Mental Model: Inversion
Inversion also known as the ‘Jacobi principle’ is a powerful Mental Model which helps you solve difficult problems faster and easier.
The mental model requires you look at things from a different perspective to gain unique solutions.
Charlie Munger, the billionaire who helped push mental models into the mainstream, explains inversion like this:
“You just twist the thing back around and answer it that way.”
You start from the opposite end of the problem, going from B to A instead of the linear A to B most people are taught.
Here is an example Charlie gave to his children.
“There’s an activity in America, there’s a one-on-one tournament. And the national champion became the national champion on two separate occasions, 65 years apart. Name the activity.”
– Charlie Munger
According to Charlie, only 1 out of 8 of his children could answer this riddle.
Most couldn’t even get close to the right answer.
The PH. D Physicist of the bunch was able to answer the question quickly through leveraging the inversion mental model.
“What he did was he just turned it around, he said it cannot be athletic and he realized that no 85-year-old was ever going to win an athletic thing with the neurological and other deteriorations…He realized that no 85-year-old was ever going to be the US chess champion- he knows what a chess tournament is like. But that led him to checkers, a game that you could almost master with enough experience and of course that was the correct answer. Took him about 15 seconds”
– Charlie Munger
Inversion’s roots come from mathematics; a world where inverting a problem often leads to easier solutions.
If I ask you to calculate
4% of 25
You might struggle to give me a solution.
Perhaps you will need to grab a pen and paper to perform the calculation.
Did you know that 4% of 25 is the same as 25% of 4?
25% of 4 is 1 which is much easier to calculate in your head.
This is inversion at work.
The famous mathematician Carl Gustav Jacob Jacobi would tell his students,
“man muss immer umkehren”
Which means ‘invert, always invert’.
Inversion mental model Examples
Below are some examples of how the Inversion Mental Model can be leveraged in several areas of life. This mental model is not limited to just these areas but the examples will help open your mind to the possibilities.
Inversion Mental Model in Life Design
Life is but a game.
A series of sequential small bets which result in a particular trajectory.
Who should I marry?
When should I have kids?
Should I even get married?
What career should I pursue?
Should I quit my job and start a business?
We all must answer a plethora of questions along the journey.
This is the necessary work when optimizing for happiness and fulfillment.
How can we ensure we make the right decisions?
A good place to start is through studying failures.
Use the Inversion Mental Model to see what should be avoided so you don’t end up making any catastrophic mistakes.
It can help avoid Multiplying by Zero (A mistake where you can’t come back).
One of Charlie Munger’s favorite quotes is
”All I want to know is where I am going to die so I never go there.” (also the name of Peter Bevelin’s amazing book on mental models)
The idea is to think of what can wrong before it happens so you can avoid failure.
When you look at people who do not have the happiness you want you can find common trends.
Unhappy people tend have marital issues.
They are addicted to drugs and substances.
Many are living a life which their parents wanted for them but ignoring their soul’s desires.
They have money issues.
These people have poor diets, struggle with obesity and don’t get enough sunlight.
Often unhappy people do not have a creative outlet and live their whole lives in the socially conditioned machine (read the manifesto to learn more).
When you learn to study failures (which are plentiful), you can design your life to avoid the landmines which destroy many people’s dreams.
You simply do the opposite of what unhappy people do to ensure you are better off.
You figure out where you are going to die and never set foot anywhere near that place.
A good place to start is by reading Bronnie Ware’s book ‘The Top Five Regrets of the Dying’ and do the opposite of everything she lists.
Inversion Mental Model in Stock Trading
“Rule number one: don’t lose money. Rule number two: don’t forget rule number one.” – Warren Buffet
When most people dabble in the stock market or crypto, they quickly look for investments with high returns.
That’s the point, right? We want to make some freaking cash!
Warren Buffet and Charlie Munger invest differently.
They entertain only investments with a large margin of safety.
Investments they understand from businesses which will likely look the same 20 years from now.
This is a big reason they love Coke.
Coke’s formula can be copied or made better easily.
Let’s be real, it’s not groundbreaking.
They have done blind taste tests and most people believe Pepsi tastes better than Coke.
Yet Coke is bigger than Pepsi.
Coke has something over other soft-drink companies.
It has brand loyalty and large distribution networks which reach the most remote countries.
