My Mental Models

Better Decisions Using A Better Mental Framework

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Mental Model Summary: Creative Destruction

By Andrew McVagh, last updated May 24, 2018 Leave a Comment

Mental Model Summary: Creative Destruction

Mental Model

Creative Destruction, Progress, Innovation

Summary

Creative Destruction refers to the process where capitalistic markets result in a perpetual churn where newer and better ideas, products, processes, and organizations replace (destroy) older ones.

It is a byproduct of progress and innovation and is often used to explain how jobs or companies related to old technologies are frequently lost as jobs and companies related to new technologies are created.

The key idea is that markets are competitive and tend to reward adaptation while punishing those that fall behind. [Read more…]

Mental Model Summary: Skill Stack

By Andrew McVagh, last updated May 23, 2018 Leave a Comment

Skill Stack

Mental Model

Skill Stack, Talent Stack

Summary

A Skill Stack refers to the idea that having a wide range of complementary skills generates a multiplier effect towards success.

This is an idea I learned from Scott Adams, who calls it a Talent Stack (I prefer Skill Stack simply because, to me, Talent implies an innate ability while Skill implies something learned through hard work).

So, for each new skill you acquire, it combines with your existing skills to make you that much more marketable and/or able to create something new that people would be interested in.

It’s worth noting that, while similar, I believe that Mental Models and Skills are different things. Mental Models are filters on reality, helping you understand the truth behind what is occurring and why, while Skills are productive abilities you have acquired that you can use to perform acts to accomplish goals.

The key idea is that additional skills provide you with value exponentially (non-linearly), in an intentional Jack-of-all-Trades kind of way. [Read more…]

Mental Model Summary: Incentives

By Andrew McVagh, last updated May 23, 2018 Leave a Comment

Mental Model Summary: Incentives

Mental Model

Incentives, Rewards

Summary

Incentives is the idea that you can motivate people to do something by promising to reward them with something they desire. It is based on the idea that people do what is in their own best interest.

Charlie thinks of incentives as a type of super power, and uses it to explain why all sorts of things that have happened throughout human history, both good and bad.

They key idea is that by providing people with the proper incentives you can alter their behavior towards whatever goal you have in mind (within reason). [Read more…]

Mental Model Summary: Reason Respecting (Because Why)

By Andrew McVagh, last updated May 23, 2018 Leave a Comment

Mental Model Summary: Reason Respecting

Mental Model

Reason Respecting, Because, Why, Commander’s Intent

Summary

One of the most powerful words in the English language is the word because.

Why? Because, as humans, we have an underlying need to understand the reasons behind most things. When we know the why, we are more likely to:

  • comply with a request
  • remember something
  • complete a task successfully

The key idea is that because can be a powerful motivator or persuasion tool, for both good and bad. [Read more…]

11 Brilliant And Funny Charlie Munger Quotes (Genius Wisdom)

By Andrew McVagh, last updated August 8, 2018 Leave a Comment

Charlie Munger Quotes

Charlie Munger is best known as an investing guru, a close friend of Warren Buffett, and vice chairman of the multinational holding company Berskshire Hathaway.

He’s what we call a “self-made man”, having dropped out of high school before becoming a lawyer and achieving huge fortune and success.

​Munger is often quoted for his insight regarding investing and business, but his down-to-earth, no-nonsense attitude often lends advice that goes beyond the board room.

You might be surprised to find that Charlie can help you succeed at a lot of things in life. Check out these famous Charlie Munger quotes to see why.

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Mental Model Summaries

  • Mental Model Summary: Advantages of Scale
  • Mental Model Summary: Base Rates
  • Mental Model Summary: Checklists
  • Mental Model Summary: Creative Destruction
  • Mental Model Summary: Division of Labor
  • Mental Model Summary: Incentives
  • Mental Model Summary: Inversion
  • Mental Model Summary: Law of Small Numbers
  • Mental Model Summary: Pareto Principle
  • Mental Model Summary: Reason Respecting (Because Why)
  • Mental Model Summary: Redundancy
  • Mental Model Summary: Skill Stack
  • Mental Model Summary: Social Proof

Further Reading:

- What Are Mental Models?
- My Mental Models Checklist
- The Best Books On Mental Models
- The Charlie Munger Reading List
- Mental Model Summaries: The Complete List
- All Posts
 


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