The world’s greatest thinkers, problem-solvers and decision-makers consistently rely on a set of principles, shortcuts, frameworks and smart tools to cut through complexity, difficult decisions and life-changing obstacles. These are a few of my thinking principles.
I use them to improve and upgrade my intellectual life. All of them will help you think better, and I hope they inspire your own intellectual curiosity. Each thinking model offers a different framework that you can use to look at life.
1. Circle of competence —If you want to improve your odds of success in life and business, define the limits of your knowledge. Be clear about what you know and don’t know. And work to expand that circle but never fool yourself about where it stands today.
2. The mere-exposure effect — Our tendency to develop a preference for something merely due to being familiar with it. The more you see or hear something, the more you like it. It is also called the familiarity principle. Be mindful of how you spend your attention.
3. Thought experiment — All practical knowledge arises from thought. They are structural, conscious, logical, and objective deductions we do in our heads to test our ideas, concepts and clarify our thinking.
4. Occam’s razor — The simplest solution is almost always the best. Explain things with the fewest moving parts. Focus on clarity. If you have two equally likely solutions to a problem, choose the simplest.
5. The ostrich effect — The tendency to avoid opposing information to what one desperately wants to be right. People often avoid or ignore important information when they feel overwhelmed, stressed or worried.
6. Second-order thinking — The process of considering the intended and unintended implications of our decisions. Or the ability to think through problems to the second, third, and nth order.
7. Compounding — Regularly investing small amounts of money, time and energy pays off massively in the long-term. It doesn’t just apply to money. The same principle can be applied to habits, relationships, ideas and expertise. Don’t overlook small investments of time or money.
8. Eisenhower decision matrix — Separate your tasks into important and urgent columns. Some things are important and urgent, others are urgent but not important, some are not important but urgent, and others are neither important nor urgent. Knowing the difference can help you get the right things done at the right time.
9. Pareto effect — This rule suggests that 20 percent of your activities will account for 80 percent of your results. 80% of your output is usually created by 20% of your input. Invest your time wisely.
10. Regret minimisation framework — Looking back on life, you want to minimise the number of regrets you have. So projecting yourself into your future self and looking back on your current actions can help you make better choices than can benefit you when you are older.
11. Inversion —Thinking forward and backwards. Occasionally drive your brain in reverse to consider the opposite side of things. How could you sabotage your health, productivity, relationship or finances? Inversion allows you to step outside your normal patterns of thought and helps you avoid making mistakes and bad choices.
12. Hock principle — Simple, clear purpose and principles give rise to complex and intelligent behaviour. Complex rules and regulations give rise to simple and stupid behaviour.
13. Emotional contagion — Empathy acts in transferring emotions from some individuals to others through observation. Happiness and misery love company.
14. Thinking grey — Don’t see the world in black and white; see the grey in between. Make life-changing decisions carefully. It’s reasonable to buy time to think, gather information and to go beyond your immediate thoughts around the good, bad, true, false, objective and intuitive options.
15. Self-handicapping — The tendency to resist putting in an effort to do something because of a worry that failing might put a dent in one’s self-esteem.
16. First-principles thinking —The practice of actively questioning every assumption you think you ‘know’ about something — and then creating new knowledge and solutions from scratch. Almost like starting with a blank slate.
17. Planning fallacy — Tasks often take longer than expected. It’s an effect of optimism bias and it describes not only the underestimation of time but also of costs and risks.
18. Sunk cost fallacy — Invested resources — time, money and effort — that you cannot recover. People commit the sunk cost fallacy when they continue a behaviour or endeavour as a result of previously invested resources (time, money or effort).
19. Triangulation — The gathering and confirming information from more than one source before making a decision. It gives you a better perspective and helps you eliminate bias by not relying on one source.
20. Probabilistic thinking — The ability to predict the possibility that an event may or may not to occur. By learning how to differentiate possibility and probability, you get to tackle problems with a mathematical approach by measuring the stakes of each choice with its probability.
In an increasingly challenging world, thinking tools can be extremely useful to help you think fast and make better decisions. If you develop a bigger toolbox of thinking tools, you’ll improve your ability to make smarter and better decisions because you’ll have more options for getting to the right answer.