No problem paying for something that absolutely needs to be done. E.g. repair a leak in the roof. Replace something.
Don't notice money spent on regular monthly payments. E.g. mortgage.
Don't notice $1000 spent as 50*$20 but more frightening to spend $1000 at once.
Fear of loss when investing is big. It feels like such a leap of faith to invest in anything.
However spending the same money as the investment on a holiday is OK for some reason.
Easier emotionally to not earn $1000 than to earn it and spend it, even though the financial outcome is the same. Has nothing to do with working hard etc.
It's hard to hodl!
I mean, the way I see (you can add it to the list of mental models), there is a flow of money going through you. Some of the flows you can influence more, some of them less. There is no such thing as "your money". It's really arbitrary where we draw the line.
For example, most people consider money they earned (before taxes) as theirs, while money spent on mortgage/rent as someone's else. In reality, they often have about the same practical ability to influence the amount in both flows.
Your comment feels completely out of line.
This comment thread is talking about mental models about money. The GP comment isn't complaining about taxes. Most likely, the observation about taxes is to say that earning an additional $1000 income does not translate into the same amount that could be spent. Or something similar, related to the mental model topic they're talking about.
Sure, I pay a bit more in Medicare levy or income tax but I don't ever look at it. I know when I get sick I just go to the doctor and its' sorted, For $70 at that time with a rebate of $35 and then if I'm getting a script filled it's usually under $15 dollars. And if i have no cash i can take a bus a little further out and bulk bill.
The same people who think that taxes are bad in this place are usually (I know I'm generalizing) the same people that bemoan company taxes. Yet if you look at places like Australia and elsewhere it's those same companies that pay no tax in our jurisdictions at all. I appreciate that our laws make this so. But there is the letter of the law and the spirit of the law. And those companies/people make a choice.
Interesting side note: The people who run those companies are usually talking about UBI. Who the f--k is going to pay for that if those companies don't pay tax.
But hey, what do I know I just pay tax and never really worry about it. If I have money I do stuff. If I have less money, I do less stuff.
It's important that peoples mental models of tax do not regress to thinking it's just a cash grab. If you think government wastes money there are plenty of opportunities to get involved to change that or your way of thinking. But reducing the concept of taxes like this a real danger to any form of productive social contract.
Although the last sentence of the comment doesn't add much to his point.
Maybe you shouldn't jump to conclusions and react aggressively to innocuous things?
I had to complete a tax return for the first time last year, although it's completely illogical (and I'd budgeted the number so knew what it would be well in advance), it felt more painful paying the ~£_,000 of extra tax I owed than paying the ~£_0,000 of tax that had been automagically deducted from my pay packet.
A politician (republican-ish, Scandinavia) once told me, that the whole tax-system would fall apart if people were paid their salaries in full and had to pay their taxes in cash.
It is of course absurd and impractical in our day and age, but I think most people are blind to the amount of tax they pay.
It is the same in the US - however, if you get a job offer in the US for a given salary - that is a pre-tax number. I believe the grandparent was making the point that in Russia, salary and wages are discussed purely in after-tax terms.
For example, working two jobs.
(Ok, I don't live there any more but... )
I love the idea of cataloging your interests at this high-level of abstraction, and wish it were more common.
For anyone not in the know, Munger is Warren Buffett's business partner. The basic idea is to collect an interdisciplinary checklist of different paradigms for viewing the world, and then run through that checklist and apply each mode of thinking to whatever tough problem you're working through.
HN readers probably already know all of this, but I just love this approach to thinking and wanted to share the wealth :)
1. One mental model that I applied when reading this post on mental models (so meta!) is "audience". As I was reading I thought to myself, "Who is this guy? Why should I trust his mental models? Is he living a life that I want to duplicate?" I mean it with respect and with no malice towards him, he's probably awesome. It's also possible to pick up useful mental models from people that you may not necessarily want to emulate. All I'm pointing out is that it's been really useful for me to consider the motivations and track record of the person giving me advice, before I take that advice to heart.
2. It's a long list! I wonder if it'd be more fruitful to have a shorter list, but to apply each mental model rigorously, every time. Charlie Munger (the guy who popularized mental models, as far as I can tell) himself is a huge advocate of checklists. I remember him saying something along the lines of "you have to be disciplined about your mental models. You have to apply every one, every time. You can't pick and choose."
