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A multidisciplinary approach to critical, clear & independent thinking.
A mental model is a representation of an external reality inside your head—a kind of cognitive map. The purpose of mental models is to gain and understand knowledge about the world through key multidisciplinary concepts. The closer you get your cognitive process (the way your brain approaches a problem) to reality, the better the decisions you’ll make in life.

Below are some of the featured mental models. Use dropdown to see all posts.

Costs — Opportunity, Sunk, Relevant and Marginal

Economics

Something’s cost is the payment required to obtain it. In economics, there are a variety of costs that can be assessed.

Wealth Effect

Economics

As people make more money, they tend to spend more money.

Back-up Systems & Redundancy

Engineering

Don’t put all your eggs in one basket, be prepared with another plan.

Central Limit Theorem

Statistics

When adding random variables to a formula, expect the outcome to reflect a normal distribution.

Competitive Advantage

Economics

This describes circumstances wherein one party has significantly more experience, knowledge, or resources than a competitor.

Mr. Market

Finance

Mr. Market is a metaphor that represents moody behavior of stock market fluctuation.

Economic Moat

Business

A competitive advantage a company has over its competitors to protect its market share and long-term profitability.

Circle of Competency

Business

Describes a person’s competency in an area that matches their skills and abilities.

Regression to the Mean

Statistics

What goes up must come down and what goes down must come up. Periods of above averages are followed by below averages.

Correlation and Causation

Statistics

Two things happening at the same time is correlation while one causing the other to change is causation.