Mental Models

One of the benefits of studying philosophy is that instead of trying to provide you with a single hard skill like accounting, it gives you ways of interpreting and understanding the world that can apply to anything else you do in life.

As you’re developing your mind, these systems of interpretation, or mental models, are infinitely more valuable than specific facts. There are many people who are smart on paper, able to regurgitate facts and get high test scores, but then who are hard to call “intelligent” since they lack the systems to learn new things, make effective decisions, and control of their lives.

Most importantly, good mental models let you reason from first principles instead of blindly following the “wisdom” of crowds.

For my own benefit, as well as yours, I’ve decided to start cataloging the ones I find useful. Some are ones that I’ve found, some are ones I came up with, but all are focused on both of us being able to live our lives more effectively by improving our mental operating system.

  1. Decision Making
  2. Finance
  3. Heuristics and Biases
  4. Learning
  5. Philosophy
  6. Productivity
  7. Psychology
  8. Statistics
  9. Work
  10. Other

Decision Making

Cook vs. Chef. Any time that you’re choosing to do something, consider if you’re doing it because someone else said you should do it that way (cook), or because you did your own research and decided it made the most sense to do it this way (chef).

40-70 Rule. When you’re making a decision, you should collect at least 40% of the information available, but never more than 70%. 40% makes sure you have enough baseline to make a good choice, but over 70% and you get into the tail end optimizations where you waste time and give in to infomania.

Paradox of Choice. You’ll be happier by considering fewer options, since you won’t compare to the other things you could have had (part of why the 40-70 rule helps).

Opportunity Cost. The value of the best alternative that you don’t choose. If you can only use your resources on one thing, the opportunity cost is what you don’t use it on. A $1,000 vacation might sound nice, but your opportunity cost is taking 10 $100 vacations.

Local and Global Maxima. Checking if you’re over optimizing something that has a limited ultimate potential, versus shifting focus to something with a higher ultimate potential. You could be fast at using a typewriter, but it’d be better to focus on learning to use a computer.

Forest Fires. Making sure you’re not putting out tons of small problems that could lead to a much larger one later. Allowing small bad things to happen so you can focus on the big good things.

Finance

Runway. For the self-employed, the amount of time you have left before you run out of money. Varies based on your burn rate (the amount you spend monthly), and your active and passive income.

Savable Income. The amount of money you truly keep, after taxes, burn rate, and other expenses. Explains how you can be significantly richer while making less money through geoarbitrage and other means.

Geoarbitrage. Using cities with a low cost of living to extend your runway. Good for working for yourself in the beginning when your runway is limited, and a core principle for being a digital nomad.

Heuristics and Biases

Confirmation Bias. The tendency to look for information that supports our existing belief, or be more likely to believe in information we already agree with, instead of information that challenges it or gives us the complete picture. To fight it, work to get contrary viewpoints and recognize when you’re looking for support instead of data.

Availability Heuristic. Our tendency to place more emphasis on things that are easily recalled, and believe that what’s easily recalled is more important. We think the world is more dangerous because there’s more reporting on violence.

Narrative Fallacy. We tend to make up stories to explain facts and pieces of history that happened in a more random succession than we remember. We assume there’s a story when there isn’t since humans communicate better through stories, then criticize ourselves for not thinking forward with a story.

Black Swan Theory. We focus on the small risks to a system, and ignore the massive lurking ones, usually because they haven’t happened yet (housing crash, getting fired). We believe things are much safer and less risky or uncertain than they truly are.

Illusory CorrelationSeeing a relationship between two variables when no such relationship exists. Murder and ice cream sales both go up in the summer, but that doesn’t mean murder and ice cream sales are related.

Hindsight BiasThe tendency after an event has passed to look back on it as having been significantly more predictable than it was, or even thinking you did predict it.

Dunning-Kruger Effect. When you’re starting out at a skill, you’ll think you’re significantly more skilled than you are, and you’ll see the skill as simpler than it is. Also, the flipside, highly skilled people may underestimate their competence.

