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You can find out more information by listening to episode 11 of this podcast.
“All Else Equal” Mental Model or Ceteris Paribus – Show Outline
The full show notes for this episode are available at https://www.diyinvesting.org/Episode29
Background of Ceteris Paribus Mental Model
- Often a tool used in economic theory
- Especially used for explaining concepts such as supply and demand
‘All Else Equal’ Mental Model applied to Personal Finance
- Increased income is better than lower income
- Lower expenses are better than higher expenses
- The longer you live, the more wealth you’ll build
Application to Investing
- The All Else Equal Mental model can be applied to investing to create Investing First Principles
Next Episodes: A series on First Principles of Investing
- Uses what learned in this episode and combines it with Episode 9 where we first introduced the concept of First Principles.