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0:00 The quality of your decisions depends on the quality of the images in your head. The better your images, the better your decision and the better your ability to navigate this surrounding chaos called life. Everything we see or feel is not real. It's our brain's interpretation of a limited input signal. What it receives from our sensors, what we see, touch, and smell—a limited signal based on which the brain must construct some interpretation of the infinite world around us. A person sees a uniform or a white coat and trusts a specialist. Why ? Because that's the image in their head, the mental model. Seeing a coat means, accordingly, the status of a specialist. You have to trust in the database. We see a crowd rushing to buy something. There's a high demand for it

0:45 . We begin to copy the crowd's behavior . We buy. We see people consuming excessively. We copy their excessive consumption. Everything we see and feel are images in our heads. It's not real, it's an interpretation. But some images , some mental models are useful, and some will destroy you to hell. You don't need to collect solutions, you need to collect models of making the right decisions. There are several very famous people who have dedicated their lives to this analysis. One of the most famous, in my opinion, is Charlie Munger. He was Warren Buffett's business partner. He's like the eminence grise of Birkshers Hessaway. That's Charlie Munger's almoner. What specific benefit does studying mental models bring? I see two main directions

1:32 : for myself and for them. For myself. The better your images in your head, the better your interface, and the better your decisions, the better you play the surrounding game called Life, for yourself and for them. The better you understand what the average images in everyone else's head are, the more persuasive you are, the better you sell , the better you understand how marketing works, the better you interact with the people around you. Never listen to what a person tells you or what a system tells you. Always look at what they're getting paid for and what the relevant system rewards. Do you think a politician wants to take care of you and make your life wonderful and better than it was before ? No. A politician wants to gain power

2:17 over you. His real motive, his incentive, is to conquer. He wants to gain power over you, and you want to live well. You have a conflict of interest. You're never in the same boat . Officials of a certain kind say to a corrupt official: "Come on, give us a bribe, we'll solve your problem, close the criminal case." A person comes to a lawyer, the lawyer says: "No, they're complete idiots, we'll punish them because the law is on our side." These officials who offered you a bribe say to you: "Are you stupid or something? We could have brought you the money for three, yes, three kopecks, and we'd have closed the case for us: what are you doing?" And what does he do? He misread the incentives, because a lawyer has no incentive to get you out of trouble. A lawyer's incentive is to get a client and sue because while

3:03 they're representing you, they'll be making money. If you bribe an official, they'll close your case, and then the lawyer is left without a salary. They have nothing to feed their children with. So the lawyer tells you, "Bro, we're a rock-solid position. We'll sort this out now. His incentive is for you to sue because then he'll make money." A politician is telling you all the good against all the bad because he wants to win the election, gain power over you so he can commit corruption. Just don't give me this show, like, "We have this crazy thing here, and they have democracy over there," and so on. It's all crap there, it's all crappy there. The mechanism is slightly different, but both sides exploit one another, because they use regulatory capture and lobbying. When you bring

3:48 money, they make decisions in your favor, and then the whole society starts to lean on you and say, "This is democracy, you voted for this, son." The point is that people don't understand the real incentives in both cases. The exchange is interested in a lot of trading because they get a commission from trading when you place orders. Accordingly, the exchange will do everything it can to lure you into trading, which mathematically doesn't work at all. But who's going to figure this out? They have their own incentive . They want you to go there like to a casino, to lose all your money. That's why there will be corresponding buttons everywhere, corresponding advertising everywhere. Fixed salary versus KPIs. If we pay someone a fixed salary without evaluating their monthly accomplishments, their main incentive will be to do less and take a fixed salary. If YouTube pays bloggers based

4:38 on views, it will incentivize them to spew crap, clickbait, and negative news because it will attract more attention. A new topic is UGC Creator. This is a little-known blogger with 500,000 subscribers, and you watch them because you don't perceive them as a blogger. You trust the crap they push because you think they're not Yura Dud, they don't have a million subscribers, and if they have 300,500,000, they're probably just an ordinary guy, just saying what he thinks. And this works super effectively because our mental model hasn't yet adapted to it. People see some little-known guy pushing some nonsense and believe them. They don't realize that this person is selling ass

