I’m currently re-reading The Personal MBA by Josh Kaufman. I’ve read the book years ago, but I recently felt the need to read it again. The book summarizes important principles for businesses that it calls “mental models”.
The term “mental model” was popularized by Charlie Munger, the investment partner of Warren Buffett. In short, mental models are the frameworks that you use to understand the world. Your mental model of something is your understanding of how it works. Based on that understanding, you can then make decisions.
Here is why building mental models is important:
With good mental models, you can have an accurate understanding of a situation and make the right decisions.
It’s an important thing to have, isn’t it?
But building mental models isn’t something that you can do just once and then be done with it. Instead, it’s something that you need to do continually. You need to constantly upgrade your mental models. It’s similar to developing software. Microsoft Excel, for instance, has been developed for many years now. It gets better and better over time. You should do something similar with your mental models. You should keep learning and improving your understanding of the world.
How should we build mental models then? Well, here are three tips on how to do that.
1. Find Some Role Models
When it comes to building mental models, I believe that having concrete examples is a good starting point. That’s why I recommend finding some role models. Find some people whose values and principles you admire. Then study how they think and work. These become your starting mental models that you can later adjust (see below).
The nice thing about having role models is they are concrete. These are real people doing real things in the real world. Not only can they teach you, but also they can inspire you. They show you what is possible.
You can have different role models for different areas of your life. You can also have multiple role models for an area of your life, each with different strengths.
2. Learn from Multiple Fields
In addition to finding some role models, you should learn concepts from multiple fields. Don’t limit yourself to just your current field. Instead, borrow ideas from different fields and combine them.
This is what Charlie Munger said (as quoted in The Personal MBA):
Just as multiple factors shape every system, multiple mental models from a variety of disciplines are necessary to understand that system… You have to realize the truth of biologist Julian Huxley’s idea that, “Life is just one damn relatedness after another.” So you must have all the models, and you must see the relatedness and the effects from the relatedness…
Combine the ideas you learn with what you learn from your role models. This way, you can come up with something that is yours, something that best fits your situation.
Your mental models aren’t proven until you test them in the real world. Therefore, do something in the real world to test them. Do side projects, meet new people, launch a product. Then, based on the feedback, you can adjust your mental models as necessary.
Having the experiment mindset is helpful here because it will give you the eagerness to try new things and learn from them.
Building mental models can help you live a fulfilling life because it enables you to make good decisions. By finding some role models, learning from multiple fields, and experimenting, you will be able to build good mental models.
What do you think? Feel free to share your thoughts in the comments!
Almost like a CANEI = CONSTANT AND NEVER ENDING IMPROVEMENT principle*
I’ve never heard of CANEI before. Thanks for sharing, Moses!
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