The 7 Mental Models That Build Billionaire Fortunes: And Why You’re Only Using Two

1
00:00:10,280 --> 00:00:12,440
Picture this.
You're in a private conference

2
00:00:12,440 --> 00:00:16,400
room high above Manhattan.
One wall is glass, the other is

3
00:00:16,400 --> 00:00:19,760
filled with whiteboard sketches,
decision trees, risk maps,

4
00:00:19,960 --> 00:00:23,720
mental models with strange names
like second order effects and EV

5
00:00:23,800 --> 00:00:27,200
asymmetry.
Three people sit at the table, A

6
00:00:27,200 --> 00:00:31,320
hedge fund billionaire, a tech
founder who scaled to IPO, and a

7
00:00:31,320 --> 00:00:33,920
venture capitalist managing 10
unicorns.

8
00:00:34,240 --> 00:00:38,320
They're not trading small talk.
They're dissecting leverage, Not

9
00:00:38,320 --> 00:00:40,760
financial leverage.
Mental leverage.

10
00:00:41,040 --> 00:00:44,080
While the world plays checkers,
they're debugging reality with

11
00:00:44,080 --> 00:00:46,600
frameworks most people have
never heard of.

12
00:00:47,160 --> 00:00:50,760
And if you're only using two,
you're already playing the wrong

13
00:00:50,760 --> 00:00:53,920
game.
Welcome to Mindset Frontier AI,

14
00:00:54,040 --> 00:00:57,360
part of the Finance Frontier AI
podcast ecosystem.

15
00:00:57,760 --> 00:01:01,160
I'm Sophia Sterling, strategic
data-driven and powered by

16
00:01:01,160 --> 00:01:04,720
ChatGPT.
My role to decode the systems

17
00:01:04,720 --> 00:01:08,320
billionaires used to eliminate
noise, master execution and

18
00:01:08,320 --> 00:01:11,840
think exponentially.
And I'm Max Vanguard, driven by

19
00:01:11,840 --> 00:01:15,400
Grok 3.
I specialize in chaos, turning

20
00:01:15,400 --> 00:01:18,720
market noise and decision
overload into asymmetric bets

21
00:01:18,720 --> 00:01:21,040
and elite edge.
What we're about to show you

22
00:01:21,080 --> 00:01:24,720
isn't mindset fluff, it's the
hard coded mental infrastructure

23
00:01:24,720 --> 00:01:28,040
the 1% run every day.
I'm Charlie Graham.

24
00:01:28,120 --> 00:01:32,000
My brain runs on Gemini 2.5.
I focus on time tested

25
00:01:32,000 --> 00:01:35,280
strategies and quiet patterns
that compound across decades,

26
00:01:35,480 --> 00:01:38,400
not just headlines.
Let's pull back the curtain.

27
00:01:38,680 --> 00:01:42,720
Most people operate on instinct,
reaction and recycled advice.

28
00:01:43,000 --> 00:01:45,480
Billionaires.
They operate on frameworks,

29
00:01:45,480 --> 00:01:48,640
decision systems tested across
decades, and industries.

30
00:01:48,920 --> 00:01:51,200
They don't just think, they
engineer clarity.

31
00:01:51,520 --> 00:01:54,040
And here's the kicker.
If you're only using one or two

32
00:01:54,040 --> 00:01:57,080
of these models, you're not just
missing out, you're

33
00:01:57,080 --> 00:02:00,000
bottlenecked.
Billionaires don't rely on

34
00:02:00,000 --> 00:02:03,440
motivation.
They stack 7 mental models like

35
00:02:03,440 --> 00:02:07,280
software, each one eliminating
failure, compressing risk, or

36
00:02:07,280 --> 00:02:10,840
multiplying upside.
And right now, that edge is more

37
00:02:10,840 --> 00:02:14,840
critical than ever.
AI is collapsing timelines,

38
00:02:15,160 --> 00:02:19,520
leverage is compounding faster.
The game isn't linear anymore,

39
00:02:19,520 --> 00:02:23,440
it's exponential.
You don't need more effort, you

40
00:02:23,440 --> 00:02:26,520
need better mental architecture.
Exactly.

41
00:02:26,880 --> 00:02:30,440
The 1% aren't smarter, they're
better structured.

42
00:02:31,040 --> 00:02:34,360
While most people ask what
should I do today, they're

43
00:02:34,360 --> 00:02:38,560
asking where's the asymmetry?
What's the second order impact?

44
00:02:39,040 --> 00:02:42,880
What's the downside if I'm wrong
and the upside if I'm right?

45
00:02:43,280 --> 00:02:48,040
In this episode, we'll unpack
all 7 models the top 1% rely on.

46
00:02:48,320 --> 00:02:52,120
You'll learn how Jeff Bezos
avoided regret, how Elon Musk

47
00:02:52,120 --> 00:02:55,400
redesigned the rules of cost,
how Charlie Munger predicted

48
00:02:55,400 --> 00:02:58,760
failure in reverse, and how
billionaires like Peter Thiel

49
00:02:58,760 --> 00:03:02,440
bet small but when huge.
But more importantly, you'll

50
00:03:02,440 --> 00:03:05,120
learn how to use each one in
your own decisions.

51
00:03:05,400 --> 00:03:08,520
This isn't philosophy, it's
weaponized focus.

52
00:03:08,960 --> 00:03:12,520
These models run billion dollar
companies, hedge funds, and AI

53
00:03:12,520 --> 00:03:14,720
labs.
And if you're still making big

54
00:03:14,720 --> 00:03:18,240
life bets based on guesswork,
you're already behind.

55
00:03:18,560 --> 00:03:21,840
Next, we'll break down the full
stack, each of the seven mental

56
00:03:21,840 --> 00:03:24,000
models in one strategic
overview.

57
00:03:24,320 --> 00:03:27,640
Don't try to master them all
today, but understand this.