5:23 for 3 cents, because humans don't understand that either. He says, "I'm a UGC creator, you're an idiot. They came to you because they trust you." They assume you're normal because you have a small following and haven't been paid for what you do, but you deliberately take money and push crappy ads. It's an assessment of intelligence. If we evaluate not how a person thinks, but how they pass tests, then the person will train to pass tests because they'll have the appropriate incentive system. Their incentive is to pass the test, not to be smart. Don't ask what you'll gain, ask what you'll lose. Every "yes" automatically has its "no." And if you've lost money, it can be compensated; you can earn it again. But often, a missed opportunity can never be compensated. It's already gone forever. This mental model is called

6:11 opportunity cost. The point is that all our resources are limited and finite. So, if you choose one thing, you always lose something else. For example, you're meeting with friends and discussing what we should build in the neighborhood next year. And you're like , "Oh, we'll build a stadium." But if you built the stadium, you spent your budget on it, which could have been spent on a hospital, roads, a school. So, yes, you got the stadium, but you incurred costs. By choosing the stadium , you lost a potential hospital, a school, roads. You have some money, you decide to buy an apartment. Yes, you bought it, but you didn't buy shares on the stock market, you didn't buy gold, you didn't buy Bitcoin, you didn't buy a business. By choosing one, you lost

6:56 another. You decided to watch a TV series for five hours. You watch the series, you find it interesting, but you wasted that time, or, say, you scrolled for five hours. You wasted that time that could have been invested in learning a useful skill, or playing sports. By choosing one thing, you incur a cost; you lose something else. And so you have to make a difficult decision: what should I do next in this complex simulation? Where should I go? This way and that, that way. And this, you see, is an opportunity cost. If I went there, I didn't go here. If I went there, I didn't go there. And you have to think, to accept. You have to evaluate not only in terms of what I could hypothetically gain there. You have to evaluate what I would lose by not going there. A stable past does not guarantee a stable future. If there

7:43 have been no disasters in the past, that does not guarantee that there will be no disaster in the future. This mental model is called the turkey problem. All his life, the farmer has come to the turkey and fed him and taken care of him. And in the turkey's world, everything is stable and good. And the farmer is a good guy who takes care of him. And then comes Thanksgiving. A farmer takes a big knife and goes up to a turkey and says, "Hello, turkey." This is called the turkey problem. The fact that everything used to be great, long-lasting, and stable—well, you probably all understand this now, yes, the fact that things were stable and good for a long time doesn't mean that it will always be that way. Why do I think the past, fat, plump, and peaceful, will continue into the future ? After all, historically, there have been many times when this was disrupted

8:28 . For example, the British colonies in the USA. For a very long time, the colonists considered themselves subjects of the British Empire, and everything between them was kind, homely. Until at some point, like with that turkey, everything changed. And from the British Crown's point of view, they were separatists. It was a civil war from the British Crown's point of view. And from the separatists 'point of view, it was a war of independence. But since they won, and the winner is always right, they say, "It was a war of independence, and now it's a separate country." But at some point, everything changed completely, even though there were no signs of it. And for a long time, everything was calm. And everyone in Britain thought, "Well, these are our colonies, these are our guys, and that's it." And it will continue to be like that. No, it won't. It happens, things like that happen periodically. Or, let's say, you invest

9:15 in some stock, some asset, hoping that it will always grow in the future, just as it always grew in the past. Why? Well, because everything was always good in the past. Okay, very interesting. But then it suddenly turns out that it was NRN, a company that scammed and people lost a ton of money. Why? Because, like that turkey, they thought, well, this is a reliable company, it's been around for many years. Everything was good in the past, so it will be good in the future. If someone put your food on the table overnight, which explanation is more likely? Was it a cat or aliens? A cat. And why? Because that solution is simpler. The more you complicate things , the more assumptions you add to your theory of reality, the less probable it

