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First, think hard about whether a decision is a one-way door (irreversible, or reversible only with high costs) or a two-way door (reversible)

Decisions that are one-way doors include


Decisions that are two-way doors include


Spend a lot of time thinking about the one-way doors. But if it's a two way door, just roll with it without thinking too much. Remember that Action Produces Information

Making irreversible decisions

When making irreversible decisions, ask yourself the following:

Why I should say no


Why I should say yes


Making reversible decisions

Don't overthink it. Remember that action produces information. Just try things out, reflect on learnings, and either double down or move on.

It's difficult to get into this habit. But do it. Think of it as stochastic gradient descent. If you keep trying, reflecting on what you learnt, and changing to iterate quickly — you'll end up at the optimal way of doing things sooner rather than later

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Summary of Seeking Wisdom: From Darwin to Munger (how I arrived at the heuristics above)

<aside> 💡 The full summary and highlights are at Seeking Wisdom: From Darwin to Munger

</aside>

We should be aware of our biases, and should also learn why people make bad decisions. Then, we should codify these learnings into checklists so that we don't ourselves make bad decisions. To do this, we should use mental models and look at evidence dispassionately — while being aware of our cognitive biases.

Remember that you only need to get rich once. Figure out what your goal is and how to get there. And don't take stupid risks that could lead to ruin.

First, figure out what has worked well in the past. Ask: