mental models are frameworks for understanding, explaining, and predicting the world.
• They are useful for decision-making and problem-solving.

Key Influences and Sources

• Shane Parrish: Author of “Clear Thinking” and “Mental Models.”
• Warren Buffett and Charlie Munger: Investors known for using mental models.
• Chris Williamson and George Mack: Discuss mental models on the “Modern Wisdom” podcast.
• Naval Ravikant: Author of “The Almanac of Naval Ravikant.”
• Annie Duke: Former poker player and author of “Thinking in Bets.”
• Nassim Nicholas Taleb: Author of “The Black Swan” and “Antifragile.”
• Others: Alex Hormozi, Rob Henderson, Dr. Richard Bandler.

25 Mental Models

1. Affective Realism
   • Our emotions influence how we perceive reality.
   • Example: Feeling “hangry” changes our interpretation of events.
2. The Law of Contrast
   • We evaluate things by comparing them to others.
   • Example: A 50% raise feels less impressive if others get 75%.
3. Doublethink
   • Holding two contradictory beliefs simultaneously.
   • Useful for seeing multiple perspectives.
4. Signal vs. Noise
   • Distinguishing useful information (signal) from background chatter (noise).
   • Example: Identifying valuable insights in a book full of filler.
5. Rational Optimism
   • Being optimistic based on evidence and data.
   • Example: Recognizing global improvements despite negative news.
6. First Principles Thinking
   • Breaking down problems to their fundamental components.
   • Example: Elon Musk’s approach to reducing battery costs for electric cars.
7. The Law of Causes and Effects
   • Multiple factors contribute to any outcome.
   • Example: Various causes of World War I.
8. Leverage
   • Using skills or resources to maximize impact.
   • Example: Coding and content creation.
9. Antifragility
   • Benefiting from stress and adversity.
   • Example: Muscles growing stronger after being broken down.
10. Zero-Based Thinking
    • Starting from scratch to rethink problems.
    • Example: Rethinking business strategies from a beginner’s perspective.
11. Forcing Functions
    • Creating conditions that force desired behaviors.
    • Example: Automatically saving a portion of income for taxes.
12. The Law of Motivational Beliefs
    • People believe what they want to believe.
    • Example: Changing minds by appealing to desires.
13. Blue Ocean Thinking
    • Finding uncontested market spaces.
    • Example: Cirque du Soleil combining circus and musical elements.
14. Reflexivity
    • Actions influence the environment, which in turn influences actions.
    • Example: Emotional states affecting decision-making.
15. Inversion
    • Considering the opposite of what you want to achieve.
    • Example: To be happy, think about what causes sadness and avoid it.
16. Agency Math
    • Calculating what you can control, influence, or can’t control.
    • Example: Focusing on controllable aspects to reduce stress.
17. Ockham’s Razor
    • The simplest solution is often the correct one.
    • Example: Simplifying complex problems to find solutions.
18. Gawdat’s Formula for Happiness
    • Happiness equals perception minus expectations.
    • Example: Managing expectations to increase happiness.
19. The Law of Reverse Effort
    • Trying too hard can make things worse.
    • Example: The harder you try to sleep, the harder it becomes.
20. Meaningful Metrics
    • Using the right metrics to measure success.
    • Example: Focusing on health metrics rather than social media likes.
21. Grit vs. Quit
    • Knowing when to persevere and when to walk away.
    • Example: Balancing passion and perseverance with practical decisions.
22. Narcissism Razor
    • People are more focused on themselves than on you.
    • Example: Realizing others are not constantly judging you.
23. Friction Reduction
    • Making desired behaviors easier and undesired behaviors harder.
    • Example: Making healthy food more accessible than junk food.
24. Emotional Blindness Triggers
    • When we feel strongly about something, we can become blinded and irrational.
    • Example: A hot topic that you have a strong take on and refuse to listen to a different perspective.
25. The Notion of Compounding
    • When you make small, consistent improvements, over time, they add up to something significantly better.
    • Example: Lift an extra couple of lbs every workout, and you’ll be lifting much bigger weights by the end of the year.