81. Maslow's Hierarchy of Needs Theory

Human needs are divided into five levels: physiological needs, safety needs, belonging and love, esteem needs and self-actualization. Needs are formed and satisfied step by step from low to high.

Human beings are basically animals that are never satisfied. After one need is satisfied or is about to be satisfied, the desire to pursue another level of demand will follow. Understand that needs are hierarchical and that there are differences between individuals. The highest level of "self-realization" is the "road less traveled". Only those who have truly satisfied lower-level needs can easily embark on the road to self-realization.

The greatest significance of Maslow's hierarchy of needs theory to us is that it tells us that after people meet their basic needs, they must achieve higher needs and goals.

82. Double-entry bookkeeping

Double-entry bookkeeping is when recording is required after each economic transaction occurs, and it is carried out in two or more mutually related accounts at the same time with equal amounts. A method of accounting for registration.

The basic principle of double-entry accounting is the basic accounting equation: Asset (Asset) Expense (Expense) = Liability (Liability) Equity (Owner’s Equity) Income (Income)

Accounting The subjects are actually to further refine the five major subject categories, so that the description of economic activities can be more accurately packed into these boxes. (Where it comes from, where it goes) × (static nature, dynamic nature), essentially means looking at every economically significant activity from two angles, and at the same time classifying these activities. What is the classification? It is to look at economic activities from the perspective of shareholders.

Generally speaking, the so-called dynamic nature refers to the increment or negative increment that business brings to shareholder wealth; the static nature refers to the true attribute of wealth on a certain day and at a certain minute and a certain second. To apply it in financial accounting, you only need to grasp three points:

1. Don’t look at the results but look at the process. You cannot look at the debits and credits of a certain account (such as assets or income) in isolation, but rather how the funds flow in a certain project.

2. Conservation law: how funds flow. Funds are running around (from left to right or right to left) in the equation of expenses, assets = owners' equity, liabilities, income, and there is no way to escape from this equation.

3. How to name the beginning and end. The source account of project funds is recorded as a credit. The destination of project funds is recorded as debit. Double-entry accounting is a perspective of conservation, a perspective of change, and a dynamically balanced way of observing the world.

83. Quality control theory

“The quality control theory of engineering is also a very important core part for non-professional engineers like you and me. Its basis happens to be Fermat and Pascal's basic mathematical theory.

If a project costs so much, you don't want it to fail."

Grid

The essence of quality control is actually lean management, using various statistical tools to continuously optimize and iterate, continuously improve quality, reduce cost consumption, and finally reach a very high standard. The MVP model in the entrepreneurial field has a similar idea, running fast in small steps, iterating quickly, and continuously optimizing and improving the quality of products and services. The most classic one is the PDCA cycle: plan, execute, check, and act. These four stages are sequential, connected, and connected from beginning to end. Each execution is a cycle, called the PDCA cycle. Each cycle is relative to the previous cycle. There is an improvement.

84. Redundant backup system

In engineering, typical engineering redundancy (rǒng yú) refers to adding "extra" key components to the system. It is the use of the system The parallel model is a means to improve system reliability, usually using backup or fail-safe devices. Everything from the rocket's control and power systems to the extra hard drives and backup power supplies used extensively in data centers.

It is also used in risk prevention in life and family. Redundant backup is an engineering thinking model to resist risks.

85. Breaking point theory

The breaking point theory in engineering is also a very powerful thinking model. In engineering, some protection mechanisms will be designed to prevent small losses. Big loss. For example, fuses in circuit systems, car bumpers, blasting caps, and bursting discs in pressure systems are all fracture-type safety protection devices.

The breaking point model is relatively easy to understand. It means using a small tolerable loss to avoid the occurrence of unbearable systemic risks. There is an old saying in China called "Abandon the car to save the commander", which means something similar. Three of the four main mental models of engineering mentioned by Charlie Munger are all about protecting system security. The redundancy backup and safety margin models are easy to talk about, but how can this breaking point model be applied in real life and investment process to avoid major risks and losses with a small loss that can be tolerated.

When investing, a person should set a stop loss point and stop the loss when necessary to prevent huge losses. There are also circuit breaker mechanisms in the stock market. We need to use this thinking many times in life, and it is a wise choice to "bear the pain and give up love" at the right time.

86. Flow model

"Flow" refers to the state of being fully focused and selfless when we are doing something - in this state, you even We don't feel the existence of time. After this thing is completed, we will have a feeling of energy and satisfaction.

This is a theory about human happiness, and the conditions for people to be immersed in flow:

1. Clear goals, tasks of appropriate difficulty - neither anxiety nor anxiety It won't be boring.

2. Timely feedback - satisfaction with progress. Why games are so popular is that the design of games meets the flow theory. If the definition of games is expanded to include learning, work, sports, and education, and you can evaluate whether what you are doing meets the three points of flow, then your life will be spent of happiness.

3. Give full play to certain abilities of your own

4. Completely concentrate and have control over the things at hand. The flow state is the best and most beautiful thing we can achieve at work. A state of peace, from one flow state to a new flow state, those fulfilled people can successfully turn their lives into a pure flow state. All parts of their lives are tightly connected together, and all activities have meaning.

87. Occam’s razor

“Scientific theories should be as simple as possible, but not too simple.”

——Einstein

"Occam's razor", also known as the "law of parsimony", this principle can be traced back to at least Aristotle's "nature chooses the shortest path". The core content is "Don't add entities unless necessary", which is a simple and effective principle.

The three principles of Occam's razor:

1. According to the principle of minimum energy, our life should be as simple as possible, and the simple and effective way is to develop good habits.

2. Automatic transmission cars are gradually replacing manual transmission cars, also because automatic transmission satisfies the "simple and effective principle" for most users.

3. Application in the investment field: When faced with the complex investment market, you should pick up Occam’s razor, simplify complex things, simplify your own investment strategies, and treat those companies that consume a lot of money, time, and Identify the mental issues and take steps to get rid of them.

Finally we end with a famous quote by Friedrich Maitland: "Simplicity is the result of long hard work, not the starting point."

88. Microeconomics

1. Considering scarcity is fundamental to understanding value.

2. Opportunity cost: People face trade-offs. The cost of something is what is given up in order to get it.

3. Incentives are crucial

4. Economic thinking is marginal thinking, and rational people consider marginal quantities.

5. Obtaining information comes at a cost, and information asymmetry is a huge advantage.

6. Trade can make everyone better off, and the invisible hand is everywhere.

7. The value of goods and services is subjective (utility theory of value).

8. Sunk costs: Facing the loss of economic thinking rationally, making choices efficiently is the core thinking of economics. It can help people effectively allocate resources and make optimal choices in their daily lives.

89. Scale advantage theory

The essence of scale advantage theory is that the more goods you produce, the better you can produce that good. That's a huge advantage. It has a lot to do with the success or failure of business. The advantage of scale will first bring an information advantage and strong social recognition. The huge advantage of scale enables a more specialized division of labor within the enterprise, thereby having greater advantages in producing products or services.

90. Golden Circle Thinking

The Golden Circle is a way of understanding the world and has three levels. Starting from why and exploring the essence of the problem is the fastest way to analyze the root cause of the problem.

The thinking mode is to start from (Why), why should we do this, what is the concept of doing this, stimulate perceptual emotions from the heart, generate driving force, and then think about (How) how to do it. , set goals and solve them step by step, and the final result is (What) is more in line with the original concept.

Why: Think about why we are doing this, our goals and concepts;

How: What methods and measures are used;

What: The manifestation of the results.

The process of thinking about why for an enterprise or a person is to determine the principles, boundaries, and values, and provides a general model for solving problems.