Learn more about personaldevelopment with this collection
Identifying and eliminating unnecessary expenses
How to negotiate better deals
Understanding the importance of saving
10. Averages
Whenever you are dealing with averages, be careful of the distribution behind them.
A Bill Gates monthly income in a group of 50 ordinary citizens can give an extremely misleading average.
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MORE IDEAS ON THIS
6. Compounding
When it comes to compounding, don't trust your intuition - you have no idea how powerful it is.
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2. Confirmation bias is the mother of all misconceptions.
It is a tendency to interpret new information so that it becomes compatible with our existing theories.
Warren Buffet has seen people losing money with this because they ignore facts that contradict the theory in the mind of the investor.
Disconfirming evidence must be sought out to b...
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7. It is not what you say, but how you say, that's important.
99% Fat-Free product seems more healthy than a product with 1% Fat.
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5. Loss Aversion
The fear of losing something motivates people more than the prospect of gaining something of equal value.
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8. If you are not a part of the solution, you are definitely a part of the problem.
There is no 3rd category of passive onlookers.
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3. Speak your mind
If you ever find yourself in a tight unanimous group, you must speak your mind, even if your team does not like it, and even if it means risking expulsion from the warm nest.
And if you lead a group, appoint someone as devil's advocate.
He or she will not be the most popular member of...
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9. Passion
Follow your passion even if you have to do away with part of your income for that
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1. Hard Work
Never underestimate the hard work and lower probability of success, just because we are shown more successful people than many more actual failures.
It does not mean, in any way, that you should not dream big. It just says that don't get overawed by the number of success stories you read an...
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4. Induction
Send an email to 10,000 people with the stock market predictions by dividing them into 2 groups - telling reverse prediction to each group. Prediction for one of the groups will come true.
Send a new prediction to the 5,000 whom you predicted correctly earlier - again after dividing them in...
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CURATED FROM
CURATED BY
10 Powerful Lessons of the book “The Art of Thinking Clearly”
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Not looking at extremes
A focus on a "normal distribution," - also known as a "bell curve," is where most people are near the average score, and only a small group is far above or below average. However, when you're dealing with extremes, small group differences can matter a lot.
Although a small change in perfo...
Extremistan
In Extremistan environments, there can be wild randomness and extreme deviations. Typically, there’re no physical constraints and no known upper/lower limits (e.g. knowledge, financial markets, e-book sales, social media “likes”). Thus, the outliers can make a big difference—if y...
No frequent meetings
Get rid of regular meetings unless you are dealing with a pressing matter. Once the issue is resolved, the meeting frequency should drop.
Ask yourself how urgent the need behind the meeting is and if you can instead reduce the frequency and communicate via email or group chat.
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