The word ‘soft drink’ in some countries is unanimously referred to as Coke. (My fellow Zimbabweans can attest.)
The brand has been blasted into the collective psyche and is unlikely to fumble anytime soon.
These investments likely won’t die and almost guarantee returns.
The best way to make lots of money over the long term is by not losing money.
Avoiding the Black Swan events which engulf many.
Staying away from folly.
Munger and Buffet use inversion to look for investments with asymmetric returns relative to potential loss.
This type of investing is about knowing where your money is going to die so you can avoid that investment.
Inversion in Dieting
Elimination diets use the inversion mental model in an interesting way.
Typically, when starting a new diet, you follow set guidelines on what you should eat.
If you are jumping on a keto diet, you are increasing fats and drastically lowering carbs.
If you go vegan, you are eliminating meats, dairy, and eggs, and increasing your intake of vegetables, fruits and nuts.
Carnivores are opting in for two ribeye steaks not just one.
Each diet has specific guidelines you must follow for you to gain the best results.
Elimination diets work differently.
Instead of adding new foods to your diet you eliminate them.
You look at different food groups, for example:
- Tree nuts,
- Red meats,
- White meats,
- Starchy vegetables,
- Leafy vegetables,
And eliminate one group at a time while measuring how you feel.
If you feel better without the food group, you can simply eliminate it from your diet.
If nothing changes or you feel worse without it, you can re-introduce it.
These diets are a good way to find hidden allergies.
That’s right, the inversion mental model can even help you become healthier.
Inversion in Marketing
Copywriters are marketers who write the sales copy and video scripts for advertisements, sales pages and order forms.
They are an integral part in any direct response business.
The job of a copywriter is to persuade consumers into purchasing a product.
Copywriters leverage the inversion mental model when writing their copy because they need to constantly think about the client’s objections.
Many copywriters and sales professionals create a list of expected objections and create counter arguments.
For example, a salesperson selling solar panels might face the objection,
“The installation is too expensive for these solar panels, it’s out of my budget.”
To which they can reply with,
“We have payment plans to make it more affordable. The government also gives loans to first-home buyers to help you out with this. Also, keep in mind the cumulative cost of your electricity over the next 3 years will be far more than this installation. Would you like me to show you the math?”
Good salespeople always think through the lens of the inversion mental model.
They remove themselves from their own limiting frame of reference and put on a different lens to see the world from the prospect’s view.
This is inversion 101 and it can make you a lot of money.
How to use the Inversion Mental Model
There are a range of ways to use the inversion mental model. Below are some practical techniques you can start using today.
1.Make a list of how you will die
In this step you will need to create a list of things which will lead to your demise in a particular endeavor.
You want to start a new car repair business. How will it die?
- Bad location with no traffic
- Unreliable or barely qualified employees
- Competitors across the street
- Sketchy accountant who butchers your taxes
- Bad marketing
- Expensive overhead
- Machine failures
2. Study other failures and add to your list
You will research how others have died chasing this dream. Look for patterns which keep showing up and don’t concern yourself with freak accidents. Perhaps someone’s car repair shop blew up due to a local arsonist (this shouldn’t concern you).
In your search you will find things you didn’t think about, so make sure to add them to your list.
- Failure to renew relevant license
- Not paying tax to local mafia
3. Make plans to avoid death
Next you will consciously go through the list and think of ways to eliminate the issues or mitigate the damage they deliver.
Problem: Bad location with no traffic
Solution: Look only for warehouses with proven traction, find relevant data, talk to other business owners in potential locations or pay a kid to count how many cars go past the street in 3 hours.
You would do this for all the problems you find in your list.
This analytical approach will drastically increase the likelihood of you succeeding in your project.
The above example will require more time, but other problems in your life can be resolved by applying the inversion mental model in 2 minutes or less.
Question: Should I drive home after drinking?
Inversion: I might die and kill innocent pedestrians.
Solution: Catch Uber or don’t drink.
Doing these mental calculations will help you avoid multiplying by zero in your life and will lead to better solutions.
The Inversion Mental Model is incredibly simple.
Take a few minutes before embarking on an important project to consider how it might fail.
All you need to know is where you are going to die then simply avoid the location.
Read the complete Mental Model guide to learn more valuable thinking tools.
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