The Every Day Rule: How I Stay Focused and On Track

Mental Models: How To Think Better — Faster

Mental mod­els emphas­ize the import­ance of view­ing prob­lems from mul­tiple per­spect­ives, recog­niz­ing per­son­al lim­it­a­tions, and under­stand­ing the often unfore­seen inter­ac­tions between dif­fer­ent factors. 

These mod­els are inspired heav­ily by the writ­ings of Charlie Munger, Vice Chairman of Berkshire Hathaway and long-time col­lab­or­at­or of Warren Buffett and many oth­ers.²It’s worth not­ing that these mod­els are not exclus­ively Charlie Munger’s inven­tions but tools he advoc­ates for effect­ive think­ing and decision-mak­ing.

Here’s a list of my favour­ite men­tal models: 

The Iron Prescription—This men­tal mod­el sug­gests that some­times, the most chal­len­ging actions or decisions yield the best long-term res­ults. Sticking to a tough workout involves push­ing through dif­fi­culties and res­ist­ance to achieve great­er rewards. It’s about dis­cip­line, per­sever­ance, and the will­ing­ness to under­take hard tasks for future gain.

The Red Queen Effect—Originating from Lewis Carroll’s “Through the Looking-Glass,” this meta­phor describes a situ­ation where one must con­tinu­ously adapt, evolve, and work to main­tain their pos­i­tion. It’s often used in the con­text of busi­nesses need­ing to innov­ate con­stantly to stay competitive.

Occam’s Razor—This prin­ciple sug­gests that the simplest explan­a­tion is usu­ally cor­rect. The one with the few­est assump­tions should be selec­ted when presen­ted with com­pet­ing hypo­theses. It’s a tool for cut­ting through com­plex­ity and focus­ing on what’s most likely true.

Hanlon’s Razor—This mod­el advises not to attrib­ute to malice what can be adequately explained by incom­pet­ence or mis­take. It’s a remind­er to look for sim­pler explan­a­tions before jump­ing to con­clu­sions about someone’s intentions.

Vaguely Right vs Precisely Wrong—This prin­ciple sug­gests it is bet­ter to be approx­im­ately cor­rect than exactly incor­rect. In many situ­ations, seek­ing pre­ci­sion can lead to errors if the under­ly­ing assump­tions or data are flawed. Sometimes, a rough estim­ate is more use­ful than a pre­cise but poten­tially mis­lead­ing figure.

Fat Pitch—Borrowed from base­ball, this concept refers to wait­ing patiently for the per­fect oppor­tun­ity — a situ­ation where the chances of suc­cess are excep­tion­ally high. It sug­gests the import­ance of patience and strik­ing when the time is right.

Chesterton’s Fence—A prin­ciple stat­ing that reforms should not be made until the reas­on­ing behind the exist­ing state of affairs is under­stood. It’s about respect­ing the wis­dom embed­ded in estab­lished prac­tices and con­ven­tions before mak­ing changes.

First-Conclusion Bias—This is the tend­ency to stick with the first con­clu­sion reached without con­sid­er­ing altern­at­ive pos­sib­il­it­ies or addi­tion­al inform­a­tion. It’s a cog­nit­ive bias that can impede crit­ic­al think­ing and thor­ough analysis.

First Principles Thinking—This approach involves break­ing down com­plex prob­lems into their most basic ele­ments and then reas­sembling them from the ground up. It’s about get­ting to the fun­da­ment­al truths of a situ­ation and build­ing your under­stand­ing from there rather than rely­ing on assump­tions or con­ven­tion­al wisdom.