That's a kind of ideological way to phrase the situation. It's easier to just describe the "stable market hypothesis"; however things are organized is the way that market structures have stably gone and thus can't easily be changed (whether market are efficient or not). This includes all the points in the parent plus the point that you may have improved on app/gimzo X significantly over the weekend but the market probably still won't jump to your solution easily because of mind-share/network-effect/existing-investment/market-leader's-connection-to-customers/etc.
Some I do not agree with (although perhaps the model presented is useful depending on desired outcome).
-Efficient market hypothesis: Markets are not fully efficient and the state of the world is not optimal. Thus opportunities exist. It's our job as engineers (and business people/humanitarians/writers/philosophers etc.) to recognize and correct these inefficiencies. Look for them. Its not easy and thus is called work. Do it anyway.
-Base Rates: People are over-optimistic. They are also bad at finding similar things to compare.
-Emic vs Etic: Dangerous form of mental laziness. While it might be "efficient" it leads to underestimating people and phenomenon, missing out on valuable information and, as the old saying goes, judging books by their covers. Sometimes valuable lessons and opportunities can be found in strange places. And often it isn't even what is said or even "anti-lessons". Better to remain somewhat open and listen without preconception and with consideration as much as possible.
-Bias for Action: Unsure about this one. Looking back I'm not sure if I regret more actions I didn't take or actions I took that were mistakes. I think probably the second has had more negative impact. But I've been a fairly active person, maybe for a less active person it would different. In my case though very often doing nothing would have been the better choice.
-Charitable interpretations: These do make relationships go better. Especially for people who take advantage of others. I'd recommend outward charitable interpretation, inward cynicism. It's usually more accurate for prediction. But cynicism does make a person unpleasant and negative so best not to display it.
-Global Utility: A dangerous precedent. But sometimes yes, indeed needed. Be extremely careful of deals with the devil though and prefer principal, honer and fairness as much as possible. The long term gains are usually greater. The long term effects of short term utility can sometimes be fatal.
-Reasonable Person Principal: Meh "reasonable" can be whatever a group decides. It's not always good. However, no need to keep someone around who doesn't fit the agenda. Hopefully you don't see them in the 30 under 30 list in a few years though.
Otherwise it's a pretty good list.
Of course, it's also important to reflect on your thinking and be able to spot the exception that proves the rule. But it's unrealistic to be constantly vigilant about your own analysis of things. You need abstractions (eg. mental models) to be efficient, but leaky abstractions will ruin you.
I use a modified model of this called the 'Forgiving Copycat' model. Basically, I assume there is some chance people accidentally do rude/inconsiderate things. At the same time, someone who consistently does rude or inconsiderate things is probably rude or inconsiderate.
To that end, I ignore rude behavior the first time, address it the second time, and return it the third.
Agreed. This model seems akin to prejudice.
I created this site which I use to help me figure things out.
As a Stoic, it's good food for thought to improve your "perception" of life and the world.
About rigid dichotomies though, including the page I linked, I think it's a cognitive bias in and out of itself.
I take these observations as "food for thought", literally, not ready-made conclusions to swallow. A good basis to reflect upon things, but it's just that, the initial spark.
But overall, pretty good overview and I appreciate the links to other sources.
Still, LRU only works if they are of equal importance. Otherwise, work on the important one, even if you've worked on it more recently than the others.
A related idea is the "tyranny of the urgent". You can't let the urgent things keep you from doing the important things. (I stole this from a booklet with the quoted title, which stole the idea from the manager of a cotton mill.)
Example: What would happen if HN found out we’re mining our users’s IMs?
I feel like I might be okay with it if was a university (.edu domain) and I knew it was anonymized. Not sure I'd be okay with a random blog doing that.
written for sure from the perspective of an optimist.
Moral of the story: helping people on IRC can be a fun and enlightening past-time.
I observed that I very often disagree with people who use anime forum avatars. A few of them came close to getting banned (I'm not a moderator anywhere), others made really poor arguments.
Instead of concluding that people do buy lottery tickets, so their model doesn't accurately model "value".
So 20 hours -> 40 days -> 80 weeks -> 160 months
I love it
Otherwise, many of the models may seem contrived and practically useless.