Ideal Mental Models for Clear Thinking- Compounding Knowledge

Compounding knowledge is a mental model rooted in the economic concept of compounding interest. It can be understood as the growth that emerges from your previous growth. The framework is not only applicable in your investments, but it can also be applied to your business, relationships and knowledge.

People are always on the verge of consuming information. What they fail to realize is that most of them consume expiring information. This is something that Warren Buffett strives to steer away from. Instead of focusing on consuming information that is not important, Buffett focuses on equipping himself with the knowledge that would help him manage his companies successfully. The idea here is to learn something new that would bring about a positive change in what you do.

Gaining and gathering information from time to time will undeniably lead to compounding benefits. Learning something today and combining it with something else that you learn on the following day will make you a better person. Filling your mind with expiring information that is of less importance is easy, but the reality is that it will not help you in days or months to come.

So, how do you tell that you are consuming expiring information? Information that is marketed to you is not as useful as you might think. Also, if you find that the information lacks meaning and that you can easily consume it, then chances are that the information is not credible. In addition, you will soon realize that it will be irrelevant after a short while. Take, for instance, the habit of watching the news and keeping yourself updated on what is going on around you. Doing this only fills your mind with expiring information. Why don’t you spend this time garnering knowledge about things that will help you in years to come?

Of course, we are not saying that we should copy the likes of Warren Buffett, but it is important that we acknowledge how these models have helped people to succeed in their lives. Accordingly, there is a lot that we can learn from how they choose to use these models.


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