Newsletter #13: Magic mental models
Alliteration is the conspicuous repetition of initial consonant sounds of nearby words in a phrase, often used as a literary device — Wikipedia
Mental models help to abstract concepts in an easy-to-remember way. I find them useful to recollect concepts quickly. In this post, I will share a few which I find the most useful.
Compounding
We are all too familiar with the exponential curve, primarily due to the pandemic. However, it is easy to forget the effects of compounding. Simply put, it means small consistent investments over a long period, resulting in exponential (a.k.a seemingly impossible) returns in the future.
Albeit this definition immediately makes us think of money, it is more crucial to remember and apply this in other areas of life such as exercise, learning, etc.
15 mins of reading every day for 20 years can help you to learn almost anything.
30 mins of exercise every day for 20 years can make you and more importantly, keep you, fit and healthy.
Maslow’s hierarchy of needs
Although this is a concept in psychology and not a mental model, we often forget this basic guiding principle. As shown in the diagram below, this concept posits that there is a natural order to what every one of us wants to achieve. It is important to know this for two reasons,
One, be grateful for all the steps you have already climbed.
Second, while judging someone else’s decisions, see if this provides a guiding principle as to what is driving their choices.
If you identify with the statement “Money doesn’t solve all of your problems.”, consider yourself lucky because money has already solved all the problems it can for you.
Inversion
We all know the famous Charlie Munger quote, “All I want to know is where I’m going to die, so I’ll never go there.”. The Inversion model suggests finding the solution by avoiding all possible ways to fail.
Stoics used this to imagine the worst-case scenarios in all situations. This helped them not only to prepare for the worst case but also to strengthen their plan to avoid them.
For example, if you are a leader, instead of asking how can I make the best decision in this situation, ask what will a bad manager do in this situation. Then don’t do it. Recursively this should help you to eliminate many, if not all the bad options.
One more example is making a ‘not-to-do’ list instead of a ‘to-do’ list.
Normal Distribution
“In statistics, a normal distribution or Gaussian distribution is a type of continuous probability distribution for a real-valued random variable.” (source)
🤮 I know.
But the graphical representation of this is a curve we are familiar with, but forget when analyzing averages vs extreme cases.
When we hear about “dropouts” such as Bill Gates and Mark Zuckerberg making it big, and people starting to shit on college, it is all too easy to jump on the bandwagon. However, we must consider the “average case” of the college dropout which is likely in the center of the curve and nowhere near as fascinating as the extreme case.
Another example of people being aware of this fact can be seen in the advice given by the famous and successful cricketer Hardik Pandya in an interview, “ I never advise children to choose cricket over studies “. This is a piece of good advice because on average, a person who tries to get into the Indian Cricket Team, won’t make it. Only those with exceptional abilities, good discipline, and a bit of luck will make it.
The reason it is important to be conscious of this concept is that averages are never famous so you will never hear or read about them. And when coupled with availability bias, this becomes a deadly combination and can result in evaluating the advices such as “College is not necessary” as good.
That’s it for this issue. I hope you found this article interesting. Until next time!
An article I found interesting: An explainer on how ants aid the environment
A podcast I found interesting: Lex Fridman: Balaji Srinivasan
Originally published at https://prathmesh6.substack.com on November 3, 2022.
