Why Smart People Think Beyond the Present

If you think the same as everyone else, you're going to act the same as everyone else.

How many times have you said, "I wish I had thought about that before!"? You may have made a decision only to regret it later. Some examples:

• Accepting a higher- paying job to realize later that it isn’t a good fit.

• Spending your bonus on a luxury item and realizing later you don’t actually need it.

• Investing in something blindly as “everyone else is doing it” and realizing later that it is a bad investment.

If any of these have happened to you, then there is a solution to avoid the same mistakes - Second order thinking.

It is an essential concept in decision-making and problem-solving. It involves considering not just the immediate effects of a decision but also the potential chain reactions and unintended consequences that may arise in the future.

One good way to think of it is, what’s the impact of this decision after 10 minutes, 10 months and 10 years?

Benefits of second - order thinking

1. Avoid instant gratification.

   Many times we want to make a quick decision so that we get temporary pleasure. e.g. buying an expensive car. Second - order thinking makes you think beyond the immediate moment.

2. Better decision - making.

   By considering alternatives, risk & benefits, we spend time evaluating choices & make the best decision.

3. Future - proofing.

   By projecting ourself into the future, we anticipate what may happen and prepare for it. We reduce chances of surprises.

4. Reduce risk.

   By spending time looking at the big picture, we uncover potential risks and can plan a way to reduce / remove the risk.

How to implement in your life

1. Stop and reflect.

   Is this a minor or major decision?

   Does this have potential to affect other things in the future?

2. Consider alternatives.

   If the decision can affect other things in the future, do you have alternatives now?

3. Risk and benefits.

   If you have alternatives, it’s good. What are the risks and benefits of each option? What are your assumptions?

4. Plan B.

   After you take the decision if something goes wrong, do you have a backup?

5. Seek input.

   Speak to your family, close friends and girlfriends. You may be missing something, and they will tell you.

6. Be flexible.

   Our job is to take the best decision at the moment. After this many things won’t be in out control. So we may have to change things as we proceed.

7. Learn from experience.

   Life teaches us invaluable lessons. Learn from this and don’t make the same mistake twice. Read a lot so you learn from others mistakes.

Free template!

Because you guys are awesome, I’ve created a free template for you to download and use! Here it is. Snapshot:

Hope this mental model will help you to make the best decisions ever.

And if so, share the article with your friends and family.

Further reading

1. Second-Order Thinking: What Smart People Use to Outperform.

2. Howard Marks' Second Level Thinking Skills