“Thinking is the hardest work there is, which is probably the reason why so few engage in it.” — Henry Ford
Our intellectual health is defined by how well our mental model explains reality. It’s also represented by how well we make decisions and ultimately how happy we are. This article is trying to emphasise the importance of improving our mental model to achieve the ultimate goal of healthy perceptions.
Happiness is perception about your circumstances. Circumstances are the result of decisions compounding in time. Decisions and perception are the result of your thought process. If you want happiness — no matter how you define it — you need to be intentional about improving your thought process. Circumstances and perceptions, i.e. happiness, will then follow.
A high level model of your mind
You are mostly the result of your decisions having accumulated and compounded in time. After beginning from some initial conditions and constraints you started making daily choices and ended up where you are today. Today’s circumstances and future decisions will influence the circumstances surrounding you in 10 years’ time. Notice the recursivity and the common factor: choices.
Circumstances change based on actions. Decisions and actions are the result of your thoughts and available resources. Your thought process is based on logic applied on accumulated knowledge. Knowledge is the result of constantly internalising and reprocessing experiences and new information.
In other words, we are always modelling the world around us so that more and more of what happens makes sense and more and more of what happens is in our favour.
When we make a decision, we rely on our mental model to give us the answer to every day questions: what coffee to buy, who to date, how to feel about a situation.
The mental model
Your mental model represents your identity: what ethics you have, how you speak, what opinions you have and how you react to circumstances. It holds recipes for humour, mental tricks, self defence mechanisms, politeness and conversational shortcuts.
Ultimately, all the decisions you make (when to make a joke, when and how to design a plan) are the result of your mental model. This is a broad term encapsulating things like decision making logic, emotional intelligence, values, ethics, habits etc.
It is clearly and by far the most important factor behind our happiness — it decides how we perceive and improve our circumstances. You can think of your mental model as the software running in your head, the algorithms you run by.
Our mental wealth
Our mental model is our intellectual capital, our intellectual wealth. It takes time and effort to shape it and accumulate it. That’s why we are very defensive about it and also that’s why we love our opinions and ideas.
One of the hardest ways to shape our mental model is hard core thinking
It happens when you want to achieve something and spend days and weeks thinking of a plan, frustratingly reiterating though many dead ends and possible paths forward.
It happens when you hold conflicting opinions about the world in your head at the same time. The process of trying to reconcile these opinions results in intellectual progress. The sweat and frustration spent on reconciling contradicting thoughts is eventually rewarded with an improved upgraded way of thinking about the world.
It happens by internalising new experiences and reconciling them with already held beliefs. Hard earned opinions resulted from hours spent turning over every rock. Good ideas are the result of extrapolations, lessons learned, experiences and books read.
One of the easiest ways to accumulate it is to copy from someone else
This mostly happens with children. Your mental model starts developing in your childhood. Since, as children we lacked self analysis skills and a good amount of knowledge, we absorbed what our parents offered. We basically downloaded their software.
It actually happens a lot with adults. Once adults we have the choice of going further with the same model we got from our parents or changing it. Simply put, we can keep our parents’ software or upgrade it.
If we keep going, with inertia, without changing direction, without scrutinising our model, we will pass it on to our children unchanged. A lot of people do that and it follows that some people run around with software in their head that has not been upgraded in many generations. This software is so out of sync with reality such that it’s then not difficult to explain why some people are miserable or make bad decisions.
We copy someone else’s opinion because it’s easy. It’s way, way harder to think of all the implications and causalities around complex issues. It takes education, effort and perseverance. It’s much easier to just adopt what someone else thinks and which also makes us feel good about ourselves, regardless of its truth value. It’s also much easier to not think about certain topics by holding default reactions and dismissing their importance.
When does it matter
Always. It always matters.
Some decisions are not that important and some decisions cannot be assessed only until much later. The problem with some decisions is that their result is not always immediately available so that we understand their impact.
Because of that, you should go with the default idea that all decisions matter. Choosing which decision making logic to improve should loop through all of them because they eventually accumulate, compound, interact non-linearly and end up shaping our perceptions and our circumstances. That’s another way of saying we become our decisions and we decide our happiness.
Because of that, our decision making process should be constantly improved and held to close scrutiny. Even if this is obvious, it’s very hard. And even if this is common sense, it’s not common practice.
We hold our beliefs and decision making logic dear. We love our way of thinking and we defend it. Because we have accumulated them through sweat, effort and time, we are defensive when someone or some situation is proving us wrong.
There are two tricks I found to be helpful.
Treat your opinions as hypotheses
Engineers always test their systems. One cannot assert that a system works until it’s fully tested and validated by real life situations.
It’s nowhere as obvious as finance when a decision is wrong. Hedge fund managers can make bad decisions and wipe out millions in a few days. Badly written trading algorithms can remove millions in a millisecond.
In the famous book — Market Wizards — one of the traders mentions that it’s dangerous to get attached to your opinions. If you do so you will lose millions and the way to approach the market is to view your opinions as hypotheses.
Treat your opinions as hypotheses. Do not get attached to them. Until they are confirmed by market movements, your opinions are just as valid as other candidate opinions about the same thing.
Scrutinise your mental model
There are blind spots. Some behaviours are so deeply ingrained in our thought process that they are not perceived at first notice. That’s why we need psychologists and therapists to help us dig into our brains. Every decision should be reassessed once in a while.
Ray Dalio, manager of the world’s biggest hedge fund has a six step process for improving your decision making model:
- Know your goals and run after them.
- Encounter the problems and don’t tolerate them.
- Diagnose the problems, don’t rush into solutions.
- Design a plan to eliminate the problems.
- Execute those designs.
- Start again. Check it here.
Check it here.
- Happiness is the perception of your circumstances
- Your circumstances are results of decisions accumulating in time
- Decisions are results of knowledge and thinking
- To improve your happiness you need to improve your thinking process
- Your thinking process is your intellectual capital, hard or easily gained
- Treat your thought process as an engineer, constantly test it against reality
- Treat your opinions as hypotheses, until proven right, they are not right.
Check it on Medium.