Rating: 5/5

Link to Goodreads

🚀 The Book in 3 Sentences

  1. The core ideas from all fields of study contain principles that reveal how the universe works.
  2. Making better decisions comes down to understanding which models to use — simple processes that help us work through problems.
  3. By using mental models, we’re able to reduce the risk of making terrible decisions by better understanding reality.

🎨 Impressions

The book was a very quick read. Although it was written to be a reference guide to General Thinking Concepts, at least as it pertains to mental models, I thought it could go a bit deeper. The biggest question I came away with was if a framework existed for knowing exactly when to use each model. The author does prescribe a practice of keeping a log of your mental model usage as an effective feedback loop though.

Secondly, I continue to wonder how to really discover new models myself… Shane mentions a method for finding First Principles using either Socratic Questioning or The Five Whys technique, but I wanted to go deeper — I feel like I’ve been given a fish but not quite taught how.

How I Discovered It

I’ve been reading the Farnam Street blog and listening to The Knowledge Project podcast for about a year now. This was Shane’s first book on Mental Models.

Who Should Read It?

Anyone who is in a position to make important decisions or wants to eventually become that person. Additionally, someone who is quickly realizing how terrible their “gut” is at making important decisions over the long run.

☘️ How the Book Changed Me

How my life / behaviour / thoughts / ideas have changed as a result of reading the book.

  • Added a few new tools to my arsenal for making important decisions or viewing a given situation
  • Helped me to put things into perspective — mainly seeing where I truly lack (acting too confident while outside of my Circle of Competence for example)
  • Gave me a better understanding of Mental Models as a whole — what they are, how and when to use them, etc.

✍️ My Top 3 Quotes

  • Circle of Competence — “If you don’t have at least a few years and a few failures under your belt, you cannot consider yourself competent in a circle.”
  • Circle of Competence — “Learning from the experience of others is much more productive”
  • Inversion — “Instead of aiming directly for your goal, think deeply about what you want to avoid and then see what options are left over.”

📒 Summary + Notes

The key to better understanding the world is to build a latticework of mental models.

Introduction: Acquiring Wisdom

Mental Models and what they are

We humans tend to struggle when it comes to thinking rationally. Our failure to update our methods of thought come down to three major things:

  1. Not having the right perspective or vantage point
  2. Ego-induced denial
  3. Distance from the consequences of our decisions

Because we tend to ignore the all important feedback loop that is reality, we make bad decisions. As Confucius said, “A man who has committed a mistake and doesn’t correct it, is committing another mistake.” By avoiding this feedback loop we end up optimizing for short-term ego protection over long-term happiness and progress.

This is where Mental Models come into play: they allow us to find simple processes to work through problems from multiple dimensions and perspectives. The degree to which our models accurately explain reality is the degree to which they improve our thinking.

In every situation, we need to figure out which models are reliable and useful. We must also discard or update the unreliable ones, because unreliable or flawed models come with a cost: sometimes making good decisions boils down to avoiding bad ones.

The Map is Not The Territory

In other words, your perspective of reality is not reality: even the best maps are imperfect as they are reductions of what they represent. The abstraction is not the abstracted.

In order for a map or model to be as accurate as possible, we should take three important consideration into account:

  1. Reality is the ultimate update
  2. Consider the cartographer
  3. Maps can influence territories

We can use maps to guide us, but we must not let them prevent us from discovery new territory or updating our existing maps. If the aim becomes simplification rather than understanding we start to make bad decisions.

Circle of Competence

When the ego and not competence drives what we do, we operate with blind spots. A Circle of Competence is an area of true expertise, which requires at least a few years of practice and failures.

While in our Circle of Competence we are able to make decisions quickly and relatively accurately. We know what is knowable and what is unknowable and can easily distinguish between the two.

There are three key practices needed in order to build and maintain a Circle of Competence:

  1. Curiosity and a desire to learn
  2. Monitoring
  3. Feedback

While building a Circle of Competence does take time, learning from the experience of others can be a more productive use of time.

There are three parts to successfully operating outside of your Circle of Competence:

  1. Learn at least the basics of the realm you’re operating in, while acknowledging that you’re a Stranger, not a Lifer.
  2. Talk to someone whose Circle of Competence in the area is strong.
  3. Use a broad understanding of the basic mental models of the world to augment your limited understanding of the field in which you find yourself a Stranger.

In any given situation, there are people who have a circle, who have put in the time and effort to really understand the information — lean on those people. “Ignorance more often begets confidence than knowledge.” — Charles Darwin.

First Principles Thinking

If you know the first principles of something, you can build the rest of your knowledge around them to produce something new. The idea is to reduce something down to its most basic piece of truth, then building your knowledge from there, rather than arguing from analogy.

The real power of first principles thinking is moving away from random change and into choices that have a real possibility of success. To improve something, we need to understand why it is successful or not. Otherwise, we are just copying thoughts or behaviors without understanding why they worked.

If we want to identify the principles in a situation to cut through the dogma and the shared belief, there are two techniques we can use:

  1. Socratic Questioning
  2. The Five Whys

As Harrington Emerson said, “As to methods, there may be a million and then some, but principles are few. The man who grasps principles can successfully select his own methods. The man who tries methods, ignoring principles, is sure to have trouble.”

Thought Experiment

A Thought Experiment is a method by which you can test ideas without the risks.

A Thought Experiment generally has the following steps:

  1. Ask a question
  2. Conduct background research
  3. Construct hypothesis
  4. Test with a (thought) experiment
  5. Analyze outcomes and draw conclusions
  6. Compare to hypothesis and adjust accordingly (new questions, ect.)

What is not obvious is that the gap between what is necessary to succeed and what is sufficient is often luck, chance, or some other factor beyond your direct control.

Second-Order Thinking

Second-order thinking is thinking farther ahead and thinking holistically. While the first-order consequence of something can be immediate, the second-order is what happens because the first-order happened — following the chain of events.

There are two areas where second-order thinking can be useful:

  1. Prioritizing long-term interests over immediate gains.
  2. Constructing effective arguements.

A little time spent thinking ahead can save us massive amounts of time later.

Probabilistic Thinking

Probabilistic Thinking is essentially trying to estimate, using some tools of math and logic, the likelihood of any specific outcome coming to pass. Successfully thinking in shades of probability means roughly identifying what matters, coming up with a sense of the odds, doing a check on our assumptions, and then making a decision.


As a thinking tool it means approaching a situation from the opposite end of the natural starting point. Combining the ability to think forward and backward allows you to see reality from multiple angles. As an example, instead of aiming directly for your goal, thinking deeply about what you want to avoid and then see what options are left over.

Here’s a process for applying inversion:

  1. Identify the problem
  2. Define your objective
  3. Identify the forces that support change towards your objective
  4. Identify the forces that impede change towards the objective
  5. Strategize a solution

Think about not only what you could do to solve a problem, but what you could do to make it worse — and then avoid doing that, or eliminate the conditions that perpetuate it.

Occams’s Razor

Simpler explanations are more likely to be true than complicated ones.

Occam’s Razor is a great tool for avoiding unnecessary complexity by helping you identify and commit to the simplest explanation possible. Simplicity can increase efficiency. Focusing on simplicity when all others are focused on complexity is a hallmark of genius, and it’s easier said than done.

Hanlon’s Razor

Never attribute to malice that which is more easily explained by stupidity. Failing to prioritize stupidity over malice causes things like paranoia. Hanlon’s Razor, when practiced diligently as a counter to confirmation bias, empowers us, and gives us far more realistic and effective options for remedying bad situations. It’s harder to take advantage of, or even see, opportunities while in this defensive mode because our priority is saving ourselves.