10:02 becomes. This is called Akama's razor. To make more rational, better decisions , don't overcomplicate things. Don't add complexity that doesn't explain anything. If your power goes out, don't check the wiring first, check the switch. If some politician makes some stupid decisions, assume it's incompetence, not a conspiracy theory. Because incompetence is a simpler explanation. Don't overcomplicate things. Will I stay in the game if things go wrong? You should ask yourself this question every time life offers you a very large win in exchange for a huge bet. Perhaps you should bet everything. And from the perspective of

10:50 this mental model called "Avoid Ruin," you don't need to bet everything. You need to imagine: "What if I lose? Am I even prepared for that?" If someone, say, puts all their money on a stock, it makes very little sense, because if the company goes bankrupt, you'll lose everything. Are you prepared for that, to be left with no money at all? Are you prepared for that? I have several examples of people pledging their homes to some projects, business ventures, and then something went wrong, they lost their homes and had to start over. I see they weren't prepared for that. And then life throws you some sweet, delicious opportunity where you can get a lot, but to do it, you have to risk your health, your relationships, your

11:37 capital. At this point, you have to think very hard. Maybe there's a small risk there, what you're being offered. Well, the stakes are very high. Yes, the risk is small, but the stakes are very high, and you really want it, and your hands are drawn to it, but always ask yourself. So, mathematically, the odds might be in your favor, it might all look good, but ask yourself: what if something goes wrong and I'm willing to lose what I've bet on? If you understand that you're not willing to lose it, you're simply not willing to lose it, it's too valuable to you because it will destroy you, then no matter how great it is, no matter how great the options are, just don't go there. Just don't go, because you're not ready for it. Wealth can be taken away, robbed. Wealth can be created. So

12:24 , there are, accordingly, two different games. There is a zero-sum game, where your win automatically means someone else's loss. This is politics, this is war, this is sexual selection, this is any sporting competition. Why? If someone wins a sporting competition, takes first place, then everyone else doesn't get it, they lose to them. It's zero-sum. If someone becomes president, then someone else doesn't become president. If someone has gained any power over you, then, accordingly, you have become less free. It's not zero-sum; it's where you collaborate, where you're engaged in entrepreneurship, where you've launched a startup, where you've started making new refrigerators, airplanes, cars,

13:09 whatever. Someone else gets something, but it's not bad for you because you're getting richer. You also get something. Both games play a role in modern society. You need to understand what games you're playing. In general, if you want to achieve good results in the long term, you need to play a non-zero-sum game, because all long-term results require a payment plan. Whatever you do, it's not just money, it's not just business, it's relationships, it's everything, education, anything at all. Good results are achieved when there's a payment plan, when you accumulate over a long period of time. To accumulate over a long period of time, you need to

13:54 interact with people over a long period of time, collaborate with them. For this to be sustainable over the long term, it has to be non-zero-sum, because then the effects accumulate. The longer you interact with someone, the more they trust you and the more you can do with them. But you have to understand that there's another side to the coin. There are politicians, there are wars, there are competitions, there are groups of people who will eat you up. If you come to cooperate with them, not realizing you're in a zero-sum game , they'll simply eat you up. We're not considering the ethical issue here, what's good and what's bad. Systemically, zero-sum thinking doesn't work well because they don't create resources and can't create them, even if they really wanted to. They can take them away, redistribute them, and then pretend they're such great guys, great

14:40 people, who did everything. But in reality, it's always the creative class that does the work, the ones who come up with everything, the ones who are exploited by these guys who take everything from them. But the point is that these guys, the so-called creators who play beyond zero-sum, are more effective and produce systematically. They produce, they are creators. And they produce effectively because in a non-zero-sum world, they collaborate long-term, and the more time you have, the more effective you are in this collaboration. They create, but these guys can't create because they take from each other. They aren't designed to create. These guys are. Therefore, the model of selection doesn't work well in modern society, where we've learned to effectively create new resources. Astrology is a scam. All

