Rule Du Jour: Rule #2: Two Systems of Thought (Patreon)

My new segment - top rules to live by. Let's see if I can share one a day for 300 days. Here goes #2.

The concept of the "Two Systems of Thought" is a psychological theory that describes how humans process information and make decisions. This theory, popularized by psychologist Daniel Kahneman in his book Thinking, Fast and Slow, divides our thinking processes into two systems:

System 1: This system is fast, automatic, and often subconscious. It relies on intuition and emotion, allowing us to make quick decisions without much effort. System 1 is useful for everyday tasks and decisions that do not require deep thought, such as recognizing faces, driving or reacting to immediate dangers like a tiger on your lawn.

System 2: In contrast, System 2 is slower and more deliberate. It involves conscious reasoning and logical thinking. This system is engaged when we need to solve complex problems, make important decisions, or when tasks require careful analysis and consideration. System 2 helps us avoid making snap judgments that might be influenced by biases or emotions.

CONCLUSION

1) Be aware of the 2 systems

2) Use System 2 for INVESTING decisions