Mental Models: How to Become Unstoppable

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The most confident people in the world are the best thinkers.

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 How to Become Unstoppable

Read time: 5 minutes.

The greatest in the world aren't the most talented, they're the best thinkers.

Charlie Munger and Warren Buffet grew Berkshire Hathaway to a $700B investment empire.

Their secret: A set of mental models that helped them view and understand the world better than everyone else.

Today, I’m going to share with you 9 mental models that will sharpen your thinking and improve your decision-making skills as an entrepreneur: 

1. Alloying

Combining elements/skills & ideas creates new substances. These created substances can be stronger than the sum of their parts. 

This creates a: 1+1 = 3 scenario.

How you can apply Alloying → Integrate ideas to create strategies & combine skills to create superpowers (Example: I use visuals + writing in my content).

2. Margin of Saftey

Represents your buffer against losses and failures. You can apply it to investing, business, and life.

How you can use it → Take into account a margin of safety when making investments, setting goals, or even making promises.

3. Ambiguity Aversion

It's all about understanding the difference between risk & ambiguity: 

Risk is a situation with a known probability & potential outcomes Ambiguity is a situation with undefined probabilities and outcomes

How you can use it → Always choose risks over ambiguity (a devil you know is one that you can manage).

4. Divergent & Convergent Thinking

Convergent thinking is following steps towards one solution (what we've been taught in school). 

Divergent thinking, on the other hand, is creativity through exploring non-traditional solutions.

 How you can apply it → Use divergent thinking to stand out by experimenting with unusual solutions.

5. Law of Diminishing Returns

You can produce 100 units/hr for 40 hours. In your 41st hour, the output will drop to 80 units/hr. 

After reaching optimal capacity, your performance and results will drop.

How to utilize it → Understand your limit & don't go beyond it.

6. Multiplying by Zero

Any number multiplied by zero no matter how large equals zero. In life, a failure in one area can negate great effort in all other areas

How you can use it → Eliminate the "zeros" that can ruin you, these can be: people, activities, and risks.

7. Luck Surface Area

Let's face it, everyone wants to get lucky. 

In reality, your chances of getting lucky are determined by: Your actions toward your passion and the number of people you effectively communicate with.

How you can use it → Follow this formula to create your own luck: Luck = Passionate Action x Effective Communication.

8. The Map is Not Territory 

We have a simplified understanding of reality that we often use to judge & take action. In reality, things are more complex than they look.

How you can use it → Stay skeptical, embrace the complexity of life & stay humble.

9. First Principle Thinking

Our world is full of noise and pre-framed ideas. The first principle thinking is breaking assumptions down into basic elements and reassembling them from the ground up.

How you can use it → When faced with a Challenge, break things down to basics.

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