15:29 astrologers are frauds. Popular psychology is a scam. Half of psychologists are frauds. Trading is a scam. Those traders who sell training, as a rule, on trading—they are all frauds. Because a theory is only scientific if it is falsifiable. If there are any conditions under which you can prove this theory false, and we can't apply this to popular psychology, astrology, or trading, because any damn result can always be explained because of Mars and Venus, or Heads and Shoulders—that's how it happens, everything will be explained. Any result will always be explained, it's unscientific because it's not falsifiable. Flat Earth. For example,

16:14 we have a flat Earth—it's a theory, it's a scientific theory. Are there any conditions under which you can prove it , falsify it, prove it false? If you can go ahead and come to the other side , you can prove that the Earth is not flat, but round. This means the flat Earth theory is false, but it is scientific. There are conditions under which you can prove it false. And we have a theory that small objects are attracted to large objects. They are attracted. Can we falsify that? We can, if we prove that objects will repel, not attract. An astrologer, no matter what's going on, will explain it to you with the special positions of Mercury, Venus, and all this palmistry stuff. Psychology is more complicated. There's

17:00 real psychology, where there's real science, and where there's falsification. Well, for example, there's cognitive psychology, where they study learning processes. I specifically said popular psychology. This is basically all the stuff that Freud invented back in his day to make money. No matter what happens, some people say the opposite. Someone beats children and says, "That's bad." Another says, "No, fine, they'll grow up okay." It's all just for the sake of talking. Everyone talks. Tracing is the same thing. There, things go wrong, heads, shoulders. Why? Because I can see the future by looking at the lines in the past. What do you see there? Don't confuse it. Technical analysis is fundamental, and it really does work fundamentally. If some companies open, they're producing something, and that will impact the economy. But if nothing

17:45 fundamental has happened, just technical stuff—heads and shoulders, lines drawn—always look at the incentives. Don't look at what they tell you. Always look at what they're getting paid for, what their incentive is. Do you seriously think he's a billionaire? And he's like, "Oh, I want more billionaires, I'll teach them." If he were a billionaire, he'd be living his wonderful life and wouldn't be doing any of this. He's not a billionaire. He's telling you this to make money off you. If you want something done well, do it yourself. If you want it done poorly, hire someone else, delegate it. And now everyone's shouting about delegating, but no one's talking about the principal-agent problem. If you're raising your own child, this is very important to you.

18:31 You'll put more effort into it than some random person, than some hired nanny who pretends to be looking after your child. She'll pretend to be looking after him until you go outside. Then she immediately picks up her phone , and she's looking after her phone, not your child. If you're a business owner, if you're risking your own resources, you'll perform any process much better than the person you delegated it to. When the owner opens a business, for example, a coffee shop, if he works behind the counter himself, he makes two or three times more checks than when someone else works there. Why ? Because he's very interested. It's his own money, his own responsibility. He smiles at everyone, he's very attentive to all potential customers.

19:17 He does everything he can, he analyzes what's going on. He's highly motivated because it's his money, his risks. He's very responsible. But if he leaves some hired girl there, she'll be on her phone, she'll be faking it, she'll definitely be less effective. Why? Because there's an asymmetry in risk, resources, and responsibility. This process can be managed one way or another. If you've completely given up on it, quit, then be prepared for disaster. To develop, a person must suffer. As a rule, at any point in your life, you have a choice: run downhill or run uphill. Always choose to run uphill. That is, if you have a choice between suffering now or suffering later, it's always better to suffer now

20:03 than later. Everything that's most rewarding and valuable in your life requires a long-term plan, when you've been accumulating something for a long time. This applies to your well-being, your money. This applies to your health , this applies to your relationships, this applies to your knowledge. To get something later, you need to suffer here now. If you look at this as a mental model, it's called: "Run uphill. " Choose to suffer now. If you choose not to strain yourself and not suffer, then you're running downhill. Then, when I was 30 or 40, I decided to take up sports; at 50, oh, I decided to focus on my education. I see a lot of this. It's too late, my dear. You have to choose. The sooner, the better. Because when you choose to run uphill at the beginning, you'll run higher and feel better. You'll know more, you'll

