Everything begins in the mind. Our thoughts, perspectives, and mental models shape how we perceive the world, make decisions, and take action.
I started thinking about the concept of "mental models" after reading The Almanack of Naval Ravikant and Clear Thinking by Shane Parrish, both inspired by Charlie Munger. He explained the idea in a well-known 1994 speech at USC:
You can't really know anything if you just remember isolated facts... 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.
Munger believed that about 80 or 90 important models carry most of the weight in clear thinking.
The first rule is that you've got to have multiple models, because if you just have 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 the man with only a hammer, every problem looks like a nail." [...] That's a perfectly disastrous way to think and a perfectly disastrous way to operate in the world.
Since that moment, I began to imagine myself as an architect, a constructor, an engineer, a carpenter, a bricklayer, and so on. These are different roles, all with the goal of building a structure in my mind where I can organize, adjust, redefine, and revisit the mental models that suit me and guide me through life in any situation.
General mental models are the foundation of this building. They are general representations of the world that people have worked on and thought about over years and centuries. They are not absolute truths to follow, but they are instruments to build your specific mental model that is suited only for you, that takes into account your life, your personality, your experience and the world around you.
Although it's difficult and requires lifelong work, I think it is worthwhile. It is also relaxing and fun, and it is comforting and powerful to think that we are solely responsible for building this structure in our mind with commitment and patience, and for steering our lives.
One of my hobbies is seeking out and discovering these mental models, both general ones and specific ones for every area of my life and the areas that interest me.
Shane Parrish's books are a starting point. He interpreted this approach greatly: Clear Thinking (2024) and the four volumes of The Great Mental Models series (Volume 1: General Thinking Concepts; Volume 2: Physics, Chemistry, and Biology; Volume 3: Systems and Mathematics; Volume 4: Economics and Art, co-authored with Rhiannon Beaubien.
Of course, there are many more, and there are variations, and as our world and society evolve, new general and specific mental models emerge and need to be discovered.
I will mention here some of my favorites:
First, Second, and Third-Order Thinking
When making decisions, most people stop at the first question: what happens if I do X? First-order thinking is fast and intuitive. It gives you the immediate outcome. But it often misses what comes next, the ripple effects, the unintended consequences, the chain of events that unfolds over time.
Higher-order thinking pushes you to look beyond the obvious. Second-order asks: what happens after that? Third-order asks: and then what? Each layer reveals new possibilities, risks, and opportunities that the previous level overlooks.
First-Order Thinking
First-order thinking asks: what happens if I do X? It focuses on the direct, immediate result. It's the default mode for most decisions, quick, surface-level, and often sufficient for trivial choices. But for anything that matters, it's incomplete.
Second-Order Thinking
Second-order thinking extends the question: and then what? What happens after the immediate effect? What are the consequences of those consequences? It looks one step beyond first order. A promotion increases income, but what does that lead to? More stress? Less time for family? Different priorities?
Third-Order Thinking
Third-order thinking goes one level deeper: what happens after that? What are the consequences of the consequences of the consequences? If the promotion leads to more stress, what does more stress lead to? Burnout? Health issues? Relationship strain? And what does that lead to? Third-order thinking traces the chain further, surfacing effects that second-order thinking still misses.
The difference is depth. First-order sees the first domino. Second-order sees the next few. Third-order sees the chain.
Why It Matters
Decisions that look good at first order often backfire at second or third order. A promotion that increases income but destroys work-life balance. A shortcut that saves time now but creates technical debt later, and that debt, in turn, slows down every future project. A relationship choice that feels right today but limits growth tomorrow. First-order thinking optimizes for the immediate; second and third-order thinking optimize for the long run.
Combining higher-order thinking with probabilistic reasoning is especially powerful. You not only ask what comes next, but how likely each outcome is. You weigh options by their downstream effects, not just their immediate payoff. This helps you anticipate ripple effects and make decisions that hold up over time.
How to Practice It
When facing a decision, ask not just what the immediate effects will be, but what the consequences of those consequences will be, and what comes after that. Make it a habit:
- State the decision and the obvious first-order outcome.