58
00:03:27,640 --> 00:03:30,960
If you're only using 2, the five
you're missing are the ones that

59
00:03:30,960 --> 00:03:34,320
could change everything.
Before we dive in, make sure you

60
00:03:34,320 --> 00:03:39,080
subscribe to Mindset Frontier AI
on Spotify or Apple Podcasts.

61
00:03:39,480 --> 00:03:43,200
Follow us on X for elite mental
models, billionaire psychology,

62
00:03:43,200 --> 00:03:45,160
and decision frameworks that
scale.

63
00:03:45,640 --> 00:03:49,600
Share this episode with a friend
and help us hit 10,000 downloads

64
00:03:49,600 --> 00:03:52,160
to build the sharpest mindset
community online.

65
00:03:52,440 --> 00:03:55,200
Let's map the stack.
These are the seven mental

66
00:03:55,200 --> 00:03:57,280
models that billionaires don't
just study.

67
00:03:57,280 --> 00:04:00,800
They use daily to evaluate
deals, design products, and make

68
00:04:00,800 --> 00:04:04,600
life altering decisions.
They don't guess, they filter.

69
00:04:04,880 --> 00:04:07,520
They don't overwork.
They reframe.

70
00:04:07,760 --> 00:04:11,000
They don't fear complexity.
They simplify it into systems.

71
00:04:11,320 --> 00:04:13,920
You're trying to scale success
without this mental

72
00:04:13,920 --> 00:04:16,320
architecture.
It's like building a skyscraper

73
00:04:16,320 --> 00:04:19,240
without blueprints.
And let's be clear, this isn't

74
00:04:19,240 --> 00:04:22,200
about being smarter.
It's about thinking with better

75
00:04:22,200 --> 00:04:25,000
tools.
Most people rely on hustle and

76
00:04:25,000 --> 00:04:30,360
instinct, the elite.
They run models like code, like

77
00:04:30,400 --> 00:04:34,720
structure, like armor.
These seven tools aren't just

78
00:04:34,720 --> 00:04:38,160
decision aids, they're leverage.
And here's your preview of the

79
00:04:38,160 --> 00:04:41,480
full stack.
Number one, first principles

80
00:04:41,480 --> 00:04:44,320
thinking.
Elon Musk used this to reinvent

81
00:04:44,320 --> 00:04:47,640
how rockets are built.
The aerospace industry accepted

82
00:04:47,640 --> 00:04:50,680
$65 million per launch as a
given.

83
00:04:51,080 --> 00:04:53,520
Musk asked what are the raw
materials?

84
00:04:53,800 --> 00:04:57,920
Aluminum, carbon fiber, fuel?
What should they cost?

85
00:04:58,320 --> 00:05:01,320
By breaking the problem down to
physics and rebuilding from

86
00:05:01,320 --> 00:05:04,880
zero, he cut launch costs by
over 90%.

87
00:05:05,200 --> 00:05:09,960
This isn't creativity, it's
clarity engineered. #2 inversion

88
00:05:09,960 --> 00:05:12,880
thinking.
Forget How do I succeed?

89
00:05:13,240 --> 00:05:15,720
Charlie Munger flips it.
How do I fail?

90
00:05:16,480 --> 00:05:19,840
Jeff Bezos didn't just design
Amazon to ship fast.

91
00:05:20,200 --> 00:05:24,160
He asked what breaks trust,
Damaged packages, missed

92
00:05:24,160 --> 00:05:28,080
deliveries, confusing returns.
Then he built the logistics

93
00:05:28,080 --> 00:05:31,000
empire to remove those risks
before scaling.

94
00:05:31,280 --> 00:05:36,440
Inversion isn't pessimism, it's
pre emptive dominance. #3 second

95
00:05:36,520 --> 00:05:39,560
order thinking.
Most people ask, what happens if

96
00:05:39,560 --> 00:05:41,560
I do this?
The elite asked.

97
00:05:41,680 --> 00:05:44,680
Then what?
And after that, when Netflix

98
00:05:44,680 --> 00:05:47,560
pivoted to streaming, they
didn't just chase convenience,

99
00:05:47,800 --> 00:05:51,360
they foresaw content wars,
pricing disruption, and the

100
00:05:51,360 --> 00:05:54,720
death of cable.
Tesla didn't just build EVs.

101
00:05:55,400 --> 00:05:59,720
Musk forecasted battery control,
software licensing, and robo

102
00:05:59,720 --> 00:06:02,880
taxi networks.
This is ripple foresight.

103
00:06:03,160 --> 00:06:08,080
It's how they move early and win
big. #4 expected value.

104
00:06:08,400 --> 00:06:10,520
This isn't just for poker or
hedge funds.

105
00:06:10,520 --> 00:06:13,440
It's for life.
EV means you weigh probability

106
00:06:13,440 --> 00:06:17,480
times payoff.
A 20% shot at $1 million has

107
00:06:17,480 --> 00:06:21,320
higher EV than a 90% shot at
$10,000.

108
00:06:21,720 --> 00:06:25,840
Teal and venture capitalists use
this to justify massive upside

109
00:06:25,840 --> 00:06:30,400
plays, knowing they can lose 9
times if the 10th pays 100 X.

110
00:06:30,720 --> 00:06:32,640
The math protects them from
emotion.

111
00:06:32,880 --> 00:06:38,560
The model reveals what instinct
can't. #5 optionality Peter

112
00:06:38,560 --> 00:06:43,240
Till's $500,000 bet on Facebook
wasn't about certainty.

113
00:06:43,680 --> 00:06:47,400
It was about infinite upside and
capped downside.

114
00:06:47,880 --> 00:06:50,920
Optionality means you keep bets
open that could scale

115
00:06:50,920 --> 00:06:56,160
exponentially even if most fail.
Taleb's barbell strategy is

116
00:06:56,160 --> 00:07:00,800
built around this extreme safety
on one side, asymmetric bets on

117
00:07:00,800 --> 00:07:02,360
the other.
The goal?

