I celebrated my 28th birthday recently and it was time for an annual run through of my principles. I thought it would be a neat idea to share it on the blog.
These are quotes, mental models, lessons, biases, and/or any idea that I carry with me in my day-to-day life. I am giving it a blanket term, Principles.
Most of my decisions are made using these principles which I have picked up through reading, learning, implementing, and mostly failing. These principles have changed my life.
I take notes. Lots of them. So these are notes from lessons learned from books, podcasts, blogs, tweets, and most importantly experiences which I am ingrained in my life.
I am hoping they will help you as well. To make better decisions. Think more clearly. Be more stoic.
Am I the best person to tell you how to think clearly? No. But the people from whom I have learned these lessons are. They are authors. Investors. Philosophers. Emperors.
I don’t take credit for any of the principles. Most of the principles, I have learned from other giants. I have merely stood upon their shoulders.
STRONG OPINIONS, LOOSELY HELD
Opinions are important. A person can form strong opinions only when they have learned, experienced, and understood an idea. If a person holds an opinion without doing any of the above, they are just forming a judgment. An assumption. Imagination.
Why loosely held? You cannot be rigid with things that you have learned. The first lesson to learn is to say “I do not know”. So your opinions need to be strong and yet if you unearth a new piece of information, weak enough for you to transform your opinion.
DESIRE IS THE CONTRACT THAT YOU SIGN WITH YOURSELF TO BE UNHAPPY
Life is full of desires. You don’t desire for more, you desire for all.
And desire makes you miserable. So what can we do about it? You cannot live without desires, can you? Not having a desire is also a desire. Then you’re just unhappy.
A good way to tackle this is to have conscious desires. We desire so many things all at once.
So instead focus consciously on everything you desire and meditate if they are really necessary or if you will be satisfied without them. Weed out your desires and focus only on the important ones. The ones that bring you happiness.
But even when you do that, remember – desire is the contract you sign with yourself to be unhappy.
MORE SIGNAL, LESS NOISE
A lot of our lives are lived surrounded by noise. Daily news, Instagram feeds, Whatsapp messages, Television, Mobile notifications.
You need to seek signal in the noise or you will live your life distracted. The wise man listens to the meaning; the fool only gets the noise.
How do you seek the signal? What you are reading, listening to, consuming – does it help you in the long term? Is it adding value to your life? Can you add value using that information?
If not, it is just noise. Does consuming daily news help you in anyway? If it is really important, your friends will tell you anyway!
YOU SHOULD ALWAYS BE THE DUMBEST PERSON IN ANY CONVERSATION
Enter any conversation thinking you don’t know anything. The person you’re talking to has something to teach. This is the best way to learn.
And if you’re the smartest guy in the room, you’re in the wrong room. Get the fuck out.
WE SUFFER NOT FROM THE EVENTS IN OUR LIFE. BUT FROM OUR JUDGEMENT ABOUT THEM
It’s so much better to see things as they truly, actually are, not as we’ve made them in our minds. I am a student of stoic philosophy and you will see that a lot as you keep reading through this article.
Judgments are formed even before the event happens. Judgments are formed of the future based on our past experiences. But are they true? Real?
So why suffer? Your past makes you sad, future makes you anxious, live in the present.
TAKE RESPONSIBILITY
Taking responsibility increases your ability to respond to events. And by the response I mean – you can ignore it, do something about it, or delegate it.
But when you don’t take conscious responsibility, you can’t do anything about it. In most cases, it comes back to bite in your ass!
If you take responsibility you will be able to ask “how can I fix this”? This is freedom.
Conscious action and limitless responsibility gives you freedom.
MEDITATION IS A SUPERPOWER
As a kid, I always wanted to have a super power. I found one – meditation.
Meditation helps you be more conscious. Live in the present. Think clearly. Meditation doesn’t only slow down time but helps you reflect on your purpose.
All of this for 15-minutes per day. An offer you can’t refuse.
BE THE SILENCE THAT LISTENS
Either be silent or say something better than silence.
People who know, don’t speak. People who speak, don’t know.
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THE OBSTACLE IS THE WAY
See things for what they are. Do what we can. Endure and bear what we must. What blocked the path now is a path. What once impeded action advances action. The obstacle is the way.
Our actions may be impeded. But there can be no impeding our intentions or dispositions. Because we can accommodate and adapt. The mind adapts and converts to its own purposes the obstacle to our acting. The impediment to action advances action. What stands in the way becomes the way.
It is the best way to be antifragile.
IMPERMANENCE
This comes from reading Buddhist, Stoic, and Hindu philosophy. Nothing in life lasts.
Neither the failures nor the successes. Everything is impermanent. Behave that way.
HEDONIC TREADMILL
The hedonic treadmill is the observed tendency of humans to quickly return to a relatively stable level of happiness despite major positive or negative events or life changes.
You are going to be back at the base rate. Impermanence.
MEMENTO MORI
Death is inevitable. Don’t forget. Live in the present. You’re going to die anyway.
Reflecting on your own death helps you stay grounded.
EUTHYMIA
Believe in yourself and trust that you are on the right path. Don’t be in doubt by following the myriad footpaths of those wandering in every direction.
You have chosen your own path. Follow it.
FIRST PRINCIPLE THINKING
A first principle is a basic assumption that cannot be deduced from any other assumption. Imagine lego building blocks.
If you’re learning something, can you break it down further? If so, do it. Do you understand this? No? Can you break it even further? If so, do it. Break it down till you reach the fundamental blocks. The bare-bones. Now start learning from there.
You are trying to learn photography. Do you understand how the camera works? What is the triad of photography? Do you understand aperture? Shutter Speed? ISO?
Every subject can be broken down similarly. Once you’re at the basics, you build up from there. Lego.
CIRCLE OF COMPETENCE
You know what you know. You know what you don’t know. And you have no fucking clue about what you don’t know.
Play within your circle of competence. You are the strongest there. Keep expanding the circle.
SEEK SOLUTION, NOT DISTRACTION
Whenever we are faced with a problem, we are surrounded by choices. But most of the time, I have personally observed, discussions are around why the problem came to be. This is noise.
You can’t do anything about something that has already happened. Seek solutions. Make decisions based on choices that are available to you. Get rid of the distraction.
BUILD SYSTEMS, NOT GOALS
You do not rise to the level of your goals. You fall to the level of your systems. True long term thinking is goal-less thinking.
Goals are about the results you want to achieve. Systems are about the processes that lead to those results.
Winners and losers have the same goal – to win the race! It is the system that sets them apart.
PARETO PRINCIPLE (80-20 RULE)
80% of the effect comes from 20% of the causes. 20% of input causes 80% of the output. 80% of the impact is from 20% of the action.
We have gone over this multiple times, haven’t we? (read my mental models article)
Use it. Go for the big wins. The answers that have the most impact. 20% making the 80% impact. Are you hunting antelopes or field mice?
OCCAM’S RAZOR
Another favorite and most used mental model. When presented with competing hypothetical answers to a problem, one should select the one that makes the fewest assumption.
When you’re making assumptions about a problem, go with the simplest one.
DON’T FORGET THE PEOPLE WHO ARE THERE FOR YOU AT YOUR LOWEST
Life is cyclical. Full of ups and downs. When you’re having a good time, you feel surrounded by so many people.
It’s the time when you are at your lowest, you see people who actually surround you.
Don’t forget them. Be there for them. That’s your tribe.
EVERYONE IS A FOOL FOR AT LEAST 5 MINUTES A DAY. WISDOM CONSISTS OF NOT EXCEEDING THE LIMIT.
As Charlie Munger says, don’t try to increase your profits. Reduce your losses. Protect your downsides.
You don’t think of what you want, you think about what you want to avoid.
You can fail to be more intelligent. Or you can try to be less dumb. Inversion thinking.
BE A MEANINGFUL SPECIFIC INSTEAD OF A WANDERING GENERALITY
You cannot always please everyone. Be yourself. Authentic. You can kill the competition by being authentic.
If you try to please everyone, you will be a wandering generality.
There is a reason there are so many potato chips variants in the supermarket. Everyone has different taste. You cannot please everyone.
PARKINSON’S LAW
Work expands to fill the time available for its completion.
Set realistic deadlines. Go for perfect, but good enough is just fine.
If you give yourself 2 weeks to finish something, you will take 2 weeks. If you give yourself 6-months to finish the same thing, you will take 6-months.
