The world is an incredibly complex place. To understand it to the best of our ability, we need the right ways of viewing it. Just like watching a 3-D movie without the proper glasses results in a blurry picture, living in the world without the right mental frameworks leads to confusion and failure. However, unlike the single pair of glasses needed for a 3-D movie, the lenses required for navigating life are varied and intricate. These are what we call mental models—ways of viewing the world, each from a different perspective. Much like observing a cube from all its angles, mental models allow us to see a situation from different viewpoints, helping us get the clearest possible picture.

Life, at its core, can be seen as a series of decisions. Over time, those who consistently make better decisions tend to lead better lives. In this case, "better" refers to decisions that align with reality and the well-being of the decision-maker. Mental models are crucial for making informed decisions regarding our careers, health, family, romantic relationships, and much more. This importance becomes even clearer for individuals whose livelihood depends on making good choices—often with very little margin for error. Successful people, such as government leaders, business CEOs, and investors (think of Warren Buffett), are fans of mental models because they help guide their decisions.

So, what do mental models look like? Surprisingly, they often consist of seemingly simple ideas. Take compound interest, for example, which is usually studied in finance. The idea that growth can happen exponentially over time is not only relevant in finance but also in personal development, relationships, and knowledge acquisition. For example, consider the growth of a tree. In its early years, a tree may grow slowly, adding only a small number of leaves and branches. However, as the tree matures, each new branch produces more leaves, and each new leaf captures more sunlight, which in turn allows the tree to grow even faster. Over time, this process of compounding growth accelerates—just like compound interest. How much the tree grows in a single month is not the same in the first year compared to its 20th year.

Another example of mental models, this time from engineering, is feedback loops, which are typically studied in control systems. A feedback loop occurs when the output of a system is fed back into the system as input, influencing future outputs. This concept is not only relevant in engineering but also applies to human behavior and habits. For instance, in personal productivity, positive feedback loops can reinforce good habits: accomplishing a task gives a sense of achievement, which motivates further effort, leading to even more accomplishments. Over time, this reinforcing loop accelerates progress, much like how a well-functioning machine continuously improves its performance. Similarly, negative feedback loops can help maintain balance, such as in emotional regulation, where acknowledging stress early helps a person take calming actions, preventing an emotional escalation.

However, the best results are usually gained from a combination of mental models. For example, the 2008 Financial Crisis can be understood through a combination of mental models like leverage, feedback loops, second-order effects, and confirmation bias. Leverage allowed banks and investors to amplify their gains but also magnified their losses when housing prices fell. This created a negative feedback loop—falling prices led to more defaults, which worsened the crisis. Second-order effects spread the crisis beyond housing, as failing banks led to a credit crunch and a global economic slowdown. Confirmation bias also played a role, as many believed housing prices would keep rising, ignoring signs of a bubble. Finally, moral hazard contributed, as institutions took on greater risks, expecting bailouts.

Although these models do not tell the whole picture, we should realize that mental models are like shortcuts or generalizations. They are not always right. However, I believe that combining them allows us to see the world more clearly than if we stick to just one field. As it is said, to a person with a hammer, everything is a nail. The idea of mental models is to have many tools in your tool belt so you can use the right tool or combination of tools to best solve the problem.