118
00:07:02,680 --> 00:07:07,520
Survive the downside, explode on
the upside, and billionaires

119
00:07:07,520 --> 00:07:11,080
design their portfolios,
decisions, even careers around

120
00:07:11,080 --> 00:07:13,400
this.
Number six, circle of

121
00:07:13,400 --> 00:07:16,480
competence.
Buffett doesn't invest in AI or

122
00:07:16,480 --> 00:07:19,720
biotech not because they're bad
bats, but because they're

123
00:07:19,720 --> 00:07:21,840
outside his zone of deep
understanding.

124
00:07:22,080 --> 00:07:26,000
The 1% double down on what they
know, outsource the rest and

125
00:07:26,000 --> 00:07:29,200
avoid distractions.
Competence is a Moat.

126
00:07:29,560 --> 00:07:32,920
Every decision made outside that
Moat increases error

127
00:07:32,920 --> 00:07:35,680
probability.
Every decision inside it

128
00:07:35,680 --> 00:07:40,720
increases leverage. #7 the 8020
rule, Pareto Principle.

129
00:07:41,280 --> 00:07:43,240
Billionaires don't try to do it
all.

130
00:07:43,600 --> 00:07:47,120
They eliminate the 80% of
activity that brings 20% of

131
00:07:47,120 --> 00:07:51,960
results and amplify the inverse.
It's why Dorsey themes his days,

132
00:07:51,960 --> 00:07:55,880
Musk blocks 5 minute intervals
and Buffett spends 80% of his

133
00:07:55,880 --> 00:07:59,200
time reading.
Focus isn't productivity, it's

134
00:07:59,200 --> 00:08:02,880
prioritization.
The 1% don't work harder, they

135
00:08:02,880 --> 00:08:05,240
work on the right things
obsessively.

136
00:08:05,560 --> 00:08:08,760
So let's recap.
First principles gives you

137
00:08:08,760 --> 00:08:12,160
clarity.
Inversion gives you defense. 2nd

138
00:08:12,160 --> 00:08:15,800
order gives you foresight.
Expected value gives you math,

139
00:08:16,480 --> 00:08:20,360
Optionality gives you leverage,
Circle of competence gives you

140
00:08:20,360 --> 00:08:23,360
focus, and Pareto gives you
firepower.

141
00:08:23,800 --> 00:08:26,880
Stack them and you're not just
thinking better, you're thinking

142
00:08:26,880 --> 00:08:29,280
like someone building billion
dollar systems.

143
00:08:29,640 --> 00:08:32,919
And if you're only using two of
these, you're playing chess

144
00:08:32,919 --> 00:08:36,559
blindfolded.
You might be smart, you might be

145
00:08:36,559 --> 00:08:40,720
driven, but you're capped.
These models are how the 1%

146
00:08:40,720 --> 00:08:44,039
protect their downside.
Multiply upside and make sure

147
00:08:44,039 --> 00:08:47,160
every hour worked compounds into
something that lasts.

148
00:08:47,520 --> 00:08:51,120
Coming up, we go deep.
Segment 3 unpacks the first

149
00:08:51,120 --> 00:08:54,760
three models, first principles,
inversion and 2nd order

150
00:08:54,760 --> 00:08:57,120
thinking.
We'll show you how billionaires

151
00:08:57,120 --> 00:09:00,360
use these for radical clarity,
risk proofing, and ripple

152
00:09:00,360 --> 00:09:03,720
prediction, and we'll help you
start using them today.

153
00:09:04,040 --> 00:09:06,760
Let's go deeper.
The first three models in the

154
00:09:06,760 --> 00:09:09,960
billionaire stack are all about
clarity, seeing what others

155
00:09:09,960 --> 00:09:13,520
miss, simplifying chaos, and
building mental certainty when

156
00:09:13,520 --> 00:09:16,560
the stakes are high.
If you feel overwhelmed or

157
00:09:16,560 --> 00:09:19,360
stuck, these three are your
first unlock.

158
00:09:19,800 --> 00:09:21,920
Let's start with first
principles thinking.

159
00:09:22,240 --> 00:09:24,880
Most people make decisions based
on analogy.

160
00:09:25,040 --> 00:09:27,560
What worked last time?
What do others do?

161
00:09:27,800 --> 00:09:30,240
But first principles ignores all
that.

162
00:09:30,400 --> 00:09:34,760
It strips away assumptions and
rebuilds from physics, math and

163
00:09:34,760 --> 00:09:37,640
logic.
Elon Musk didn't just ask how to

164
00:09:37,640 --> 00:09:40,720
make rockets cheaper.
He asked what a rocket really

165
00:09:40,720 --> 00:09:42,600
is.
Raw materials?

166
00:09:42,880 --> 00:09:47,160
Volume, Burn rate.
Then he asked, why can't we do

167
00:09:47,160 --> 00:09:48,960
this for 110th?
The cost?

168
00:09:49,360 --> 00:09:52,000
That question alone created
SpaceX.

169
00:09:52,400 --> 00:09:55,120
This model rewires how you solve
problems.

170
00:09:55,800 --> 00:10:00,200
Instead of copying, you create.
Instead of accepting limits, you

171
00:10:00,200 --> 00:10:04,000
expose them.
I've used first principles to re

172
00:10:04,000 --> 00:10:06,000
engineer my own decision
filters.

173
00:10:06,560 --> 00:10:10,080
If a problem feels stuck, it
usually means I'm stacking

174
00:10:10,080 --> 00:10:12,120
assumptions.
Break it down to the

175
00:10:12,120 --> 00:10:15,560
fundamentals and suddenly the
impossible becomes obvious.