ONLY KNOWLEDGE THAT IS USED STICKS IN YOUR MIND
An intellect without any experience is often worse than useless.
You can spend hours and hours learning. Reading. But that wouldn’t make you smart. Only the knowledge that is used sticks in your mind.
Nobody has ever eaten their way to becoming a Michelin Star Chef. You have to actually cook.
YOU ARE ONLY AFRAID OF THINGS THAT YOU DON’T UNDERSTAND
The things that you always desired are on the other side of the fear. Understand why you are anxious. Deal with it.
You are scared of the interview, only if you’re not prepared. If you’re one of the best in the fields, you will never worry.
It is okay to be afraid. But you can only deal with fear once you consciously understand why are you afraid?
NEVER LET ANYONE EAT ALONE
Of course, unless they want to.
Humans crave company. We are lonely. You don’t know what the other person is going through.
A small human interaction goes a long way. And eating is one of the fundamental activities for human connection.
YOU HAVE NO RESPONSIBILITY TO LIVE UP TO WHAT OTHERS THINK
It is their expectations of you. You don’t have to live up to them. If you don’t feel like “hell yeah!” for plans with friends, just say no.
Don’t feel pressure to accomplish something because that is what others expect from you.
You have no responsibility to live up to what other people think you ought to accomplish. I have no responsibility to be like they expect me to be. It’s their mistake, not my failing.
SURROUND YOURSELF WITH PEOPLE WHERE YOUR DESIRED BEHAVIOR IS COMMON WITH THE GROUP
The easiest way to break a habit is to change your environment. In this context, I visualize our environment being the people we talk to.
If you desire something, surround yourself with people for whom the desired behavior is common. If you want to be fit, surround yourself with people for whom fitness is already a lifestyle.
IF YOU’RE COMFORTABLE, STEP UP
If you’re comfortable in the position you are, you are probably in a rut. You need to step up and take on a new challenge.
Nothing good comes out when life is easy. You will be bored.
Stepping up could range from learning a new skill to starting a new business to moving to a new country!
SEEK WEALTH, NOT MONEY OR STATUS
Seek wealth, not money or status. Wealth is having assets that earn while you sleep. Money is how we transfer time and wealth. Status is your place in the social hierarchy.
Ignore people playing status games. They gain status by attacking people playing wealth creation games.
You’re not going to get rich renting out your time. You must own equity – a piece of a business – to gain your financial freedom. That is wealth.
Understand the ladder of wealth creation.
RESENTMENT, ANGER, PAIN, HURT, AND JEALOUSY ARE POISONS YOU DRINK AND EXPECT SOMEONE ELSE TO DIE
If you have fixed your inner self, engineered it; outside doesn’t matter. Everything on the inside determines the outside.
If you’re angry, you’re responsible for your anger – ask why are you angry rather asking who can I blame for my anger. If you’re responsible for your own anger, how can you be angry at yourself?
HAPPINESS IS A CHOICE
You are responsible for all your decisions. So why not choose to be happy?
The only thing in your control is your mind. And if you’re not happy with the only thing you can control, what’s the purpose of life?
AGGREGATE OF MARGINAL GAINS (COMPOUNDING)
Tiny habits while small in isolation produce enormous changes when combined. Small habits don’t add up, they compound.
And the first law of compounding is, “never interrupt it unnecessarily”.
Apply this to your daily habits and lifestyle. Never interrupt your good habits unnecessarily. Let them compound.
DUNNING-KRUGER EFFECT
People who are incompetent at something are unable to recognize their own incompetence.
After the peak of stupidity, there is always a valley of despair. Only consistency, persistence, hard work, and creativity will help you reach the plateau of enlightenment.
BE FEARFUL WHEN OTHERS ARE GREEDY, BE GREEDY WHEN OTHERS ARE FEARFUL
Humans are irrational in herds. Consensus bias occurs when people in groups see their own behavioral choices and judgments as relatively common and appropriate to existing circumstances.
Mr. Buffett gave this quote as investing advice. You can apply it to other walks of life as well.
WHAT GETS MEASURED, GETS MANAGED
Making any change is difficult. But the first step is always to measure it.
You cannot improve on something unless you know how much you have to work on it!
