A mental model refers to a concept popularised by Charlie Munger that Farnham Street defines as a simple explanation for how something works. But to operate in the real-world, you need to have multiple mental models across the big disciplines.

Taking inspiration from Charlie and Farnham Street, I’ve created a list of my own mental models based on their lists and extended to cover my own experience and ideas. This will continually be updated and built out over time. I’m sharing as I go for my own discipline and to try be useful from right now.

Here’s Charlie describing why worldly wisdom and mental models are important for understanding the world:

What is elementary, worldly wisdom? Well, the first rule is that you can’t really know anything if you just remember isolated facts and try and bang ’em back. If the facts don’t hang together on a latticework of theory, you don’t have them in a usable form. You’ve got to have models in your head. And you’ve got to array your experience – both vicarious and direct – on this latticework of models…

What are the models? Well, the first rule is that you’ve got to have multiple models – because if you have just one or two that you’re using, the nature of human psychology is such that you’ll torture reality so that it fits your models, or at least you’ll think it does… It’s like the old saying, “To a man with only a hammer, every problem looks like a nail”…

And the models have to come from multiple disciplines – because all the wisdom in the world is not to be found in one little academic department…

And with that, here are some mental models that I hope you find useful.

Thinking

First-principles:

Second-order

Two systems

Pyschology

Emotion regulation

Stress regulation

Mindfulness

Spaced repitition

Interleaving

Economics

Scarcity

Opportunity cost

Trade offs

Demand and supply

Market failure