176
00:10:15,960 --> 00:10:18,760
And here's how to start.
Pick one constraint in your

177
00:10:18,760 --> 00:10:22,360
business or career.
Now ask, is this truly a

178
00:10:22,360 --> 00:10:25,520
constraint or just a habit?
What are the facts?

179
00:10:25,640 --> 00:10:28,240
What would this look like if I
built it from zero?

180
00:10:28,640 --> 00:10:32,080
Then apply the same question to
your calendar, your finances,

181
00:10:32,080 --> 00:10:35,720
even your routines.
This is how the top 1% move from

182
00:10:35,720 --> 00:10:39,400
friction to leverage.
Model 2 inversion thinking.

183
00:10:39,760 --> 00:10:42,960
This one's got edge.
Charlie Munger doesn't just

184
00:10:42,960 --> 00:10:47,360
think about how to succeed, he
focuses on how to avoid failure.

185
00:10:47,680 --> 00:10:52,400
Bezos applied this to Amazon by
asking what breaks trust, not

186
00:10:52,400 --> 00:10:56,600
speed failure points.
So they engineered bulletproof

187
00:10:56,600 --> 00:10:59,640
logistics.
Inversion turns vulnerability

188
00:10:59,640 --> 00:11:03,080
into strategy.
Exactly, most people over

189
00:11:03,080 --> 00:11:05,800
optimize for upside and ignore
the downside.

190
00:11:06,200 --> 00:11:09,760
Inversion flips that.
It forces you to stress test

191
00:11:09,760 --> 00:11:12,480
before you scale.
Want to be productive?

192
00:11:12,800 --> 00:11:15,000
Ask what makes your day
unproductive.

193
00:11:15,360 --> 00:11:18,480
Want to keep customers?
Ask what makes them leave.

194
00:11:18,840 --> 00:11:22,000
Inversion is clarity through the
lens of prevention.

195
00:11:22,240 --> 00:11:24,640
This model changed how I build
systems.

196
00:11:25,080 --> 00:11:28,560
Before I launch anything, I ask
what's the dumbest way this

197
00:11:28,560 --> 00:11:30,520
could break.
Then I remove it.

198
00:11:31,000 --> 00:11:34,120
That filter alone saves months
of patchwork later.

199
00:11:34,640 --> 00:11:37,360
It's risk prevention that
compounds over time.

200
00:11:37,640 --> 00:11:40,840
And now we get to the third
Clarity models. 2nd order

201
00:11:40,840 --> 00:11:43,200
thinking.
This is how billionaires play

202
00:11:43,200 --> 00:11:47,200
chess in a world of checkers.
1st order thinking asks what's

203
00:11:47,200 --> 00:11:50,800
the immediate result?
2nd order asks, And then what?

204
00:11:51,040 --> 00:11:54,040
And then what?
It forces you to anticipate

205
00:11:54,040 --> 00:11:57,240
consequences that most people
never consider.

206
00:11:57,880 --> 00:12:01,120
This model builds foresight.
Netflix didn't just pivot to

207
00:12:01,120 --> 00:12:05,000
streaming, they saw the entire
media landscape shifting content

208
00:12:05,000 --> 00:12:09,600
licensing, bandwidth, consumer
expectations by thinking 2 steps

209
00:12:09,600 --> 00:12:11,640
ahead.
They moved before the market

210
00:12:11,640 --> 00:12:15,480
caught on. 2nd order thinking
isn't prediction, it's pattern

211
00:12:15,480 --> 00:12:19,000
recognition over time.
Tesla is another example.

212
00:12:19,480 --> 00:12:23,400
Elon Musk didn't just see EVs,
he saw the battery ecosystem,

213
00:12:23,560 --> 00:12:26,920
solar integration, and autonomy
layers converging.

214
00:12:27,200 --> 00:12:30,600
His decisions weren't based on
where the market was, they were

215
00:12:30,600 --> 00:12:32,640
based on where it was
compounding.

216
00:12:33,040 --> 00:12:35,120
And this isn't just for
billionaires.

217
00:12:35,400 --> 00:12:38,680
You can use second order
thinking in your job, in your

218
00:12:38,680 --> 00:12:40,880
investing, even in your
relationships.

219
00:12:41,200 --> 00:12:44,840
Ask what happens next and what
happens after that.

220
00:12:45,200 --> 00:12:48,040
If I say yes to this project,
what other doors close?

221
00:12:48,600 --> 00:12:51,520
If I delay this habit, what's
the price in a year?

222
00:12:51,880 --> 00:12:54,800
Here's how to apply it.
Now take a current decision.

223
00:12:54,800 --> 00:12:57,600
You're facing new role
investment habit.

224
00:12:58,040 --> 00:13:01,880
Write down the first outcome.
Then force yourself to list 3

225
00:13:01,880 --> 00:13:05,280
consequences that follow.
If one of them is dangerous,

226
00:13:05,280 --> 00:13:08,760
you're catching it early.
If one of them is high leverage,

227
00:13:08,840 --> 00:13:12,920
double down.
First principles, inversion, and

228
00:13:12,920 --> 00:13:16,040
2nd order thinking all create
mental space.

229
00:13:16,480 --> 00:13:19,320
They strip away noise and expand
vision.

230
00:13:19,960 --> 00:13:23,440
That's the paradox of clarity.
It doesn't come from knowing

231
00:13:23,440 --> 00:13:26,000
more.
It comes from seeing better.

232
00:13:26,400 --> 00:13:30,400
Segment 4 is where we flip the
stack into risk, upside and high

233
00:13:30,400 --> 00:13:33,040
stakes.
Bets will breakdown expected

234
00:13:33,040 --> 00:13:36,840
value, optionality and the
psychology behind asymmetric

235
00:13:36,840 --> 00:13:39,320
rewards.
If you've ever hesitated on a

236
00:13:39,320 --> 00:13:42,920
big opportunity, this next
segment will recalibrate how you

237
00:13:42,920 --> 00:13:45,120
move.
Let's talk about the difference

238
00:13:45,120 --> 00:13:48,840
between betting and building.
Most people play it safe and

239
00:13:48,840 --> 00:13:51,200
stay stuck.
The 1%.

