First principles thinking is a powerful mental model for driving non-linear outcomes. It also requires a willingness to ask difficult, uncomfortable questions.
Here are a few to help you get started:
What is the problem I am trying to solve?
We often waste time and energy trying to solve the "wrong" problem.
Identify the "right" problem before you start trying to solve it.
What do I know to be true about this problem?
Write down everything you know about the problem (and its previously attempted solutions).
Why do I believe these "truths" to be true? How do I know they are true?
Identify the source of your beliefs on the problem.
Be ruthless in evaluating their integrity and validity.
How can I support these beliefs? Is there real evidence to support them?
Seek out hard, tangible evidence that proves these beliefs to be true.
If you cannot find it, or if the sources are of questionable integrity, you have learned something valuable about your beliefs.
Are my emotions clouding my judgment and reasoning?
When emotions drive our thoughts and decisions, we rarely see good outcomes.
Remove emotions from the process.
What alternative beliefs or viewpoints might exist?
Acknowledging and understanding alternative viewpoints is a superpower.
Seek them out. Embrace them.
Evaluate them on their merits and ask these same fundamental questions about them.
What are the consequences of being wrong in my original beliefs?
Understanding the stakes is critical.
Always understand the stakes.
First principles thinking starts with questioning your beliefs.
Asking these questions will help you drill down to the foundational truths of a problem and ultimately identify a better solution.
If you start to feel like an endlessly curious child, you are on the right track.
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You can check out my original thread on first principles thinking below.
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I’ve been experimenting with AI financial tools. The new AI Advisor release from Origin is neat.
Every day:
1. What happened in markets 2. What it means FOR YOU
Then prompt AI Advisor for recommendations based on trends.
(not an investor, just a user and fan)
The power of stuff like this is in democratizing access to sound financial advice.
There’s a huge segment of the population that will be able to connect financial accounts and get personalized/customized financial guidance at a strong CFP level.
I don’t think it eliminates human financial advisors.
More like augments + broadens access to important information.