Naive RealismWe believe that we see the world objectively and reasonably, and people who disagree with us must be crazy / irrational / biased / etc. If you’re ever wondering something like “how could someone smart support Trump, abortion, healthcare, etc.” then you’re falling victim to this bias.

Impact BiasWe overestimate the intensity and duration of future negative and positive emotions. We think we’ll be happier for longer about getting something, and sadder for longer about losing something when we tend to revert to our normal emotional state very quickly.

Sunk Cost Fallacy. The sunk cost fallacy makes us believe that since we spent money or time on something, we should continue to do so, even when we’d get a better outcome by ignoring that investment. It’s why we overinvest in projects, stay in relationships too long, stick with jobs we hate, and more bad stuff.

Fundamental Attribution Error. The tendency to explain other’s behavior as a result of internal characteristics, rather than external factors. “They’re a bad driver,” vs “They were just momentarily distracted.”

Survivorship Bias. The error of focusing on what survives a process, rather than all of its initial inputs. Most startups fail, but we focus on the ones who succeed. Most college dropouts don’t do well, but we focus on the ones who do.

Learning

Deliberate Practice. While many people believe in talent or natural skill, deliberate practice is the key defining habit of expert performers. It requires methodically pushing your limits in a skill, getting feedback, and breaking a skill to it’s composite parts to make macro improvements (see Peak, Deep Work).

Beginner’s Mind (Shoshin). The mindset of a beginner learning anything is one of openness, no ego, and eagerness. If you can maintain this beginner’s mind while learning, you avoid setbacks caused by thinking you know everything, or by thinking you have something to prove.

Scientific Method / Lean. Creating and testing hypotheses quickly to arrive at a robust conclusion. Not assuming your first idea will be the right one, being methodical in seeing what works and what doesn’t. Or, from Lean, “build, measure, learn.”

Philosophy

Antifragility. Systems that can respond positively to stressors, like the human body getting stronger from lifting weights, or markets getting stronger from companies dying. Developing antifragility in your life allows you to respond positively to change, and prevents huge loss from sudden negative events. Key distinction to the fragile that responds negatively to stress by breaking or getting weaker.

Stoicism. Focus only on the things you can control, and accept the things that you cannot. Development of self-control and rational thinking protect you from misfortune and destructive emotions, not becoming upset or emotionally damaged by anything outside of your control. Self-improvement and control as the core goal of life.

Productivity

Efficiency vs. Effectiveness. Just because you can do it fast or well, doesn’t mean it’s worth doing. What’s more important is being effective by working on the right things, not over optimizing processes that shouldn’t be done in the first place.

80/20 Principle (or Pareto Principle)In non-linear systems, there will be a disproportionate output from key inputs. Common numbers used are “80% of your outputs will come from 20% of your inputs,” but this is an estimate. 20% of your time produces 80% of your best work, 20% of your exercise produces 80% of your strength gains, etc.

Productiva Negativa. The key to creating more is doing less. Not trying to use tons of apps and tools and products and systems, but instead creating space for the creative juices to flow, and recognizing that all the little tasks are usually a form of fauxductivity.

Fauxductivity. Any task that makes us feel productive, but doesn’t move the needle on our most important work. Things like email, chat, analytics, etc. should be minimized to maximize time you have for your more important work.

Parkinson’s LawThe demand on a resource will expand to fit the supply of it. The more time you give yourself to do something, the longer it will take. The more money available, the more you’ll spend. The more space to fill, the more you’ll buy. By constraining your supply, you’ll be more efficient with your resources.

Deep Work. Deliberate focused work on one thing for an extended period, preventing yourself from being interrupted or distracted. Key component for creative output and deliberate practice.

Shallow Work. The bane of deep work, any task that you could teach someone else to do fairly quickly, or that isn’t your big creative work, or that’s a form of fauxductivity. A big part of increasing deep work is reducing your shallow work.

