How Mental Models Unlock Your Thinking
While I didn’t drop out of the program, I did stop doing homework. Instead, I invested my time researching and learning about mental models and the various ways we mislead ourselves. By showing me the world had so much more to offer, Munger opened a door that has never closed.
Mental models are a representation of how something works. We can’t keep all of the details of the world in our brains, so we use models to simplify the complex into understandable and organizable chunks. Whether we realize it or not, we then use these models every day to think, decide, and understand our world.
We use mental models every day to help us make decisions. They help us identify what information is relevant and what information is irrelevant in every situation. The better your models, the better your thinking.
1. The Map is Not the Territory
The map of reality is not reality. Even the best maps are imperfect. That’s because they are reductions of what they represent. If a map were to represent the territory with perfect fidelity, it would no longer be a reduction and thus would no longer be useful to us. A map can also be a snapshot of a point in time, representing something that no longer exists. This is important to keep in mind as we think through problems and make better decisions. Read more about The Map is Not the Territory
2. Circle of Competence
When ego and not competence drives what we undertake, we have blind spots. If you know what you understand, you know where you have the edge over others. When you are honest about where your knowledge is lacking, you know where you are vulnerable and where you can improve. Understanding your circle of competence improves decision making and outcomes. Read more about Circle of Competence
3. First Principles Thinking
First-principles thinking is one of the best ways to reverse-engineer complicated situations and unleash creative possibility. Sometimes called reasoning from first principles, it’s a tool to help clarify complicated problems by separating the underlying ideas or facts from any assumptions based on them. What remains are the essentials. If you know the first principles of something, you can build the rest of your knowledge around them to produce something new. Read more on First Principles Thinking
4. Thought Experiment
Thought experiments can be defined as “devices of the imagination used to investigate the nature of things.” Many disciplines, such as philosophy and physics, make use of thought experiments to examine what can be known. In doing so, they can open up new avenues for inquiry and exploration. Thought experiments are powerful because they help us learn from our mistakes and avoid future ones. They let us take on the impossible, evaluate the potential consequences of our actions, and re-examine history to make better decisions. They can help us both figure out what we really want, and the best way to get there. Read more on Thought Experiment
5. Second-Order Thinking
Almost everyone can anticipate the immediate results of their actions. This type of first-order thinking is easy and safe, but it’s also a way to ensure you get the same results that everyone else gets. Second-order thinking is thinking farther ahead and thinking holistically. It requires us to not only consider our actions and their immediate consequences but the subsequent effects of those actions as well. Failing to consider the second and third-order effects can unleash disaster. Read more on Second-Order Thinking
6. Probabilistic Thinking
Probabilistic thinking is essentially trying to estimate, using some tools of math and logic, the likelihood of any specific outcome coming to pass. It is one of the best tools we have to improve the accuracy of our decisions. In a world where each moment is determined by an infinitely complex set of factors, probabilistic thinking helps us identify the most likely outcomes. When we know these, our decisions can be more precise and effective. Read more on Probabilistic Thinking
Inversion is a powerful tool to improve your thinking because it helps you identify and remove obstacles to success. The root of inversion is “invert,” which means to upend or turn upside down. As a thinking tool, it means approaching a situation from the opposite end of the natural starting point. Most of us tend to think one way about a problem: forward. Inversion allows us to flip the problem around and think backward. Sometimes it’s good to start at the beginning, but it can be more useful to start at the end. Read more on Inversion
8. Occam’s Razor
Simpler explanations are more likely to be true than complicated ones. This is the essence of Occam’s Razor, a classic principle of logic and problem-solving. Instead of wasting your time trying to disprove complex scenarios, you can make decisions more confidently by basing them on the explanation that has the fewest moving parts. Read more on Occam’s Razor
9. Hanlon’s Razor
Hard to trace in its origin, Hanlon’s Razor states that we should not attribute to malice that which is more easily explained by stupidity. In a complex world, using this model helps us avoid paranoia and ideology. By not generally assuming that bad results are the fault of a bad actor, we look for options instead of missing opportunities. This model reminds us that people do make mistakes. It demands that we ask if there is another reasonable explanation for the events that have occurred. The explanation most likely to be right is the one that contains the least amount of intent. Read more on Hanlon’s Razor
 Brown, James Robert and Fehige, Yiftach, “Thought Experiments”, The Stanford Encyclopedia of Philosophy (Summer 2017 Edition), Edward N. Zalta (ed.). Retrieved from https://plato.stanford.edu/entries/thought-experiment/