Mental Models 101 - How To Make Better Decisions - George MacGill - #069

**Chris Williamson** (0:00)
What is happening, friends? Welcome to the Modern Wisdom Podcast. And today's guest is someone I've been looking forward to sitting down with for quite a while. This actually marks the beginning of a series of three episodes I recorded at Social Chain's headquarters in Manchester. You will notice a fantastic uplift in audio and video quality if you head to the YouTube channel. I had serious podcast studio envy. So that may be where the next investment goes after seeing how beautiful theirs was. But on to today's episode with George MacGill, we're talking all things mental models. This is a branch of learning which has emerged from the back of Charlie Munger, Warren Buffett's business partner, and been popularized by guys like Shane Parrish from fs.blog. And as humble as he is, George has a fantastic understanding of this entire subject area. They are general thinking concepts. So a lattice work of approaches which you can layer on top of each other, which help you to think. No one teaches us how to think. We just presume that it emerges naturally. But you can take the best principles and insights from different industries and actually create models of how to think from them. So yeah, I absolutely loved this episode. I found it super useful for me. And I'm certain that you will as well. Please welcome George MacGill.
George MacGill, Social Chain has joined me. How are you?

**George MacGill** (1:54)
I'm not too bad, how are you?

**Chris Williamson** (1:55)
Very good, thank you. George Mac on Instagram.

**George MacGill** (1:58)
Twitter, no, no, no.

**Chris Williamson** (1:59)
Twitter, still not transferred across on Instagram.

**George MacGill** (2:03)
No, no, no, need to.

**Chris Williamson** (2:04)
I like it. So what are we talking about today, George?

**George MacGill** (2:07)
So I guess it's more like a theme of what we've been chatting about for the last six to nine months, right?
Which is like mental models and how you sort of interpret that is like up to you. I particularly got it from like Charlie Munger, like Naval Ravikant, a few other thinkers about like almost like recipes for like regular decision making. If you can imagine like your consciousness is like a like the OS like mental models are just various sort of apps that you like plug in for like various decisions or situations that you find yourself in. And it's almost like this, I think Charlie Munger calls it like a lattice work from all the big like disciplines, whether that's like physics, whether that's business, whether that's microeconomics, because what a lot of people do will just specialize and go, okay, I learned biology, and then that's all I do. And they just go deep on that subject. Whereas the whole like Tim Ferrish strategy of taking the 10% that covers 90% of it from biology, like whether it's like evolution, whether it's homeostasis, and then going into like microeconomics and looking at like game theory, like race to the bottom. Taking all these strategies and then almost trying to apply them instead of having to deal with like the overwhelm of everyday life. That's how I sort of interpret it. But then I, now it's much looser and just anything where it's like an analogy that helps me like explain things is really, really useful.

**Chris Williamson** (3:30)
Totally. So you introduced me to Mental Models when I first came in here actually to do the podcast with the guys from Social Minds. And we sat down and you took me through it and it was the first time that I'd heard of it. Charlie Munger appears to be kind of like, should we say who Charlie is? Patient zero for it.

**George MacGill** (3:49)
So Charlie is less known but he is Warren Buffett's business partner who obviously the guy who runs Berkshire Hathaway.

**Chris Williamson** (3:58)
Fourth richest man in the world.

**George MacGill** (4:00)
Yeah, fourth official richest man in the world. There's a lot of unofficial people out there.

**Chris Williamson** (4:04)
Some narco that's like one to 25

**George MacGill** (4:09)
So yeah, he's Warren Buffett's business partner and he's sort of been obsessed for his career of taking these ideas from the big disciplines. That's where I originally got it from. So my favorite one from Charlie was just Inversion, which was like, this is quite a nice introduction. This is probably the most simple one.

**Chris Williamson** (4:25)
This is an example of a mental model.

**George MacGill** (4:26)
Yeah, an example of a mental model, right? So inversion almost comes from mathematics when you try and reverse a problem on its head. So for example, the best example I always use, because it's so woolly, trying to figure out, inversion is particularly useful for those woolly conversations or those woolly questions. So like happiness, right? What is, how do I become happy? People spend their whole lives exploring that question, what's this purpose I've got to find? Do I have to go to a spiritual retreat in India and sit and meditate for two years? But instead, Munger would just say, you just flip it on its head and go, how would I make a happy person depressed? And it's like quite easy, the answer's there then, right? So first thing you do is mess with their, mess with their sleep schedule. Like completely flip it on their head, have them sleep in late, have them sleeping like awful, have blue light coming in. So you do that. Second one you do is mess with their nutrition. Like you'd have them eating awful food. You'd immediately isolate them from their friends. You'd put them in a shit job and you'd just take away any form of meaning or hobbies from their life. So you look at those five things there. If you avoid all of those five, you've basically achieved happiness, right? You're 95% the way there. So instead of like Munger basically looks at it as, instead of trying to seek excellence, just focus on avoiding stupidity. He says that's the success of his career. Like he's never gone out to seek like excellence, him and Warren. It's just always avoiding stupidity.