InfomaniaWe bias towards collecting more information instead of taking action, usually as a result of how we were trained to learn in school. Instead, we should recognize that most of our research is a waste of time, and get to work, pulling info as we need it.

Short Term Overestimation, Long Term Underestimation. Most people overestimate what they can do in a short period (a day, week, year), but underestimate what they can do in a long period (month, year, 10 years).

Paired Metrics. Instead of just tracking one metric, track a metric and it’s opposite complement to prevent the negative effects of overoptimizing one metric. E.g. track pageviews and conversion %, to make sure they aren’t shitty pageviews.

Psychology

Imagined Scarcity. For domains that we’re new to, we believe everything within it is rarer than it truly is simply because we haven’t been in the domain long enough to see the surplus of options. This is why people overvalue their first relationship, first startup idea, first article, first job.

Operating System vs. Apps. Your mental operating system allows you to do everything better, your apps or skills allow you to do one thing better. Most people focus on improving a certain app, but it’s better to focus on improving the operating system underlying all of it. If you can think, learn, adapt, reason, and do other operating level processes better, you get better at everything.

Subconscious SabotageThe tendency of other people who are jealous of your goals and aspirations to bring you down so they feel better about themselves. People telling you some idea won’t work, that you won’t lose weight, that you can’t quit drinking, say it because they want you to fail since if you succeed, they feel worse about their failure to accomplish the same thing. They want to keep you at their level.

Growth vs Fixed Mindset. Whether you believe yourself to be fixed as you are (skill, intelligence, willpower, etc.) or see everything as being improvable and changeable. The latter (growth mindset) leads to significantly more success and mastery. See “You’re Not Stuck That Way.”

Decision Fatigue. There’s a limit to your decision-making power (and willpower), and the more you use it the more of it that you deplete. It’s like a muscle, it gets tired, so if you make tons of decisions and use tons of willpower on little things throughout the day, you won’t have it for the big things when you need it most.

Habit Cycle. Habits follow a predictable cycle of cue, routine, and reward. If you identify a habit you want to change (the routine), then identify its cue and reward in order to replace that routine with another routine you can use in response to the stimulus to get a similar reward.

Statistics

Regression to the Mean. If a variable is extreme in one measurement, it will tend towards the average in the next measurement. Explains why we perceive people to get “worse” after a big success.

Work

Luck Exposure. We attribute a lot of success to “getting lucky,” but you can increase your chances of getting lucky by increasing your exposure to luck. If you keep waiting at the train stop, one will come by eventually.

Diminishing Marginal Returns. For most kinds of work, you’ll get fewer returns for additional inputs (this is where the 80/20 rule comes from).

Power Law. A relationship between two variables where a change in one creates an exponential change in the other. Double the length of sides of a square, and the area quadruples. The inverse of diminishing marginal returns.

Checklist or Systems Thinking. Looking at work you do frequently and seeing if it can be turned into a checklist or system to make it easier to repeat in the future, or outsource. This helps reduce shallow work and make sure nothing is forgotten in the repetition.

10x Thinking. Most people pursue 10% improvements over existing ideas, but going after 10x (10,000%) improvements is significantly more lucrative, and sometimes easier since there’s less competition. Plus, even if you “fail” and only get a 3x improvement, you’ve still done much better.

Huckster Mindset. The tendency when we don’t know what to do to default to mimicry, instead of creating our own way of doing things. This is what leads to aggressive sales and marketing in perfectly competitive or hard to differentiate products.

Best Alternative to Negotiated Agreement. What will happen if you fail to reach an agreement in a negotiation. Important to know this so that you don’t get negotiated to a point that’s worse than your BATNA.

Other

Explained by Marketing. A question you can ask to determine if a recommendation habit makes sense: “could that be (primarily) explained by marketing?” The idea of “breakfast is the most important meal” can be explained by marketing, the idea of needing tons of productivity apps can be explained by marketing, the idea of SEO being complicated can be explained by marketing.