The Art Of The Good Life – Action Points

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The Art Of The Good Life is an excellent book. I’ve read the book twice already. It makes a perfect companion for bedside reading. Filled with plenty of mental models, I have listed five of them which can be implemented immediately in our lives.

Mental accounting

The idea of mental accounting is to learn to interpret facts in a way which would not infuriate you. For example, when we recently travelled, we ended up paying 100 Euros in traffic fines in a European country. A taxi driver cheated us and didn’t return the change. Instead of getting furious and ruining the trip, we always provide for such extra expenses in the overall cost of the trip. Result? We don’t let such events annoy us.

The stoics have spoken about a similar concept called negative visualization. If we can occasionally visualize that the things we own may be taken from us someday, we will learn to appreciate what we have instead of wanting new things. This practice also allows us to learn to live with what we have and maintain our distance from the hedonic treadmill of instant gratification.

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Circle of Competence

It simply means doing things you understand and staying away from those you do not. I do not invest in direct stocks. I do not trade in the markets. I don’t give medical advice. I know my limits. I only play games where I have the aptitude and where I know that I’m going to win.

Use pledges instead of commitments

Pledges are inflexible commitments. By taking pledges in life, one can avoid decision fatigue. Pledges require you to be determined. I can expand my circle of competence and undertake direct investing and trading. I cannot do a certain thing if I’ve pledged against it. To think of it, one could take the following pledges.

  1. No smoking in any form.
  2. No desserts instead of being selective about them.
  3. Weekends to be spent with family. Work can wait for Monday.

Black-box Thinking

The black-box in a flight is a recorder which helps the airline industry to learn from accidents. They use it to avoid making the same mistake ever again. A similar approach could be adopted in our lives with black-box thinking. Before making any big decision, write down the thoughts leading to the decision. Later, reflect on what went wrong and what went right. Try to fix the mistakes in your next big decision.

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Five Seconds Rule

Learning to say no is a skill. Before saying yes to anyone, allow yourselves five seconds and consider if you would do it if you were to do it tonight. If not, just say no. It’s very powerful. Spare yourself from unnecessary commitments. Unless you can say ‘Hell Yes’, it must be a no.

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Contrarian Living

Contrarian Living

You are being taught the wrong things about money. I learn and share ideas to change the way you think about money.
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