First-Principles Thinking

What this unit covers

Learn to break a belief down to what is actually true underneath it, instead of reasoning from "everyone does it this way".

By the end you will be able to

• Explain the difference between a copied belief and one reasoned from foundational facts.
• Recognise when a financial habit is followed only because it is common.
• Apply the question why does this actually work to a habit you follow.

How it starts: Money Split Four Ways

1. You deposit your savings across four different bank accounts, as your family always has.
2. The clerk asks why you don't just keep it all in one account here.
3. You realise you have never actually asked why this rule exists.

Words you will meet

First-principles thinking

Breaking a belief down to facts you can prove true, then rebuilding the conclusion from those facts.

In this module: Thinking Like a Professional

1. Decision Frameworks
2. First-Principles Thinking (this unit)
3. Probabilistic Thinking
4. Bayesian Thinking