How to Make Better Decisions: 5 Mental Models You Weren’t Taught in School

1. Introduction: The Quality of Your Thinking

Traditional education doesn’t always prepare us for the real world. Many of us graduate with specialized knowledge but lack a fundamental toolkit for navigating complex, real-world decisions. As author Shane Parrish discovered early in his career at an intelligence agency, a computer science degree doesn’t teach you how to handle choices that affect not just your country, but other countries. We aren’t taught how to think.

This gap in our education leads to a powerful core idea: “The quality of your thinking depends on the models that are in your head.”

So, what is a mental model? Simply put, “a mental model is simply a representation of how something works. We cannot keep all of the details of the world in our brains, so we use models to simplify the complex into understandable and organizable chunks.” They are lenses that help us see the world more clearly.

This article shares five of the most impactful and surprising mental models from the book “The Great Mental Models.” These tools can help you see the world from different angles, avoid costly mistakes, and ultimately, make better decisions.

2. The Takeaways: Five Mental Models to Reshape Your Reality

2.1. To Find the Solution, Start by Inverting the Problem

Inversion is the practice of approaching a problem from the opposite end of your natural starting point. Instead of thinking forward about how to achieve your goal, you think backward and consider what you want to avoid. The power of this model lies in a simple truth: avoiding stupidity is often easier than seeking brilliance.

As the 19th-century German mathematician Carl Jacobi advised:

“invert, always invert.”

Instead of asking how to get rich, inversion prompts you to ask how to avoid being poor, and then systematically eliminate those behaviors. This is precisely the logic that led John Bogle, founder of Vanguard, to create the index fund. Bogle didn’t ask, “How can I get the best returns?” He asked, “What are the biggest things that prevent good returns?” The answer was high fees and bad management. By inverting the problem to focus on what to avoid, he created a product that passively tracked the market and eliminated those two wealth-eroding behaviors.

2.2. Look Beyond the Obvious with Second-Order Thinking

Second-Order Thinking is the practice of thinking farther ahead and considering the subsequent effects of our actions. First-order thinking seeks a simple, immediate solution. Second-order thinking understands that immediate solutions often create bigger, delayed problems.

A vivid historical example comes from British colonial rule in India. The government, concerned about the number of venomous cobras in Delhi, offered a reward for every dead snake. The first-order effect was that citizens killed cobras to collect the reward. The second-order effect, however, was that enterprising citizens began breeding cobras to create a steady income stream. When the government realized this and canceled the program, the breeders released their now-worthless snakes, making the cobra problem worse than it was at the beginning.

Failing to ask “And then what?” can lead to irreversible problems. As ecologist Garrett Hardin stated:

“You can never merely do one thing.”

Every action has ripples. Second-order thinking is the discipline of seeing them before they become tidal waves.

2.3. Don’t Mistake the Model for Reality: The Map is Not the Territory

The mental model of “The Map is not the Territory” reminds us that all models, theories, and abstractions are, by definition, reductions of reality. They are imperfect, and we get into trouble when we forget this. This principle is captured perfectly in the text:

“The map of reality is not reality. Even the best maps are imperfect. That’s because they are reductions of what they represent.”

Newtonian physics is a perfect example. For hundreds of years, it served as an incredibly useful map for understanding our world. However, it was not the complete territory. Albert Einstein, with his theory of Special Relativity, created a new, more accurate map that explained phenomena Newton’s model could not. A map is a static snapshot of a moving world. Relying on it completely is like trying to navigate a living city using a photograph.

2.4. The Most Important Knowledge is Knowing What You Don’t Know: Your Circle of Competence

We live in a world that rewards the appearance of expertise, making it tempting to pretend we know more than we do. The Circle of Competence is a powerful antidote to this dangerous impulse. It represents the areas where you have deep, nuanced knowledge. The core lesson is not to have the biggest circle, but to be brutally honest about where its boundaries lie. Knowing where your knowledge is lacking is essential for understanding where you are vulnerable.

The book uses a powerful analogy: imagine the deep knowledge of a “Lifer” who has spent their entire life in a small town versus the superficial understanding of a “Stranger” who has only been there for a few days. The Lifer knows the history, the relationships, and the hidden dynamics. True competence is being the Lifer within your specific domain.

As former IBM chairman Thomas Watson put it:

“I’m no genius. I’m smart in spots— but I stay around those spots.”

But what does it take to build and maintain an honest Circle of Competence? It requires three key practices:

1. Curiosity and a desire to learn. You can learn from your own experience, but this is often costly and slow. A more productive path is to learn from the experiences of others through books, conversations, and direct study. You must always approach your circle with curiosity, seeking information that can expand and strengthen it.

2. Monitoring. To combat overconfidence, you need to keep an honest track record. Keeping a journal of your decisions and their outcomes—especially your failures—is the most private and effective way to give yourself feedback. This type of analysis is painful for the ego, which is precisely why it’s so effective for building real competence.

3. Soliciting external feedback. We all have blind spots. Atul Gawande, one of the top surgeons in the United States, hired a coach to watch him in the operating room. Why? Because he knew an outside perspective could reveal suboptimal techniques that he couldn’t see himself. It takes courage, but this feedback is critical for maintaining your edge.

In a world that often rewards feigned expertise, true competence comes from understanding and respecting the limits of your own knowledge.

2.5. Assume Stupidity Before Malice: Hanlon’s Razor

Hanlon’s Razor is a principle that states: “we should not attribute to malice that which is more easily explained by stupidity.” This model is a powerful antidote to paranoia, reminding us that bad results are more often the fault of mistakes, ignorance, or laziness than a deliberate plot.

Always assuming malice puts you at the center of everyone else’s world. This is an incredibly self-centered approach to life. When you apply Hanlon’s Razor, you give yourself more realistic and effective options for dealing with bad situations, rather than defaulting to a defensive posture.

Perhaps the most powerful story illustrating this model is that of Vasili Arkhipov, a Soviet submarine officer during the Cuban Missile Crisis. When his submarine was hit by blank depth charges from American destroyers, his captain, believing war had started, wanted to launch a nuclear torpedo. Arkhipov was the only senior officer who refused to authorize the launch. By not assuming the American actions were malicious—but could instead be a mistake or a warning—he single-handedly prevented a nuclear war.

3. Conclusion: Building Your Latticework

These five models are not isolated tricks. They are foundational tools for shifting from being a passive recipient of circumstances—wondering why you have no time and why things just happen to you—to becoming an active, clear-eyed navigator of reality. They help you build what investor Charlie Munger calls a “latticework of theory” in your head. The more models you have, the more you can see the same problem from multiple dimensions, getting you closer to understanding the world as it truly is. As Munger said:

“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.”

By integrating these tools into your daily thinking, you move beyond simple memorization and toward genuine wisdom. You start to see the hidden forces that shape our world and your place within it.

Now that you have these new lenses, which of your own long-held beliefs might be worth re-examining?