- Ask "and then what?": what happens next? (second order)
- Ask again: and then what? (third order)
- Look for reversals: where does the "good" outcome turn bad? Where does the "bad" outcome create unexpected upside?
This doesn't require hours of analysis. A few minutes of deliberate higher-order reflection can surface risks and opportunities that would otherwise remain invisible. The goal is not to eliminate uncertainty; that is impossible. The point is to see more of the board before you move.
When to Use It
Use second and third-order thinking when the stakes are high: career moves, relationships, health choices, financial decisions, major projects. For low-stakes, reversible decisions, first-order thinking is often enough. The key is recognizing which decisions deserve the extra depth, and how many levels deep to go.
The mind that asks "and then what?" again and again sees further. It makes fewer decisions it later regrets. It builds a habit of thinking in time, not just about today, but about the chain of tomorrows that today's choices create.
Bayesian Thinking and Probabilistic Reasoning
One of the mental models I want to experiment with more combines the Bayesian principle with probabilistic thinking, and layers it with first, second, and third-order thinking, as in the section above.
Bayesian thinking means updating your beliefs as new evidence arrives. You start with a prior, then revise it when you learn something new. Instead of holding fixed opinions, you treat beliefs as probabilities that shift with information. This keeps you flexible and reduces the risk of clinging to wrong assumptions.
Probabilistic thinking extends this: you reason in terms of likelihoods rather than certainties. You ask "how likely is this?" instead of "is this true or false?" The world rarely offers binary answers. Thinking in probabilities helps you weigh options, handle uncertainty, and avoid overconfidence.
First, second, and third-order thinking add depth to that stack: you not only update beliefs and reason in probabilities, you also trace consequences beyond the first effect. Together, probabilistic reasoning and higher-order thinking help you anticipate ripple effects and make decisions that hold up over time.
Together, these form a model I want to practice more: start with priors, update with evidence, reason in probabilities, and always ask what comes next.
The Power of Compound Interest
Compound interest is a mental model that extends far beyond finance. Small, consistent actions accumulate over time and produce results that seem disproportionate to the effort invested. The key is that each gain builds on the previous one: skills improve skills, knowledge unlocks more knowledge, relationships deepen relationships.
Patience is the companion to compound interest. Without it, you abandon the process before the curve steepens. Early on, progress feels slow. The returns are invisible. This is when most people quit. Patience means trusting the process even when the payoff is not yet visible, and choosing actions that compound rather than actions that feel urgent but lead nowhere.
Apply this to skills, health, relationships, wealth, or any domain where growth happens gradually. The same principle holds: small, repeated efforts, sustained over time, create outcomes that linear thinking cannot predict. Patience is not passive waiting. It is the active choice to keep investing in what compounds.
When You're Stuck
A useful mental model for getting unstuck: stop thinking and start acting. When you're blocked, the worst move is to stay in your head. Concrete actions break the loop:
- Move your body. Walk, stretch, change rooms. Physical movement shifts mental state.
- Write it down. Put the problem on paper. Externalizing reduces the load on working memory and often reveals the next step.
- Do the smallest possible thing. One tiny action: open the file, write one sentence, make one call. Momentum builds from the first move.
- Switch context. Work on something else for 15 minutes, then return. A fresh look often clears the block.
The Fallback Strategy
The solution is to build a fallback system. There should always be at least one activity from your list that you can fall back on when you are not sure what to do next.
The ideal is to always know what to do. When motivation is low, when you are between priorities, or when you need a change of pace, your fallback gives you a clear next step.
Reading as a valuable fallback
Reading is an excellent fallback activity. It provides value even when you are not actively developing a specific skill. To make this work, maintain a curated list of readings ready to fall back on. When you are not sure what to do, you can pick up a book or article from that list.
This keeps you moving forward, even when you are not pushing hard on a particular skill. More on how this fits into a broader system in Take action: what to do.
There Is Always a Solution
Assume that for any problem, a solution exists. You may not see it yet, but that does not mean it is not there. This mindset shifts you from "it's impossible" to "I haven't found it yet." It keeps you searching instead of giving up. The solution might be a workaround, a different approach, or a reframing of the problem. Believing it exists is the first step to finding it.