BUSY IS OUT OF CONTROL
If you feel busy, you’re not organized. Take a step back. Plan better. Organize. And tackle your time.
If need be, start saying no unless you feel back in control.
FOCUS YOUR ENERGY, NOT TIME
You can be optimistic about your time. Not energy.
You have a limited amount of energy per day but you always have 24 hours. Are your energy levels the same throughout the day?
You cannot achieve the same level of productivity when your energy levels are down that you can when you are the most energetic.
LOSS AVERSION
We have a tendency to prefer avoiding losses to acquiring equivalent gains. This is not rational.
Losing $5 feels significantly worse than gaining $5. Don’t be attached to a decision.
SURVIVORSHIP BIAS
Avoid the tendency to only look at the positives. Things that survive don’t provide the complete picture.
Look at the ideas with low visibility. If 10 people made it to the top, don’t just chase their success. Look at the people who didn’t as well. What was the difference?
Heroes are heroes because they are heroic in behaviour; not because they won or lost.
CAUSATION AND CORRELATION
If there is a correlation between two or more things, it does not mean there is a causation.
If you step out and it rains, it doesn’t mean you’re causing the rains.
NETWORK EFFECTS
Seek networks with powerful Network Effects. Every new node should increase the value of the network.
Make sure Network Effects are strong in your personal relationship as well. If you’re not adding value, why are you in that network? If someone is not adding value to your network, why are they in your network?
OPPORTUNITY COST
For every decision, you are giving up on an opportunity. Opportunity cost is the cost taken by not picking the other alternatives.
However, don’t regret the choices that are not made. Those are sunk costs.
GOODHART’S LAW
When a measure becomes a target, it ceases to be a good measure. Never forget on reflecting about the why?
More followers mean good content but that shouldn’t mean content for more followers. Remember why you started posting in the first place!
AVOID TOXIC PEOPLE
The easiest way to avoid conflict is to avoid people who seek conflict. If your mindset doesn’t match someone else’s, you’re not forced to work/be friends with them.
Just avoid. Your personal mental health trumps everything else. If you can’t work with them for 2 days, avoid working with them altogether.
Toxic people have some traits that I have observed
- they don’t treat people lower to them (in wealth, assumed status) well
- dishonesty
- narcissistic behavior
VIA NEGATIVA – PROCESS OF ELIMINATION
The method of getting a good idea is by eliminating a lot of bad ideas. After all, the best way to have a good idea is to have a lot of ideas. This process of obtaining knowledge via subtraction is also called Via Negativa.
HYPERBOLIC DISCOUNTING
It refers to the tendency for people to increasingly choose a smaller-sooner reward over a larger-later reward as the delay occurs sooner rather than later in time.
People tend to select short-term gain over long-term; instant-gratification over delayed gratification.
Do you spend time drinking at a bar for instant happiness or actively work towards internal happiness by working out and eating healthy daily?
The answer is not so straightforward for everyone.
FIRST CONCLUSION BIAS
The first step to learn is to understand that you don’t know anything.
Our brain shuts off as soon as you form a belief. Once you have decided you know something, it’s turned off.
It doesn’t consider any other reasoning or argument. This is dangerous.
You shouldn’t resist new information. Don’t fall for the first conclusion bias.
IMPOSTOR SYNDROME
Everyone is figuring life out. It’s okay.
Impostor Syndrome is faced by everyone. The individual doubts their accomplishments or talents and has a persistent internalized fear of being exposed as a “fraud”.
But this is true even for people at the top of their field.
DON’T BE FOOLED BY RANDOMNESS
Life is a lot more complex than we understand. However, we go seeking patterns in life when there are none.
Just because you made the right investment decision once, doesn’t mean you understand the market.
All millionaires are persistent, hard-working, consistent- it doesn’t mean all persistent, hard-working, consistent people are millionaires.
Life is full of biases and fallacies. You cannot predict everything.
I have talked about a lot of topics on my blog before. Here are some important links to continue reading.
- MY FAVORITE BOOKS AND READING RECOMMENDATIONS
- MENTAL MODELS AND LOGICAL FALLACIES
- NETWORK EFFECT SERIES – WHY IS IT SO IMPORTANT?
- MASTERING THE TIME MANAGEMENT SKILL
