The main definition of opportunity cost is that every decision you make there is a trade off to it Not all trade offs are equal though so throughout your day you need to examine the trade offs you are making and figure out whether they work or not

Opportunity Cost 

This is a mental model that states you want to get things that are higher in quality but lower in investments or money. It states that when you bet on something most people don’t usually think will win your return on investment or ROI is incredibly large

Paramutal Betting Or “Pool Betting”

This is a strong mental model to have especially if you are going into a field that is already well established When you specialize you give people a reason to want to follow you or buy from your business. Specialization can help you gain more customers

Specialization Is Key 

Don’t go into business or marry someone you cannot trust that is a recipe for disaster When you say you trust someone then you need to show it by your actions as well that is important

Margin Of Safety and Trus

Incentives are one of the strongest influences in humankind Incentives help push workers to be more productive but you need to be careful because of the over justification effect

The Superpower Of Incentives 

Follow me if you want a part 3 and figure out a key way that you can build trust with anyone

Follow Me For Part 3

Charlie Munger, the vice chairman of Berkshire Hathaway and one of the most successful investors ever, is said to have the best 30-second mind in the world. He goes from A to Z in one move. He sees the essence of everything before you can even finish the sentence. How does he do it? Through observing reality and running it against his mental models. In this series of videos, you’ll learn some of the most important models which Charlie Munger uses, which he has talked about publicly. These mental models have helped Munger to conquer the stock market, but they are so diverse that they have applications within many other areas too. For example, they have allowed Munger to be a successful Chairman at a large hospital, and they have allowed him to overcome devastating personal losses. The series will cover a total of 35 of Charlie’s mental models. He says he has some 100 models in his head at all times, but he also says that a few of them carry most of the freight. I think that we’ll cover the most important ones in this series, which will be divided into 7 parts, will 5 models in each one. The models will primarily be related to investing, but also to associated subjects such as economics, entrepreneurship & career. Hope you enjoy. Part 3: https://youtu.be/p8VK5iajWyw The mental models covered in this episode are: 00:00 Intro 00:39 Opportunity Costs 04:40 Parimutuel Betting 07:24 Survival of the Fittest 11:25 Margin of Safety 14:01 The Superpower of Incentives The mental models that were covered in part 1 (https://youtu.be/ywyQ_eNNCJU ): - The Swiss Army Knife Approach - Make Friends With the Eminent Dead - Invert, Always Invert - Compounding - Crush Your Cherished Beliefs My goal with this channel is to help you make more money and improve your personal finances. How to become a millionaire? There are many ways to get there – investing in the stock market, becoming a stock trader, doing real estate investing, or why not becoming an entrepreneur? But whether you are interested in how to invest in stocks or investing strategies for creating passive income with rental properties – I hope to be able to provide you with a solution (or at least an idea) here. Warren Buffett - the greatest investor of our time - says that you should fill your mind with competing ideas and then see what makes sense to you. This channel is about filling your mind with those ideas. And in the process – upgrading your money-making toolbox.

Part 2 as I promised the Incentives mental model was especially interesting 

personaldevelopment

Personal Development

moneyandinvestments

Money & Investments

problemsolving

Problem Solving

Charlie Munger, the vice chairman of Berkshire Hathaway and one of the most successful investors ever, is said to have the best 30-second mind in the world. He goes from A to Z in one move. He sees the essence of everything before you can even finish the sentence.

How does he do it? Through observing reality and running it against his mental models. In this series of videos, you’ll learn some of the most important models which Charlie Munger uses, which he has talked about publicly. These mental models have helped Munger to conquer the stock market, but they are so diverse that they have applications within many other areas too. For example, they have allowed Munger to be a successful Chairman at a large hospital, and they have allowed him to overcome devastating personal losses.

The series will cover a total of 35 of Charlie’s mental models. He says he has some 100 models in his head at all times, but he also says that a few of them carry most of the freight. I think that we’ll cover the most important ones in this series, which will be divided into 7 parts, will 5 models in each one. The models will primarily be related to investing, but also to associated subjects such as economics, entrepreneurship & career. Hope you enjoy.

Part 3: https://youtu.be/p8VK5iajWyw 

The mental models covered in this episode are:
00:00 Intro
00:39 Opportunity Costs
04:40 Parimutuel Betting
07:24 Survival of the Fittest 
11:25 Margin of Safety
14:01 The Superpower of Incentives

The mental models that were covered in part 1 (https://youtu.be/ywyQ_eNNCJU ):
- The Swiss Army Knife Approach
- Make Friends With the Eminent Dead
- Invert, Always Invert
- Compounding
- Crush Your Cherished Beliefs

My goal with this channel is to help you make more money and improve your personal finances. How to become a millionaire? There are many ways to get there – investing in the stock market, becoming a stock trader, doing real estate investing, or why not becoming an entrepreneur? But whether you are interested in how to invest in stocks or investing strategies for creating passive income with rental properties – I hope to be able to provide you with a solution (or at least an idea) here. Warren Buffett - the greatest investor of our time - says that you should fill your mind with competing ideas and then see what makes sense to you. This channel is about filling your mind with those ideas. And in the process – upgrading your money-making toolbox.

Thank you for checking out The Swedish Investor. My name is Erik Abrahamsson, and on this channel, I will share with you the most successful strategies for taking your personal finances to the next level, in (well, hopefully) a simple and enjoyable way. Here, you will find time-tested investing advice from the most successful money managers and investors of our time.

About me:
-- Been investing in the stock market since 08/06/2013, and since then, I've beaten the S&P 500 by a fair margin
-- My CAGR on invested stock market capital is 19.5% as of July 2023 (after taxes and brokerage fees)
-- Read about 100 books on the topic of personal finance and investing

For my private stock portfolio & revealing insights into my investment strategy: https://www.patreon.com/TheSwedishInvestor 

I wish you all good fortune in your stock market investing!

Feel free to contact me on: theswedishinvestoryt@gmail.com

Charlie Munger: Mental Models for the Rest of Your Life (PART 2)

Opportunity Cost

Paramutal Betting Or “Pool Betting”

Specialization Is Key

Margin Of Safety and Trus

The Superpower Of Incentives

Follow Me For Part 3

CURATED BY

CURATOR'S NOTE

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