The Map Is Not the Territory—This mod­el reminds us that rep­res­ent­a­tions of real­ity are not real­ity itself. Maps, mod­els, and descrip­tions are sim­pli­fic­a­tions and can­not cap­ture every aspect of the actu­al ter­rit­ory or situ­ation. It’s a cau­tion against over-rely­ing on mod­els and the­or­ies without con­sid­er­ing the nuances of real-world situ­ations. ³Silfwer, J. (2022, November 3). Walter Lippmann: Public Opinion and Perception Management. Doctor Spin | The PR Blog. https://​doc​tor​spin​.net/​w​a​l​t​e​r​-​l​i​p​p​m​a​nn/

Bell Curve—This curve is a graph­ic­al depic­tion of a nor­mal dis­tri­bu­tion, show­ing how many occur­rences fall near the mean value and few­er occur as you move away from the mean. In decision-mak­ing, it’s used to under­stand and anti­cip­ate vari­ab­il­ity and to recog­nize that while extreme cases exist, most out­comes will cluster around the average.

Compounding—Often used in the con­text of fin­ance, com­pound­ing refers to the pro­cess where the value of an invest­ment increases because the earn­ings on an invest­ment, both cap­it­al gains and interest, earn interest as time passes. This prin­ciple can be applied more broadly to under­stand how small, con­sist­ent efforts can yield sig­ni­fic­ant long-term results.

Survival of the Fittest—Borrowed from evol­u­tion­ary bio­logy, this men­tal mod­el sug­gests that only those best adap­ted to their envir­on­ment sur­vive and thrive. In a busi­ness con­text, it can refer to com­pan­ies that adapt to chan­ging mar­ket con­di­tions and are more likely to succeed.

Mr. Market—A meta­phor cre­ated by Benjamin Graham, rep­res­ent­ing the stock mar­ket’s mood swings from optim­ism to pess­im­ism. It’s used to illus­trate emo­tion­al reac­tions in the mar­ket and the import­ance of main­tain­ing objectivity.

Second-Order Thinking—This kind of think­ing goes bey­ond the imme­di­ate effects of an action to con­sider the sub­sequent effects. It’s about think­ing ahead and under­stand­ing the longer-term con­sequences of decisions bey­ond just the imme­di­ate results.

Law of Diminishing Returns—This eco­nom­ic prin­ciple states that as invest­ment in a par­tic­u­lar area increases, the rate of profit from that invest­ment, after a cer­tain point, can­not increase pro­por­tion­ally and may even decrease. It’s import­ant to under­stand when addi­tion­al invest­ment yields pro­gress­ively smal­ler returns.

Opportunity Cost—This concept refers to the poten­tial bene­fits that one misses out on when choos­ing one altern­at­ive over anoth­er. It’s the cost of the next best option fore­gone. Understanding oppor­tun­ity costs helps make informed decisions by con­sid­er­ing what you must give up when choosing.

Swiss Army Knife Approach—This concept emphas­izes the import­ance of hav­ing diverse tools (or skills). Being ver­sat­ile and adapt­able in vari­ous situ­ations is valu­able, like a Swiss Army knife. This mod­el is par­tic­u­larly use­ful for uncer­tain and volat­ile situations.

Acceleration Theory—This concept indic­ates that the win­ner mustn’t lead the race from start to fin­ish. Mathematically, delay­ing max­im­um “speed” by pro­long­ing the slower accel­er­a­tion phase cor­rectly will get you across the fin­ish line faster. ⁴Silfwer, J. (2012, October 31). The Acceleration Theory: Use Momentum To Finish First. Doctor Spin | The PR Blog. https://​doc​tor​spin​.net/​a​c​c​e​l​e​r​a​t​i​o​n​-​t​h​e​o​ry/

Manage Expectations—This concept involves set­ting real­ist­ic expect­a­tions for your­self and oth­ers. It’s about align­ing hopes and pre­dic­tions with what is achiev­able and prob­able, thus redu­cing dis­ap­point­ment and increas­ing sat­is­fac­tion. Effective expect­a­tion man­age­ment can lead to bet­ter per­son­al and pro­fes­sion­al rela­tion­ships and outcomes.

Techlash—This men­tal mod­el acknow­ledges that while tech­no­logy can provide solu­tions, it can cre­ate anti­cip­ated and unanti­cip­ated prob­lems. It’s a remind­er to approach tech­no­lo­gic­al innov­a­tions cau­tiously, con­sid­er­ing poten­tial neg­at­ive impacts along­side the benefits.

World’s Most Intelligent Question—This men­tal mod­el refers to repeatedly ask­ing “Why?” to delve deep­er into a prob­lem and under­stand its root causes. One can uncov­er lay­ers of under­stand­ing that might remain hid­den by con­tinu­ally ask­ing why some­thing happens.

Regression to the Mean—This stat­ist­ic­al prin­ciple states that extreme events are likely to be fol­lowed by more mod­er­ate ones. Over time, val­ues tend to revert to the aver­age, a concept rel­ev­ant in many areas, from sports per­form­ance to busi­ness metrics.

False Dichotomy—This logic­al fal­lacy occurs when a situ­ation is presen­ted as hav­ing only two exclus­ive and mutu­ally exhaust­ive options when oth­er pos­sib­il­it­ies exist. It over­sim­pli­fies com­plex issues into an “either/​or” choice. For instance, say­ing, “You are either with us or against us”, ignores the pos­sib­il­ity of neut­ral or altern­at­ive positions.

Inversion—Inversion involves look­ing at prob­lems back­wards or from the end goal. Instead of think­ing about how to achieve some­thing, you con­sider what would pre­vent it from hap­pen­ing. This can reveal hid­den obstacles and altern­at­ive solutions.

Psychology of Human Misjudgment—This men­tal mod­el refers to under­stand­ing the com­mon biases and errors in human think­ing. One can make more ration­al and object­ive decisions by know­ing how cog­nit­ive biases, like con­firm­a­tion bias or the anchor­ing effect, can lead to flawed reasoning.

Slow is Smooth, Smooth is Fast—Often used in mil­it­ary and tac­tic­al train­ing, this phrase encap­su­lates the idea that some­times, slow­ing down can lead to faster over­all pro­gress. The prin­ciple is that tak­ing delib­er­ate, con­sidered actions reduces mis­takes and inef­fi­cien­cies, which can lead to faster out­comes in the long run. In prac­tice, it means plan­ning, train­ing, and execut­ing with care, lead­ing to smooth­er, more effi­cient oper­a­tions that achieve object­ives faster than rushed, less thought­ful efforts. ⁵Silfwer, J. (2020, April 24). Slow is Smooth, Smooth is Fast. Doctor Spin | The PR Blog. https://​doc​tor​spin​.net/​s​l​o​w​-​i​s​-​s​m​o​o​th/

Because You Are Worth It—This men­tal mod­el focuses on self-worth and invest­ing in one­self. It sug­gests recog­niz­ing and affirm­ing one’s value is cru­cial for per­son­al growth, hap­pi­ness, and suc­cess. This can involve self-care, edu­ca­tion, or simply mak­ing choices that reflect one’s own value and potential.

Physics Envy—This term describes the desire to apply the pre­ci­sion and cer­tainty of phys­ics to fields where such exactitude is impossible, like eco­nom­ics or social sci­ences. It’s a cau­tion against over­re­li­ance on quant­it­at­ive meth­ods in areas where qual­it­at­ive aspects play a sig­ni­fic­ant role.

Easy Street Strategy—This prin­ciple sug­gests that sim­pler solu­tions are often bet­ter and more effect­ive than com­plex ones. In decision-mak­ing and prob­lem-solv­ing, seek­ing straight­for­ward, clear-cut solu­tions can often lead to bet­ter out­comes than pur­su­ing overly com­plic­ated strategies. ⁶Silfwer, J. (2021, January 27). The Easy Street PR Strategy: Keep It Simple To Win. Doctor Spin | The PR Blog. https://​doc​tor​spin​.net/​e​a​s​y​-​s​t​r​e​e​t​-​p​r​-​s​t​r​a​t​e​gy/

Scale is Key—This concept high­lights how the impact of decisions or actions can vary dra­mat­ic­ally depend­ing on their scale. What works well on a small scale might not be effect­ive or feas­ible on a lar­ger scale, and vice versa. 

