Insights from Clear Thinking by Shane Parrish

“Good judgment is expensive, but poor judgment will cost you a fortune.” – Shane Parrish

In the following insights, you’ll learn three ways to stop big problems from accumulating in your life.

Favorite insight:

When faced with a significant decision, find your most important factor by doing head-to-head battles between factors until one rises to the top. Then, base your decision on your most important factor, as long as all other factors pass a “good enough” threshold.

Life is like a game of Tetris.

Just as the blocks accumulate in Tetris, problems accumulate in your life. When problems stack up, you’re just a few bad decisions away from something horrible – a job loss, a business failure, a significant loss of money, or the end of a meaningful relationship. But clear thinking leads to good decisions that eradicate many blocks and keep your problem stack low. Shane Parrish’s book offers several “clear thinking” principles that I’ve come to see as cheat codes in the game of life.

Clear thinking cheat code #1: See problem blocks far in advance

Most of life’s problems result from four decision defaults: inertia, social, emotional, and ego.

• The inertia default takes over when you tend to keep doing what you’ve been doing – it’s why you may stay in a job too long and become miserable.
• The social default takes over when you tend to do what others expect you to do. You may drink alcohol because you’re around people who frequently drink alcohol.
• The emotional default takes over when you tend to do what you have the impulse to do. You may send an angry email when you’re pissed off without fully considering the damage it could do.
• The ego default takes over when you tend to seek status and be overconfident in your decisions. You may pursue a high-paying management position despite hating the work. You may be so confident in a business idea that you don’t bother to do market research. If the business starts to fail, you are not quick to admit you’re wrong and pour more money into a bad investment.

Taking time to simulate how you are going to handle each of the I.S.E.E. default decisions and creating rules to counter-act each default decision reduces the likelihood that these decisions create problems in your life.

• Imagine inertia decisions causing your career or business to become stagnant. What can you do to prevent that from happening? Possible new rule: “I spend two hours every Friday morning learning and refining professional skills,” or “I take off one week a year to explore new business opportunities.”
• Imagine social default decisions dictate your life and you get to the end of your life wishing you’d live true to yourself instead of merely doing what people expected of you. How are you going to prevent that from happening? Maybe you implement a “hell yeah or no” rule – if you’re not thrilled to do something, politely say no.
• Imagine you live purely by emotion and succumb to your animal instincts – you frequently get angry, fearful, and indulge, causing your relationships, investments, and health to fall apart. How are you going to prevent that from happening? You may want to create rules like, “I silently count to five before responding while angry,” or “I never keep junk food in the house.”
• Imagine your ego causes you to ignore warning signs leading to significant investment losses or the end of a meaningful relationship. How can you prevent this from happening? Maybe you create a rule in which you ask, “How might I be wrong?” before every major decision, and steelman the arguments of people you disagree with (i.e., create the best possible version of opposing opinions).

Clear thinking cheat code #2: Simplify the game

In Tetris, you always hope for the straight block – it’s easy to place and can clear out large sections of blocks on the screen. In life, you can make almost every decision and problem seem like a straight block if you clarify your most important factor.

If you’re struggling to buy a car, get out a pack of sticky notes and write down one important factor – comfort, safety features, exterior look – on a series of sticky notes, and place them in a row on the wall. Then, have two sticky notes face-off and move whichever factor you deem more important above the row and the less important factor below the row. Now, have the winning sticky note face the next sticky note, and move the winner of that match to the top. After all sticky notes have faced off, the sticky note on top is your most important factor. Base your car decision on the car that ranks highest according to your most important factor if everything else passes a “good enough” threshold.

Clear thinking cheat code #3: Slow down the game

In Tetris, slowing down the game gives you time to spot an obvious place to put the next block. The same is true for big life decisions. If you have enough time to talk to experienced people, come up with at least three good options, run a series of trials, and sleep on the decision for several nights, the decision will start to feel obvious. However, to have enough time to evaluate big, important decisions properly, you must take a barbell approach to ALL decisions – make decisions either A.S.A.P. or A.L.A.P..

• If the consequence of rushing a decision is very low (it won’t matter much a month from now), or you could easily reverse a decision (cancel and rebook a flight, return an Amazon item, or move furniture back to the way it was), that decision should be made as soon as possible.
• If rushing a decision may have a long-lasting consequence and is very hard to reverse (buying a home, having a child, or agreeing to a project that will take a hundred hours to complete and backing out mid-project will damage your reputation), then you should wait as long as possible (A.L.A.P.) to commit. But how long is too long? You’ll know it’s time to decide if you stop getting a good return on your research time and any new information just strengthens your confirmation bias, or you First Lose an OPportunity and further waiting is costly. I like to visualize this principle by imagining a stock that bottoms out and starts rising. I don’t want to rush in and buy the first spike, but if the stock retreats and makes a higher-low before going up, I want to get in so I don’t miss more upside.

Review

Clear Thinking is a book that aims to help readers improve their thinking and decision-making skills in various aspects of life and work. The book is divided into two parts: the first part focuses on identifying and overcoming the enemies of clear thinking, such as biological instincts, cognitive biases, emotional triggers, and environmental influences. The second part provides a practical framework for applying clear thinking to any situation, based on five steps and 15 principles that Parrish has learned from various sources and disciplines.

The main idea of the book is that most of us are not aware of the opportunities to think clearly and deliberately in our daily lives. Instead, we tend to react without reasoning, following our defaults that are often influenced by factors that do not serve our best interests. By learning how to create space between stimulus and response, we can avoid falling into traps that lead to bad outcomes and instead use our cognitive abilities to achieve our goals and live more intentionally.

Clear Thinking is a well-written and insightful book that offers valuable advice and tools for anyone who wants to improve their thinking and decision-making skills. The book is based on Parrish’s extensive research and experience as the founder of Farnam Street, a popular website that curates the best of what other people have already figured out. The book covers a wide range of topics and concepts from psychology, philosophy, economics, science, and more, and explains them in a clear and engaging way. The book also provides many examples and stories from Parrish’s own life and from other successful people who have applied clear thinking to their challenges and opportunities.

The book is not only informative but also practical, as it gives readers a simple and effective framework for applying clear thinking to any situation. The five steps are:

1. identify the problem or opportunity;
2. gather relevant information;
3. analyze the information;
4. make a decision; and
5. act on the decision.

The 15 principles are:

• be curious;
• be humble;
• be open-minded;
• be skeptical;
• be rational;
• be objective;
• be systematic;
• be creative;
• be adaptable;
• be resilient;
• be ethical;
• be collaborative;
• be communicative;
• be reflective; and
• be consistent.

Parrish explains each principle in detail and provides tips and techniques for applying them in different contexts.

The book is not without its limitations, however. One limitation is that the book does not provide enough evidence or references to support some of the claims or recommendations that Parrish makes. For example, Parrish suggests that reading books is one of the best ways to improve one’s thinking skills, but he does not cite any studies or sources that show how reading books affects one’s brain or cognition. Another limitation is that the book does not address some of the potential challenges or drawbacks of clear thinking, such as the possibility of overthinking, analysis paralysis, or cognitive overload. Parrish acknowledges that clear thinking is not easy or natural, but he does not offer much guidance on how to balance clear thinking with intuition, emotion, or gut feeling.

Overall, Clear Thinking is a useful and inspiring book that can help readers enhance their thinking and decision-making skills in various aspects of life and work. The book is suitable for anyone who wants to learn how to think more clearly, effectively, and intentionally. The book is also a good introduction to some of the topics and concepts that Parrish covers in his website Farnam Street¹.