“Mental models” seem to be the latest and greatest thing. Popularized by folks like Charlie Munger, Ray Dalio, and even the Mental Model of the Month Club, they’re essentially a higher level way of looking at life’s challenges, situations, and opportunities. The 80/20 rule, aka the Pareto Principle, is one example.
I recently realized that I’d developed a mental model of my own that helps me make decisions. I don’t have a fancy name for it, but it’s really nothing more than considering everything an investment of some sort. This, then, helps frame decisions based on expected returns.