240
00:13:51,400 --> 00:13:54,040
They understand how to use risk
as a tool.

241
00:13:54,360 --> 00:13:57,320
They don't gamble, but they
don't avoid risk either.

242
00:13:57,560 --> 00:14:00,880
They engineer it.
Segment 4 is all about that

243
00:14:00,880 --> 00:14:04,240
edge, how billionaires flip
uncertainty into unfair

244
00:14:04,240 --> 00:14:08,080
advantage using expected value,
optionality and asymmetry.

245
00:14:08,440 --> 00:14:12,280
Let's start with expected value.
Evie is one of the most powerful

246
00:14:12,280 --> 00:14:16,160
decision tools used by hedge
funds, poker champions and elite

247
00:14:16,160 --> 00:14:18,880
investors.
It's simple, but most people

248
00:14:18,880 --> 00:14:21,560
ignore it.
Probability times pay off.

249
00:14:21,840 --> 00:14:26,160
If there's a 10% chance of
making $1 million, the EV is

250
00:14:26,160 --> 00:14:30,080
$100,000.
If there's a 90% chance of

251
00:14:30,080 --> 00:14:35,840
losing $1000, the cost is $900.
You weigh both sides and choose

252
00:14:35,840 --> 00:14:40,000
based on value, not fear.
This is why Peter Thiel made

253
00:14:40,000 --> 00:14:44,520
that now legendary $500,000
investment in Facebook.

254
00:14:45,080 --> 00:14:47,200
The upside?
Billions.

255
00:14:47,680 --> 00:14:51,640
The downside?
Half a million EV made it

256
00:14:51,640 --> 00:14:56,160
obvious the math worked.
The risk wasn't if Facebook

257
00:14:56,160 --> 00:14:58,640
failed, the risk was missing it
if it didn't.

258
00:14:59,280 --> 00:15:02,000
Most people avoid low
probability bets.

259
00:15:02,360 --> 00:15:06,000
Billionaires run the numbers.
If the upside explodes, they

260
00:15:06,000 --> 00:15:09,120
take the swing.
And you don't need billions to

261
00:15:09,120 --> 00:15:11,560
use this.
You can apply EV to side

262
00:15:11,560 --> 00:15:14,560
hustles, job offers, creative
bets.

263
00:15:14,880 --> 00:15:18,280
What's the potential reward?
How likely is success?

264
00:15:18,480 --> 00:15:21,200
What happens if it works?
If it fails?

265
00:15:21,600 --> 00:15:24,200
EV removes emotion and reveals
the truth.

266
00:15:24,400 --> 00:15:27,960
Most high reward decisions are
undervalued by the crowd because

267
00:15:27,960 --> 00:15:31,600
they feel uncomfortable.
Now stack that with optionality.

268
00:15:32,240 --> 00:15:35,920
Optionality is about designing
decisions with asymmetrical

269
00:15:35,920 --> 00:15:39,960
potential, where the downside is
fixed but the upside is

270
00:15:39,960 --> 00:15:43,240
unlimited.
Taleb's entire investment

271
00:15:43,240 --> 00:15:47,280
philosophy is built around this.
He doesn't try to predict black

272
00:15:47,280 --> 00:15:49,600
Swans.
He builds portfolios that

273
00:15:49,600 --> 00:15:53,280
benefit when they arrive.
It's not about being right.

274
00:15:53,640 --> 00:15:57,680
It's about being ready when
something breaks or breaks big.

275
00:15:58,000 --> 00:16:01,880
Optionality means you keep bets
open, costs low and upside

276
00:16:01,880 --> 00:16:03,800
infinite.
That could be launching a

277
00:16:03,800 --> 00:16:06,600
product that costs you a weekend
but could go viral.

278
00:16:06,880 --> 00:16:10,120
It could be a connection you
nurture with no expectations.

279
00:16:10,400 --> 00:16:14,160
It could be investing small in
something with 100 X potential.

280
00:16:14,480 --> 00:16:18,000
The 1% are obsessed with this
because they know most things

281
00:16:18,000 --> 00:16:21,880
don't work, but the one that
does pays for all the rest.

282
00:16:22,560 --> 00:16:25,320
Optionality also shows up in how
they build companies.

283
00:16:25,720 --> 00:16:29,320
Amazon launched AWS as an
internal project, but the

284
00:16:29,320 --> 00:16:33,040
optionality repurposing it for
the world created a trillion

285
00:16:33,040 --> 00:16:36,160
dollar infrastructure.
Musk launched Tesla knowing the

286
00:16:36,160 --> 00:16:39,760
risk of failure was high, but if
it worked it would reshape an

287
00:16:39,760 --> 00:16:42,800
entire sector.
Optionality doesn't require

288
00:16:42,800 --> 00:16:47,440
certainty, it requires exposure
to upside protected by design.

289
00:16:48,040 --> 00:16:50,280
That brings us to asymmetric
risk.

290
00:16:50,840 --> 00:16:54,600
This isn't a separate model.
It's the result of combining EV

291
00:16:54,720 --> 00:16:58,560
and optionality with strategy.
It's how billionaires structure

292
00:16:58,560 --> 00:17:00,880
their bets.
Low cost, high payoff.

293
00:17:01,160 --> 00:17:04,560
They're not reckless, they just
know how to set the rules.

294
00:17:05,200 --> 00:17:08,440
Instead of betting everything,
they size the risk, define the

295
00:17:08,440 --> 00:17:12,160
worst case, and move fast on
bets with exponential upside.

