How to Be an Investor or a Borrower

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The investor versus borrower mental model is one that I find myself coming back to over and over again in my own life. When you choose short-term pleasure in the form of inactivity, social media, doom-scrolling, binge-drinking, or anything else, you are taking out a loan with a steep payback in the future. The goal is not 100% compliance with the investor mindset. That would leave no room for some of the fun, pleasurable short-term activities and decisions that add texture to life. Consider how your present actions are impacting your future self and embrace your point of balance.

A mental model is a way to think about the world. It is a tool—a lens through which you can simplify, evaluate, and make decisions in real time as you walk through life.

When faced with any key decision, you effectively choose one of two potential characters: Investor or Borrower. The Investor is a long-term thinker who makes an investment to delay gratification, while the Borrower is a short-term thinker who takes out a loan to experience pleasure now.

Investments compound positively and the future self cashes in on the rewards. Loans accrue interest negatively and the future self is stuck with the bill.