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Series Post #6: Making High Quality Decisions What are Core Mental Models (con't) #6-7 6. Probabilistic Thinking: This is trying to estimate, using math and logic, the likelihood of any specific outcome happening. Identifying the most likely outcomes is one of the best tools available to improve the quality of our decisions. 7. Inversion: Most [...]

Series post #5: Making High-Quality Decisions What are Core Mental Models; #3-5; continued: 3. First Principles Thinking: Separate the underlying ideas or facts from any assumptions based on them. Once you get down to the essential idea or facts, you can build to produce something new. Elon Musk explains it like this: boil things down [...]

Series Post #5: Making High-Quality Decisions Charlie Munger, billionaire investor and vice chairman of Berkshire Hathaway, once summed up his approach to wisdom using mental models. He stressed the importance of having models in your head, and then filtering your experiences through that network of mental models to arrive at better decisions. So, what are [...]

Those who make consistent, high-quality decisions also use mental models. A mental model is simply a way of thinking that helps us process what goes on around us. They’re the routines our brain uses to simplify the outside world. We all have them, and we all use them.