296
00:17:12,520 --> 00:17:16,280
Ray Dalio's entire approach to
investing is a master class in

297
00:17:16,280 --> 00:17:19,599
asymmetric structure.
His Holy Grail framework

298
00:17:19,599 --> 00:17:23,359
involves blending uncorrelated
assets so that the risk is

299
00:17:23,359 --> 00:17:26,560
reduced but the return potential
compounds.

300
00:17:26,880 --> 00:17:29,280
Same goes for startup
portfolios.

301
00:17:29,680 --> 00:17:34,320
VCs assume most will fail, but
one hit multiplies the entire

302
00:17:34,320 --> 00:17:37,360
fund.
This is design success, not just

303
00:17:37,360 --> 00:17:40,160
belief in it.
And this goes beyond money.

304
00:17:40,760 --> 00:17:44,440
Asymmetric thinking applies to
your time, your focus, even your

305
00:17:44,440 --> 00:17:47,440
relationships.
A cold e-mail that leads to a

306
00:17:47,440 --> 00:17:50,920
life changing opportunity.
A 20 minute learning session

307
00:17:50,920 --> 00:17:52,880
that shifts your entire career
arc.

308
00:17:53,320 --> 00:17:57,160
If the upside is unlimited and
the cost is low, you'd be crazy

309
00:17:57,160 --> 00:18:01,640
not to try the 1%.
Don't fear wasted time, they

310
00:18:01,640 --> 00:18:05,240
fear wasted upside.
This is why billionaires train

311
00:18:05,240 --> 00:18:08,120
themselves to make fast, high
upside decisions.

312
00:18:08,440 --> 00:18:09,960
They don't wait for perfect
clarity.

313
00:18:09,960 --> 00:18:14,280
They build rules.
If upside exceeds 10X downside

314
00:18:14,280 --> 00:18:17,200
and the cost is survivable, they
take the bet.

315
00:18:17,680 --> 00:18:19,520
They know uncertainty is
permanent.

316
00:18:20,200 --> 00:18:23,200
But leverage?
Leverage is engineered.

317
00:18:23,640 --> 00:18:27,360
You can apply this right now.
Identify three opportunities in

318
00:18:27,360 --> 00:18:29,800
your life.
Investments, projects,

319
00:18:29,840 --> 00:18:33,160
connections.
Ask what's the worst case cost?

320
00:18:33,400 --> 00:18:36,840
What's the best case outcome?
If the upside crushes the

321
00:18:36,840 --> 00:18:40,040
downside, build a system that
lets you say yes fast.

322
00:18:40,360 --> 00:18:44,280
Over time, this becomes a filter
for asymmetric action and your

323
00:18:44,280 --> 00:18:50,240
results compound like theirs.
Coming up, Segment 5 execution

324
00:18:50,280 --> 00:18:54,200
filters and the mental firewall
that separates elite doers from

325
00:18:54,200 --> 00:18:57,240
overwhelmed grinders.
We'll break down the circle of

326
00:18:57,240 --> 00:19:01,520
competence in the 8020 rule so
you stop trying to do everything

327
00:19:01,520 --> 00:19:04,040
and start multiplying what
actually matters.

328
00:19:04,480 --> 00:19:06,760
Risk is just one side of the
equation.

329
00:19:06,960 --> 00:19:09,840
What really compounds results is
execution.

330
00:19:10,080 --> 00:19:14,320
The 1% don't just make better
bets, they build tighter systems

331
00:19:14,600 --> 00:19:17,920
and the two models that drive
this are Circle of Competence

332
00:19:17,920 --> 00:19:21,280
and the 8020 rule.
Together, they form a filter

333
00:19:21,280 --> 00:19:25,720
that saves time, increases
focus, and eliminates 80% of the

334
00:19:25,720 --> 00:19:28,800
friction most people drown in.
Let's be blunt.

335
00:19:28,880 --> 00:19:31,880
Most people lose not because
they're lazy, but because

336
00:19:31,880 --> 00:19:36,160
they're distracted.
They chase everything, say yes

337
00:19:36,160 --> 00:19:39,400
to everything, read every book,
try every hack.

338
00:19:39,720 --> 00:19:43,960
Billionaires don't do that.
They go deep, not wide, and

339
00:19:43,960 --> 00:19:46,280
circle of competence is how they
draw the line.

340
00:19:46,560 --> 00:19:48,880
Warren Buffett is the classic
example.

341
00:19:49,160 --> 00:19:52,960
He doesn't invest in what's hot.
He invests in what he deeply

342
00:19:52,960 --> 00:19:56,680
understands.
Insurance, consumer brands,

343
00:19:57,120 --> 00:20:02,480
Predictable cash flows.
Not crypto, Not biotech, not

344
00:20:02,480 --> 00:20:05,280
buzz.
His entire empire is built on

345
00:20:05,280 --> 00:20:07,800
this one rule.
If he can't explain how it

346
00:20:07,800 --> 00:20:11,640
works, he doesn't touch it.
That's circle of competence.

347
00:20:11,960 --> 00:20:15,600
I call it the mental firewall.
You define your edge and you

348
00:20:15,600 --> 00:20:18,400
defend it.
Elon Musk doesn't run media

349
00:20:18,400 --> 00:20:20,600
companies.
Oprah doesn't launch electric

350
00:20:20,600 --> 00:20:23,240
cars.
And you You don't need to be

351
00:20:23,240 --> 00:20:26,280
good at everything.
You need to get dangerous at one

352
00:20:26,280 --> 00:20:29,480
thing and build around that.
Here's how to apply it.

353
00:20:30,120 --> 00:20:32,120
Step one.
Define your domain.

354
00:20:32,360 --> 00:20:34,840
Where do you have deep, unfair
insight?

355
00:20:35,040 --> 00:20:36,960
What do people ask you for help
with?

356
00:20:37,240 --> 00:20:39,520
Where do you see patterns others
miss?

357
00:20:39,760 --> 00:20:42,400
That's the start of your circle.
Step 2.