20:50 have better health and better relationships. It's easier to sit down to something tasty, and if you include something, you scroll, it's generally nice when you need to go to the gym. You sweat, you strain, it's hard, your muscles ache afterwards, but your insulin sensitivity returns, your body looks better, it functions better, you feel healthier. In the long run, you don't suffer because you suffered a little bit in the past. You made the right decision, and therefore you don't suffer in the future, while those overweight, semi-invalids around you. And you made the right decision because you chose to run uphill instead of downhill. Universality is impossible. The same approach can work well in one system and very poorly in another system, in a different environment, or not at all. If you judge people by what

21:37 they post on social media, you'll go crazy. My God, everyone around you is so successful, so beautiful, so enterprising, so productive, because those videos that show this whole fake thing get more views and likes. Natural selection works this way. It's not true at all. The winner is what gets the most likes and views, because natural selection is based on a system with its own rules: it's not the best product that wins, no matter what you buy, from food to clothes, but what sells well, because there's a corresponding selection process underway in a corresponding system where you can influence the majority of people's decisions through influencers and marketing. Some things are better adapted to the current environment, to

22:24 current conditions, but that doesn't mean they'll be successful in different conditions. You need to ask yourself: is this rule, this model of behavior, really good for me, or is it just something that spreads well within the existing system? The most dangerous habit is continuing to do what's previously brought success. Our surrounding reality is constantly changing. Especially now, with the advancement of technology, everything changes incredibly quickly. And if you continue to do what you've always done without taking into account the changes that have now occurred, then failure awaits you. Everything will be very bad . When change happens, you have to adapt. Those who adapt to change better survive. Those who adapt poorly survive

23:11 poorly. Those who don't adapt die out. Even though Kodok had one of the very first patented digital cameras, they didn't adapt to the new market, and that's why they died. Nokia was the coolest phone, the most popular on the planet. No one could have imagined that we would end up where we are. They lost this evolutionary race because they didn't adapt. Amazon is a good example of adaptation. Amazon changed its business model. While Jeff Bess initially sold mainly books, he later created a global marketplace that began selling not only books, but everything. What do I need to change to continue to survive in a changed environment? This is the main question you must ask

23:57 yourself as the world around you gradually changes. Money makes money, and the money made by that money starts making its own money. This is the principle of compound interest, a mental model. Interest starts earning interest on its interest. This is the mechanics of compound interest, and it works not only in finances and money, but also in relationships, skills, and health. In the beginning, if you practice here or there 2-3 times, or 10-20 times, you'll get one result. But if you practice for years, the result will be completely different. The longer you build long-term relationships with people, the greater the level of trust between you, and the more you can cooperate, the more you can trust. How did you go bankrupt?

24:43 Well, at first everything was very slow , and then everything happened very quickly, instantly. This is an example of how the accumulation of critical mass works. Many processes in our lives happen unnoticed, but gradually accumulate, until at some point, bang, and everything happens very quickly. What threshold must be crossed for the process to begin to sustain itself? You've opened a restaurant, and until your restaurant reaches a critical mass , no one goes there. But at some point, when critical mass is reached, when enough tables are occupied, everyone suddenly starts flocking in because everyone is there, the critical mass, the language, the social norms, the epidemic, have all been reached. This cumulative effect takes a long time, and it's unnoticeable. Then, bam, the Type-C standard. The moment so many

25:30 people started using this standard, critical mass was reached, and all the other companies and equipment manufacturers switched to it. Starting something new is much more difficult than continuing the old. Any system, from your psyche and your body to the state, protects its past existence. Any system. This is called the mental model of inertia. That is, what we did before , what the system did before, is very easy to continue. It's very difficult to change this because inertia pulls us . It's like a ship, a very large one. It's very difficult to change its course, its direction is very difficult . And if we want to change something in our own lives, for example, we want to form some new habit, we must understand that there is such powerful inertia