Circle of Competence—This concept involves recog­niz­ing and under­stand­ing one’s own areas of expert­ise and lim­it­a­tions. The idea is to focus on areas where you have the most know­ledge and exper­i­ence rather than ven­tur­ing into fields where you lack expert­ise, thereby increas­ing the like­li­hood of success.

Fail Fast, Fail Often—By fail­ing fast, you quickly learn what does­n’t work, which helps in refin­ing your approach or pivot­ing to some­thing more prom­ising. Failing often is seen not as a series of set­backs but as a neces­sary part of the pro­cess towards suc­cess. This mind­set encour­ages exper­i­ment­a­tion, risk-tak­ing, and learn­ing from mis­takes, emphas­ising agil­ity and adaptability.

Correlation Do Not Equal Causation—This prin­ciple is a crit­ic­al remind­er in data ana­lys­is and sci­entif­ic research. Just because two vari­ables show a cor­rel­a­tion (they seem to move togeth­er or oppose each oth­er) does not mean one causes the oth­er. Other vari­ables could be at play, or it might be a coincidence. 

Critical Mass—This men­tal mod­el emphas­izes the import­ance of reach­ing a cer­tain threshold to trig­ger a sig­ni­fic­ant change, wheth­er user adop­tion, mar­ket pen­et­ra­tion, or social move­ment growth. This mod­el guides stra­tegic decisions, such as resource alloc­a­tion, mar­ket­ing strategies, and tim­ing of ini­ti­at­ives, to effect­ively reach and sur­pass this cru­cial point. ⁷Silfwer, J. (2019, March 10). Critical Mass: How Many Social Media Followers Do You Need? Doctor Spin | The PR Blog. https://​doc​tor​spin​.net/​c​r​i​t​i​c​a​l​-​m​a​s​s​-​f​o​l​l​o​w​e​rs/

Sorites Paradox—Also known as the para­dox of the heap, this para­dox arises from vague pre­dic­ates. It involves a sequence of small changes that don’t seem to make a dif­fer­ence indi­vidu­ally but, when accu­mu­lated, lead to a sig­ni­fic­ant change where the exact point of change is indis­cern­ible. For example, if you keep remov­ing grains of sand from a heap, when does it stop being a heap? Each grain does­n’t seem to make a dif­fer­ence, but even­tu­ally, you’re left with no heap.

The Power of Cycle Times—Mathematically, redu­cing cycle times in a pro­cess that grows expo­nen­tially (like con­tent shar­ing on social net­works) drastic­ally increases the growth rate, lead­ing to faster and wider dis­sem­in­a­tion of the con­tent, thereby driv­ing vir­al­ity. The com­bin­a­tion of expo­nen­tial growth, net­work effects, and feed­back loops makes cycle time a crit­ic­al factor. ⁸Let’s say the num­ber of new social media shares per cycle is a con­stant mul­ti­pli­er, m. If the cycle time is t and the total time under con­sid­er­a­tion is T, the num­ber of cycles in this time is T/​t​. … Continue read­ing ⁹Silfwer, J. (2017, February 6). Viral Loops (or How to Incentivise Social Media Sharing). Doctor Spin | the PR Blog. https://​doc​tor​spin​.net/​v​i​r​a​l​-​l​o​op/

Non-Linearity—This men­tal mod­el recog­nises that out­comes in many situ­ations are not dir­ectly pro­por­tion­al to the inputs or efforts. It sug­gests that effects can be dis­pro­por­tion­ate to their causes, either escal­at­ing rap­idly with small changes or remain­ing stag­nant des­pite sig­ni­fic­ant efforts. Understanding non-lin­ear­ity helps in recog­niz­ing and anti­cip­at­ing com­plex pat­terns in vari­ous phenomena.

