Think Backwards A Bit

Apr 29, 2024
A couple of days ago, I watched Ali's video. There is a thinking model in the video which leaves a deep impression on me. Here are two of my thoughts from the video.

Know the cards on your hand

When we set up a goal or thought, we need to think backwards a bit to figure out whether it is reachable or not. We have to know what cards are on our hands before we next move.
For instance, if your goal is to achieve financial freedom, think through questions like How much income would be required to cover my living expenses? What are my current assets and cash flow? How can I sustain this freedom long-term after reaching it? Answering these helps reveal your true starting point and forces you to map out a viable path forward.
With practice, you can master the advanced skill of thinking backwards repeatedly, almost like peeling an onion. But you can use the skill as a sequence from your goal to what you have. This sequential analysis illuminates any gaps that need adjusting in your plan.
For example, if financial freedom for you means earning $2,000/month to cover costs in a certain city, you could:
  1. Explore passive income strategies like index fund investing
  1. Research historical returns and determine $240,000 in capital is needed to generate $24,000 annually from the S&P 500 at 10% growth
  1. Therefore, your starting requirement is accumulating that $240,000 principal
  1. Work backwards from there to your current savings, income, budget, etc.
In essence, thinking backwards equips you to deconstruct goals into actionable plans grounded in reality, not just ideals. By truly understanding your circumstances, you can map out the most viable path to succeed.

Something makes sense

When we watch news or online videos, we may sometimes feel confused about the speakers' main points or underlying reasons. This thinking model can help us analyze their perspectives more critically.
Take sponsored content or product recommendations from YouTubers, for example. When they offer a discount code for a product they endorse, we shouldn't take it at face value. Using this thinking model, we can think backwards a bit to explore potential motivations behind the promotion:
Why are they giving a discount through their affiliate link? Is the discounted price truly the lowest available, or just a basic percentage off? Could this be part of a marketing strategy to drive sales and conversions?
These questions represent hypotheses - possible explanations that require further evidence to validate. But by Training ourselves to think this way, we become better equipped to resist persuasive tactics and make more objective decisions.

© JimLuo 2021 - 2024