A Mental Model for Big Decisions

“If you made this decision 10 years ago, would you be happy with that decision today?

If you make this decision today, do you think you will be happy 10 years from now?”

This mental model is from Ray Dalio’s book Principles and is one of my favorite decision making tools.

Even in today’s fast paced world of tech, you can often explore this model to great extent. Even putting this on a 5 or a 3 year window is a helpful frame of thought.

How I use this mental model in business decisions?

Business decisions are one of the places I most often use this model.

When I decided to start Content Allies, a B2B Podcast Agency. I looked over a 5 year horizon.

I evaluated to myself

“If I had started this 5 years ago, I would have likely been the biggest company in the industry by now. If I start it today, I still think it’s possible that in the next 5 years I could be one of the top companies in the industry.

Based on where the technology was in podcasting 5-10 years ago, and where it is at today, I feel confident that in 5-10 years from now it will still exist in a somewhat similar form.”

Anytime I start a business, bring on a business partner, make a large investment, take a bold leap forward… I use this framework.

I use it to evaluate if I think this is the right move.

Using this mental model on the personal side

This model is not just for business.

I’ve used this upon buying a house.
I’ve used this when choosing where to invest my personal money.
I’ve used this when getting a second dog.

Anytime you are faced with a big life decision, this framework helps your frame.

By acting like the decision was in your past, you can imagine what your life would look like today if you had made it.

And from that frame, you can extrapolate how your future will look if you make that decision today.

No decision is perfect, but I hope this framework can help.