Checklists—This men­tal mod­el stresses the import­ance of sys­tem­at­ic approaches to pre­vent mis­takes and over­sights. Using check­lists in com­plex or repet­it­ive tasks ensures that all neces­sary steps are fol­lowed, and noth­ing is over­looked, thereby increas­ing effi­ciency and accuracy.

Lollapalooza—Coined by Munger, this term refers to situ­ations where mul­tiple factors, tend­en­cies, or biases inter­act so that the com­bined effect is much great­er than the sum of indi­vidu­al effects. It’s a remind­er of how vari­ous ele­ments can con­verge to cre­ate sig­ni­fic­ant impacts, often unex­pec­ted or unprecedented.

Limits—This men­tal mod­el acknow­ledges that everything has bound­ar­ies or lim­its, bey­ond which there can be neg­at­ive con­sequences. Recognizing and respect­ing per­son­al, pro­fes­sion­al, and phys­ic­al lim­its is essen­tial for sus­tain­able growth and success.

The 5Ws—This men­tal mod­el refers to the prac­tice of ask­ing “Who, What, When, Where, Why” (and some­times “How”) to under­stand a situ­ation or prob­lem fully. By sys­tem­at­ic­ally address­ing these ques­tions, one can com­pre­hens­ively under­stand an issue’s con­text, causes, and poten­tial solu­tions, lead­ing to more informed decision-making.

Chauffeur Knowledge—This men­tal mod­el dis­tin­guishes between hav­ing a sur­face-level under­stand­ing (like a chauf­feur who knows the route) and deep, genu­ine know­ledge (like an expert who under­stands the intric­a­cies of a sub­ject). It warns against the illu­sion of expert­ise based on super­fi­cial know­ledge and emphas­izes the import­ance of true, deep understanding.

Make Friends with Eminent Dead—This men­tal mod­el advoc­ates learn­ing from the past, par­tic­u­larly from sig­ni­fic­ant his­tor­ic­al fig­ures and their writ­ings. One can gain valu­able insights and wis­dom by study­ing the exper­i­ences and thoughts of those who have excelled in their fields.

Seizing the Middle—This strategy involves find­ing and main­tain­ing a bal­anced, mod­er­ate pos­i­tion, espe­cially in con­flict or nego­ti­ation. It’s about avoid­ing extremes and find­ing a sus­tain­able, middle-ground solu­tion. Also, centre pos­i­tions often offer the widest range of options.

Asymmetric Warfare—This refers to con­flict between parties of unequal strength, where the weak­er party uses uncon­ven­tion­al tac­tics to exploit the vul­ner­ab­il­it­ies of the stronger oppon­ent. It’s often dis­cussed in mil­it­ary and busi­ness contexts.

Boredom Syndrome—This term refers to the human tend­ency to seek stim­u­la­tion or change when things become routine or mono­ton­ous, which can lead to unne­ces­sary changes or risks. Sometimes, tak­ing no action is bet­ter than tak­ing action, but remain­ing idle is some­times difficult.

Survivorship Bias—This cog­nit­ive bias involves focus­ing on people or things that have “sur­vived” some pro­cess and inad­vert­ently over­look­ing those that did not due to their lack of vis­ib­il­ity. This can lead to false con­clu­sions because it ignores the exper­i­ences of those who did not make it through the pro­cess. ¹⁰Silfwer, J. (2019, October 17). Survivorship Bias — Correlation Does Not Equal Causation. Doctor Spin | The PR Blog. https://​doc​tor​spin​.net/​s​u​r​v​i​v​o​r​s​h​i​p​-​b​i​as/

Each men­tal mod­el offers a unique lens for view­ing prob­lems, mak­ing decisions, and strategiz­ing, reflect­ing the com­plex­ity and diversity of thought required in vari­ous fields and situations.

In addi­tion, numer­ous oth­er men­tal mod­els are used in vari­ous fields, such as eco­nom­ics, psy­cho­logy, and sys­tems thinking.

Learn more: Mental Models: How To Think Better — And Faster

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