Improve Your Decision-Making with These 10 Cognitive Razors
The average adult makes about 35,000 conscious decisions each day.
Given this sheer volume of choice, how do we ensure we’re making the right decisions, day in and day out, without becoming exhausted?
Using insights from investor and thought leader Sahil Bloom, this graphic shares 10 cognitive razors, or rules of thumb, that can help you simplify your decision-making.
We’ve organized Bloom’s favorite cognitive razors into three overarching categories, which we dive into in further detail below.
Location, Location, Location
The first theme is location, and the importance of being at the right place at the right time.
The Luck Razor falls into this category because it highlights the importance of putting yourself out there. According to the Luck Razor, when choosing between two paths, pick the one with the largest “luck surface area,” or the path that offers you the most opportunity to get lucky.
This is because when you’re networking, meeting people, and building new relationships, you’re much more likely to stumble upon an opportunity than if you were sitting on your couch, not taking action.
The Rooms Razor follows a similar theme because it emphasizes the importance of your surroundings. It stresses that, if you have a choice between two rooms to walk into, choose the one where you’re most likely to be the dumbest person in the room.
While it’s a bit of an uncomfortable situation, it provides a greater opportunity for growth, as long as you check your ego at the door and listen to what others have to say.
Lastly, the Arena Razor reminds us that when we want something, we need to take the necessary steps to make it happen.
For instance, if you want to become a social media influencer, you need to start creating content and posting it online. It’s not easy to put yourself out there and take action, but if you want to play the game, you need to be in the arena.
The Power of Positive Thinking
The next theme is the power of mindset and positive thinking. This relates to how you view your life, the people you choose to surround yourself with, and how you interpret the actions and opinions of others.
According to the Gratitude Razor, when in doubt, don’t hesitate to show your gratitude to people who have supported you, or given you advice or opportunities.
Research studies have shown that expressing gratitude and giving thanks can be correlated with greater happiness, improved health, and stronger more meaningful relationships. So make sure to say thank you regularly, and tell your loved ones how much you appreciate their support.
It’s not just your mindset that’s important, though. The Optimist Razor recommends surrounding yourself with optimists, rather than pessimists. Pessimists may point out everything that could go wrong in a scenario, which might discourage you to break out of your comfort zone.
Optimism, on the other hand, will emphasize everything that could go right—and may even help you problem solve if you encounter problems along the way.
Keep Decision-Making Simple, Silly
The last one is quite simple, really: don’t overcomplicate things.
Occam’s Razor, which is named after the 14th-century scholar Franciscan friar William of Ockham, is generally interpreted as the following: when faced with a decision between two competing theories that generate the same outcome, the simplest theory is often the best one.
As Bloom says in this blog post, “simple assumptions [over] complex assumptions. If you have to believe a complex, intertwined series of assumptions in order to reach one specific conclusion, always ask whether there is a simple alternative assumption that fits.”
The ability to make things simple is also a good indicator of how deeply you understand something. According to the Feynman Razor, if you can’t explain a concept simply, then you don’t really understand it. So, if someone uses a ton of jargon or complexity to explain something, they could be masking a lack of deeper knowledge on the topic.
Editor’s note: For more information on cognitive razors and simplifying your decision-making, check out Sahil Bloom’s newsletter, or listen to his podcast episode where he talks about the most powerful razors he’s discovered so far in life.
Mapped: How Much Does it Take to be the Top 1% in Each U.S. State?
An annual income anywhere between $360,000-$950,000 can grant entry into the top 1%—depending on where you live in America.
How Much Does it Take to be the Top 1% in Each U.S. State?
There’s an old saying: everyone thinks that they’re middle-class.
But how many people think, or know, that they really belong to the top 1% in the country?
Data from personal finance advisory services company, SmartAsset, reveals the annual income threshold at which a household can be considered part of the top 1% in their state.
Some states demand a much higher yearly earnings from their residents to be a part of the rarefied league, but which ones are they, and how much does one need to earn to make it to the very top echelon of income?
Ranking U.S. States By Income to Be in the Top 1%
At the top of the list, a household in Connecticut needs to earn nearly $953,000 annually to be part of the one-percenters. This is the highest minimum threshold across the country.
In the same region, Massachusetts requires a minimum annual earnings of $903,401 from its top 1% residents.
Here’s the list of all 50 U.S. states along with the annual income needed to be in the 1%.
|Rank||State||Top 1% Income|
|Top 1% Tax Rate
(% of annual income)
California ($844,266), New Jersey ($817,346), and Washington ($804,853) round out the top five states with the highest minimum thresholds to make it to their exclusive rich club.
On the other end of the spectrum, the top one-percenters in West Virginia make a minimum of $367,582 a year, the lowest of all the states, and about one-third of the threshold in Connecticut. And just down southwest of the Mountain State, Mississippi’s one-percenters need to make at least $381,919 a year to qualify for the 1%.
A quick glance at the map above also reveals some regional insights.
The Northeast and West Coast, with their large urban and economic hubs, have higher income entry requirements for the top 1% than states in the American South.
This also correlates to the median income by state, a measure showing Massachusetts households make nearly $90,000 a year, compared to Mississippians who take home $49,000 annually.
How Much Do the Top 1% Pay in Taxes?
Meanwhile, if one does make it to the top 1% in states like Connecticut and Massachusetts, expect to pay more in taxes than other states, according to SmartAsset’s analysis.
The one-percenters in the top five states pay, on average, between 26–28% of their income in tax, compared to those in the bottom five who pay between 21–23%.
And this pattern exists through the dataset, with higher top 1% income thresholds correlating with higher average tax rates for the wealthy.
|State Ranks||Median Tax Rate|
These higher tax rates point to attempts to reign in the increasing wealth disparity in the nation where the top 1% hold more than one-third of the country’s wealth, up from 27% in 1989.
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