26:16 there, so we must simplify, we must first form a habit, which will then do everything else. And what do we do for this? We can't just up and turn this ship in the other direction. Inertia will not let us do that. Accordingly, we must think about how to turn it little by little. We start with 2 minutes. With 2 minutes. I don't like this at all. But I understand that I need to do this with my brain. I understand. Although inertia tells me: "No, man, go ahead, don't do it, go and watch something interesting later, don't do it." But I understand that I need this. Inertia pulls me there, and I need to go there. I understand that I can't do it right away. So I tell myself: "Here are 2 minutes." Look, Denis, 2 minutes are nothing. You can allow yourself 2 minutes. And your goal isn't to read in a foreign language;

27:03 your goal now is to become a person who reads in a foreign language. That's why 2 minutes is now forming a habit. 2 minutes is nothing. So, with such powerful inertia, you can allow yourself 2 minutes because it's not enough. And so, little by little, 2 minutes. 2 minutes, then 5 minutes, then 10 minutes. Do you understand how it works? Inertia won't let you do what you need to right away. And you have to change this direction little by little, little by little. What past decisions are preventing the system from deviating from its path? When evaluating any system, you need to evaluate not only its current state, but also its history. Why did it end up in this state? Because what happened to it before, the decisions that were made

27:48 , they greatly influence what is happening now. And changing this is often very difficult. For example, the QTY keyboard on our computers is standard. And now try to abandon it. When every typewriter and every computer on the planet uses this standard, it's very difficult. This is an example of pastance. The rut has already been established, and no one wants to change it. Because if you, say , change the keyboard, even for a more comfortable one, people won't buy from you because people have already become accustomed to the corresponding layout. What past decisions prevent the system from deviating from this path? My first job, where I gained relevant experience , and now I can't learn anything new. The keyboard layout, the corresponding policies, the railway along which

28:33 cities were built. There are certain past standards, past events, past actions that prevent me from deviating. By solving one problem, you can very easily create two new ones. Because of unforeseen consequences. For example, when the British occupiers decided to reduce the cobra population in India, they offered local residents money for cobra corpses. This led to the locals starting to breed cobras and bring the corpses to the British. An attempt to solve a problem led to unforeseen consequences and created a new problem. What new problem could this solution create? If we create antibiotics and start feeding them to people, this will

29:20 lead to the development of more resistant, stronger bacteria. We ban alcohol in some country. This could suddenly lead to the emergence of a black market for alcohol, which will fuel professional crime, which will cause us a lot of problems overall. In other words, we solve one problem, but if we don't understand the potential consequences, we could end up with many more problems than we initially had. The outcome isn't always proportional to the impact due to the nonlinear effect. This is also a mental model. You can work very hard and get nothing or very little. But there are processes where a small amount of effort, a small contribution, and a very large result are possible. One snowflake can trigger

30:05 an avalanche. The boiling point of water rises, the temperature rises, then bam, suddenly everything boils. Your education, your learning, is linear, linear, and then bam, you suddenly understand the subject. Look for processes where small steps, small efforts, can achieve disproportionately large results. The less you understand a subject, the easier it seems because of your circle of competence. People tend to misjudge it. They think they understand and know more than they actually do. The extent of the knowledge within your circle of understanding isn't as important as knowing the boundaries of your circle of understanding. Because if you don't know where the boundaries of your understanding are, you'll get into trouble. Good, successful bodybuilders

30:53 tried to open their own gyms because they misjudged their circle of competence. They thought, well, since I work out with the machines every day, I'll be a good entrepreneur, I'll be able to run this business. However, these are completely different things. Every consequence has its own consequences, which are called secondary consequences. You've come up with something, you've done something, the situation, people, and the market have adapted, and you think it'll stop there? No, it won't. There will be secondary consequences. For example, you subsidize single mothers without fathers so they can raise their children. You provide money for this. You think, "Oh, you're such fixers, such fixers." But this leads to women not wanting to have children within marriage, because if they do, they