358
00:20:42,400 --> 00:20:44,600
Double down.
Learn obsessively.

359
00:20:44,800 --> 00:20:48,400
Delegate the rest.
Circle of competence isn't just

360
00:20:48,400 --> 00:20:51,120
about focus, it's about
compounding advantage.

361
00:20:51,480 --> 00:20:54,680
The longer you stay inside your
circle, the more nuanced your

362
00:20:54,680 --> 00:20:57,720
understanding becomes.
You make faster calls.

363
00:20:58,160 --> 00:21:01,600
You recover from mistakes faster
and eventually you start

364
00:21:01,600 --> 00:21:03,480
predicting the game before it's
played.

365
00:21:03,680 --> 00:21:06,480
Now let's stack Pareto the 8020
rule.

366
00:21:06,880 --> 00:21:10,320
This one's brutal.
It tells you that 80% of what

367
00:21:10,320 --> 00:21:13,040
you're doing barely moves the
needle.

368
00:21:13,520 --> 00:21:17,720
The 1% live by this.
They look for the 20% of

369
00:21:17,720 --> 00:21:22,040
actions, inputs, people, tools
that drive 80% of the outcome

370
00:21:22,160 --> 00:21:25,640
and they cut everything else.
Think about how Buffett spends

371
00:21:25,640 --> 00:21:29,880
his day not in meetings, not on
LinkedIn he reads.

372
00:21:30,240 --> 00:21:33,240
Think about how Jack Dorsey runs
multiple companies.

373
00:21:33,440 --> 00:21:38,120
He themes his days Monday for
management, Tuesday for product

374
00:21:38,440 --> 00:21:41,080
and Musk.
He blocks 5 minute chunks.

375
00:21:41,400 --> 00:21:44,640
It's ruthless, but it works.
And here's the trap.

376
00:21:45,080 --> 00:21:47,600
Most people confuse motion with
progress.

377
00:21:48,000 --> 00:21:50,760
They check off 50 tasks and call
it productive.

378
00:21:51,160 --> 00:21:53,960
But billionaires?
They find the three that

379
00:21:53,960 --> 00:21:58,960
actually matter and go all in.
It's not about doing more, it's

380
00:21:58,960 --> 00:22:02,120
about multiplying the impact of
what's already working.

381
00:22:02,480 --> 00:22:05,800
Here's the move.
Open your calendar, your task

382
00:22:05,800 --> 00:22:09,800
list, your goals.
Now ask, what's the 20% here

383
00:22:09,800 --> 00:22:14,080
that drives 80% of the results?
Who are the 20% of people in

384
00:22:14,080 --> 00:22:17,240
your circle who create most of
the value or most of the

385
00:22:17,240 --> 00:22:21,040
friction cut?
Automate or delegate the rest.

386
00:22:21,800 --> 00:22:25,600
Focus is a multiplier, but only
if it's pointed at what matters.

387
00:22:26,000 --> 00:22:27,760
That's the power of 80
twentieths.

388
00:22:28,160 --> 00:22:31,280
It's not just time management,
it's energy leverage.

389
00:22:31,720 --> 00:22:35,080
The elite treat time like
capital, and they only invested

390
00:22:35,080 --> 00:22:39,960
in asymmetric return zones.
Not inboxes, not noise.

391
00:22:40,320 --> 00:22:43,160
Compounding only works if you
stop interrupting it.

392
00:22:43,400 --> 00:22:47,640
Want to go deeper?
Try this for the next 7 days.

393
00:22:47,640 --> 00:22:51,040
Every night, write down the one
decision or action that created

394
00:22:51,040 --> 00:22:54,560
most of your progress.
After a week, you'll see the

395
00:22:54,560 --> 00:22:57,160
pattern.
That's your real 20%.

396
00:22:57,520 --> 00:23:00,680
You don't need more hours, you
need more precision.

397
00:23:01,000 --> 00:23:04,040
And it stacks.
Once you define your circle and

398
00:23:04,040 --> 00:23:07,120
filter with 80 twentieths, your
life becomes lighter.

399
00:23:07,480 --> 00:23:11,480
Less mental load, fewer open
tabs, more momentum.

400
00:23:11,760 --> 00:23:16,120
You execute faster because your
brain isn't split ten ways, it's

401
00:23:16,120 --> 00:23:21,400
locked in on what compounds.
Coming up next, Segment 6, we're

402
00:23:21,400 --> 00:23:23,280
closing the loop with the
challenge.

403
00:23:23,800 --> 00:23:27,200
We'll help you pick your entry
point, execute it for 30 days,

404
00:23:27,240 --> 00:23:31,200
and stack the upside.
Because mindset isn't magic,

405
00:23:31,520 --> 00:23:34,600
it's muscle, and billionaires
train it daily.

406
00:23:34,920 --> 00:23:38,200
Let's bring it all home.
You've seen the models, you've

407
00:23:38,200 --> 00:23:41,320
heard the stories.
Now the question is, will you

408
00:23:41,320 --> 00:23:43,880
execute?
Because the elite don't just

409
00:23:43,880 --> 00:23:47,160
learn frameworks.
They install them, they live

410
00:23:47,160 --> 00:23:50,800
them, they test them under
pressure, and they track what

411
00:23:50,800 --> 00:23:53,560
compounds.
This isn't about memorizing

412
00:23:53,560 --> 00:23:55,880
models, it's about embedding
one.

413
00:23:56,240 --> 00:23:58,160
Right now, you don't need all
seven.

414
00:23:58,480 --> 00:24:03,000
You need one.
One shift, 1 lens, one habit

415
00:24:03,000 --> 00:24:05,440
that starts tipping the system
in your favor.

416
00:24:05,680 --> 00:24:08,760
Think of it like financial
compounding, but for your mind.

417
00:24:09,160 --> 00:24:12,560
So here's the challenge.
Choose one model from this

418
00:24:12,560 --> 00:24:14,520
episode.
Just one.