31:39 won't receive benefits. Consequently, these are all unhappy people who give birth outside the family, and their children grow up without fathers, because you're such fixers. You've considered the primary consequences, but you haven't considered the secondary ones. What will happen next, once people adapt to the corresponding changes? You need to ask yourself this question in order to effectively assess what will happen and how. For example, you cap the minimum wage, and therefore , when the economy starts to contract, the employer can't pay the employee less than the corresponding wage. What will this lead to? Well, you seem to have helped the workers, but you haven't helped at all, because the employer simply won't hire that worker, because there are no fools to pay. When they don't do the work for which the

32:24 employer is supposed to pay, and they're forced to do so by the minimum wage, they can't pay less. Consequently , they simply won't hire anyone, and unemployment will set in. This is what happened during the Great Depression in the United States. Secondary consequences. We're so good, we decided , we obliged employers to pay. Okay, you solved the problem, but secondary consequences occurred. Employers stopped hiring, unemployment and hunger set in. Or a positive example. You went to the gym, and now your whole body aches, it feels like, oh my God, what's going on? Well, that's the primary consequence. Then your body adapts, and a secondary consequence occurs. It becomes stronger. In your next workout, you can do more than you did before. So , secondary consequences can lead to something good, or they can lead to

33:10 something very bad, but they need to be analyzed. First, ensure survival, then ensure the jackpot. This is called the dumbbell strategy, when you risk 10%of your capital and don't risk 90%. So, you ask yourself, "How can I organize everything so that where there's a potential jackpot, I only risk 10%, and here, where it's safe, I have 90%." It's called a dumbbell because it looks like a dumbbell. On the one hand, you have a huge potential to win a lot, you must be prepared to lose everything, but here you only have 10%. That's not critical. And here you have 90%, which will save you if you lose those 10%.

33:57 The best risk is where there's a small potential loss and a potentially very large gain. This can be used not only in finance and investments. It can be used in startups, in business, in learning new skills. For example, you work in a certain profession, you're doing something, you can dedicate 10%of your time to learning a new profession, a skill, a new language. If it doesn't work out, no big deal. No big deal, because the main job, 90%of the time, remains the same. But if those 10%pay off—for example, you learned a skill on the side—yes, you invested some time, well, a little, you learned a language, you learned a skill, and then , in a sudden change in the situation, it's the jackpot, and you win big.

34:44 Every major tech company has huge budgets set aside for experimentation. In raw numbers, this could amount to hundreds of millions of dollars. But if we look at what portion of the budget, of the capital, it's rarely more than 10%. This is a deliberate risk the company takes. They test various services, various areas. Meta, formerly Facebook, does this very intensively. Amazon does this very intensively. They literally spend a ton of money. And this is Intel strategy in its purest form. They take this 10%budget and spend it on experiments, experiments, experiments, because the probability of winning is staggering. And if nothing works out, which is what most often happens? Jeff Bess says, "Well, how much further ahead am I, he says? How much more do I have to spend?" What

35:32 will a person lose if their decision turns out to be wrong? It's called the Skin in the Game model. Skin in the game. That is, if a person doesn't risk anything, which is very common among politicians—they regulate and pronounce things, but they themselves sit warm and comfortable—then they can't be trusted. You should trust the captain who is the last to leave a sinking ship, that is, the one who is on the ship himself. You should trust the restaurant owner who eats in his own restaurant. You should trust the investor or fund manager who promotes an asset, but is deeply involved in it themselves. That is, they are buying it . Someone who is responsible for their recommendations—skin in the game, with their own skin—they are invested

36:17 in it themselves, they are with you— then you can trust them much more than someone who just blah-blah-blah, but doesn't do anything themselves. Which is better: launching a restaurant or launching a mobile app? It's imperative to consider the mental model of scalability. A restaurant doesn't scale well because it's a physical, offline location, with a limited number of seats and a limited number of customers . So, there's no scalability. But if we're talking about a mobile app, a lot of people can use it. There's no limitation like with a restaurant. Can the results grow without a proportional increase in my costs to achieve them? That's the question you need to ask yourself. A book is written once, and

37:04 then it can be sold indefinitely, especially if it's an online book. Scalability is better. Computer code is written once, and then it can be sold indefinitely. Some kind of training— let's say you're a music teacher—you go out and physically teach music to people. That doesn't scale well because you're limited by your body and your time, and you can't work with a large number of clients. But if you're releasing an online music course, then the scalability is incredible. You can sell your music course to hundreds and thousands of people, but here you can teach, well, 10 people a day maximum, and here it could be hundreds and thousands of people. What can break this system? Your main question.

37:52 Fragile is where there is no safety margin. It is where there is disproportionate damage from uncertainty or some bad event. For example, a glass cup or a glass. If they fall, they break; they are fragile . Why? There is no safety margin. If this cup or glass is metal or wooden, they fall, they are intact. There is a large safety margin. If you have a single supplier, then you have no safety margin. Something is betting on their immortality. Something happened to your supplier. That's it, hello. Bye . This is what we had when, remember, the ship blocked the strait, and we had a global crisis across the planet, because everyone was hoping for supplies that never arrived. This is a

38:38 fragile system. It only exists in a world where everything works reliably. It's a little unstable; everything works out when you rely on one supplier , one service, one client. It's all very fragile. Efficiency is often bought at the expense of fragility. That is, to increase margins, we don't maintain our own warehouses. We rely on everything to arrive on time. It's cheaper for us, it's easier for us, and we make more money. But our system is super fragile, it's super unstable. When evaluating your business or someone else's business, whatever you do, ask yourself: what's the most fragile here? What could break the entire system? The best plan is when you have many different plans. What can

39:25 I do today to have more options tomorrow? This is your main question. Don't try to guess the future. It's chaos. In this game, it's hard to understand what will happen tomorrow, much less the day after tomorrow. But the more options you have, the greater your opportunities. What will I do if tomorrow they tell me, "I have to work for food?" What am I going to do? Wipe and listen? Yes, if you have no options , if you don't have a safety net, you'll wipe and listen, you'll suffer, you'll be in pain. Have only one option and pray for it. Pray for your employer , pray for your lords that everything will be alright. Then you're as vulnerable as possible. You're completely dependent on them. They can do whatever they want with you, as always happens. You can change jobs, you can change your place of residence, you can change countries. What can you

40:12 do if something goes wrong? And as experience shows, something can go wrong very easily. You have options, you should have spare money, you should have, ideally, different sources of income, you should have different professions and skills, so that if things don't work out, you can work there. It's very important to know a foreign language. Well, at least English, because half the planet speaks English, because it's about freedom and versatility. You can go to another country and somehow get by. If you don't know the language, well, you have no options. It will be difficult. I might earn less at that job, but I'll have more free time, which I can use to master this or that specialty. That is,

40:59 in terms of variability, there are more options, more survivability, better progression. Evaluate reality from a perspective that gives you more. You can't predict what will happen anywhere . They will always get around you, believe me. What to do with all this now? You must learn the process of making more balanced, rational decisions that will allow you to play this world more effectively. I see two main recommendations for how to develop these mental models and begin to actively use them in your life. First, when you look at or read about a mental model, look for examples from your own life. That is, it's not about simply

41:44 receiving this information or learning what a mental model is. Stop and extract the existing network from your head. Think about which specific examples of this model you can come up with. Extracting makes your brain work. And when you use what you already know, the network, with what you just heard, or what you will read in the future about mental models, you can interweave these networks, and this becomes a new you. It becomes part of you when you interweave one with another. This is your new brain, this is your new knowledge, and this is a new you. The second level is when you make decisions about your own life. Find which mental

42:30 models are simultaneously active here. You need to make a decision. You're thinking, "Aha, so what's this? What kind of situation do we have here? What are this guy's real incentives? Can we trust him or not? What is he really like, and how does he make his living? Should I believe him or not, and why? What other mental models are involved? First, we look for examples, absorbing all this information. Second, when assessing our own lives, we look for several mental models that operate simultaneously. What I've told you today is about twenty mental models. In fact, there are many more. I've created a corresponding deck for MMDMO app users. You can work through a larger number of these mental models there. If

43:17 you're interested, the link is next to me. But that's all I have for today. Thank you for your attention. I wish you good luck, success, and may the force be with you, friends.