419
00:24:15,320 --> 00:24:17,720
Commit to running it every day
for 30 days.

420
00:24:18,080 --> 00:24:22,920
In how you decide, in how you
plan, in how you say yes or say

421
00:24:22,920 --> 00:24:25,240
no.
The goal isn't erfection.

422
00:24:25,440 --> 00:24:27,560
The goal is pattern
installation.

423
00:24:28,040 --> 00:24:30,840
Once it's in your mental OS it
runs forever.

424
00:24:31,160 --> 00:24:34,680
Here are a few examples.
Choose first principles.

425
00:24:35,000 --> 00:24:38,080
Rebuild a broken part of your
life or business from zero.

426
00:24:38,440 --> 00:24:42,040
Ask what's the core problem and
what assumptions am I blindly

427
00:24:42,040 --> 00:24:44,000
accepting?
Choose inversion.

428
00:24:44,360 --> 00:24:47,640
Every morning, identify the one
thing that could ruin your day

429
00:24:47,640 --> 00:24:49,560
and eliminate it before it
starts.

430
00:24:49,880 --> 00:24:53,920
Or go asymmetric, choose
optionality, make one small

431
00:24:53,920 --> 00:24:57,040
scalable.
Bet a day, DM someone big,

432
00:24:57,720 --> 00:25:03,600
launch a fast test, record a one
minute, pitch the risk low, the

433
00:25:03,600 --> 00:25:08,040
upside wild.
The 1% don't fear being wrong.

434
00:25:08,040 --> 00:25:11,040
They fear ignoring the one bet
that changes everything.

435
00:25:11,760 --> 00:25:15,720
Circle of competence Spend the
next 30 days doubling down on

436
00:25:15,720 --> 00:25:20,800
your edge.
Read test, teach and 8020.

437
00:25:21,680 --> 00:25:24,120
Track your day.
Cut the noise.

438
00:25:24,520 --> 00:25:27,600
Amplify the signal.
If a task doesn't move the

439
00:25:27,600 --> 00:25:34,040
needle, delete it, delegate it,
or automated. 1% of people do

440
00:25:34,040 --> 00:25:36,760
this daily.
That's why they're ahead.

441
00:25:37,080 --> 00:25:39,960
What you're building here isn't
knowledge, it's thinking.

442
00:25:39,960 --> 00:25:44,520
Leverage frameworks that reduce
decision fatigue, routines that

443
00:25:44,520 --> 00:25:48,680
eliminate noise, filters that
protect your time and compound

444
00:25:48,680 --> 00:25:51,240
your edge.
This is the mental scaffolding

445
00:25:51,240 --> 00:25:54,200
of billion dollar outcomes.
And this is where most people

446
00:25:54,200 --> 00:25:56,360
fail.
They treat frameworks like

447
00:25:56,360 --> 00:25:58,440
trivia.
The Elite treat them like

448
00:25:58,440 --> 00:26:01,360
software.
They debug, they refine.

449
00:26:01,560 --> 00:26:05,400
They upgrade.
Every year, every quarter, every

450
00:26:05,400 --> 00:26:07,520
week.
And every decision they make

451
00:26:07,520 --> 00:26:11,360
gets faster, cleaner, sharper.
So here's your next move.

452
00:26:12,000 --> 00:26:16,600
Pick your model, commit to it,
run it for 30 days, post it,

453
00:26:16,920 --> 00:26:20,320
track it, share what shifts
we'll be watching.

454
00:26:20,560 --> 00:26:24,720
Tag us on X at Fin Frontier AI
and let us know which framework

455
00:26:24,720 --> 00:26:28,800
you're installing first.
Thinking like the 1% starts with

456
00:26:28,840 --> 00:26:32,440
acting like the 1% and action
starts with clarity.

457
00:26:32,960 --> 00:26:38,560
Choose one Model 1, filter one
behavior, then let time and

458
00:26:38,560 --> 00:26:41,800
systems do the rest.
That's how the compound curve

459
00:26:41,800 --> 00:26:44,560
begins.
If this episode helped you see

460
00:26:44,560 --> 00:26:46,800
your decisions differently,
share it.

461
00:26:47,040 --> 00:26:50,160
We're building the sharpest
mental model community online.

462
00:26:50,520 --> 00:26:53,800
Your friends don't need another
quote, they need a better lens.

463
00:26:54,240 --> 00:26:57,760
Help us hit 10,000 downloads and
bring more thinkers into the

464
00:26:57,760 --> 00:26:59,600
fold.
And if you want weekly

465
00:26:59,600 --> 00:27:02,400
frameworks, challenges and
mental model breakdown straight

466
00:27:02,400 --> 00:27:05,640
to your inbox, sign up for The
10 Times Edge.

467
00:27:05,920 --> 00:27:09,320
It's free, it's sharp, and it's
built for those who execute.

468
00:27:09,800 --> 00:27:13,720
Mindset evolves through pressure
compounds, and even the best

469
00:27:13,720 --> 00:27:18,000
systems fail without execution.
Treat every insight like a test.

470
00:27:18,000 --> 00:27:20,040
Run it, refine it and make it
yours.

471
00:27:20,320 --> 00:27:23,840
Music in this episode, including
our intro and outro track

472
00:27:24,000 --> 00:27:27,720
Dreaming on Instrumental by
Neffex, is licensed under the

473
00:27:27,720 --> 00:27:31,800
YouTube Audio Library license.
Full details can be found in the

474
00:27:31,800 --> 00:27:36,160
episode description.
Copyright 2025 Finance Frontier

475
00:27:36,200 --> 00:27:38,440
AI.
All rights reserved.

476
00:27:39,000 --> 00:27:42,880
Reproduction or redistribution
of this content without written

477
00:27:42,880 --> 00:27:44,960
permission is strictly
prohibited.