As a first-generation entrepreneur, I’m committed to learning as much as I can about entrepreneurship. The best way I’ve found to do it is to study other entrepreneurs and their mental models, so I read a book every week, usually a biography. I share it in my Library on this site, and every Sunday, I post the latest book I read.

Earlier this year, I read the updated version of Poor Charlie’s Almanack, a collection of Charlie Munger’s speeches on mental models and psychology. Periodically, I listen to a condensed version of Munger’s “Psychology of Misjudgment” speech (see here). These resources piqued my interest in learning how people make decisions and are persuaded to make decisions or take action.  

Munger and others have recommended Influence: The Psychology of Persuasion by Robert B. Cialdini, so I gave it a read. The book is considered a classic, and I can see why. Cialdini updates it periodically. I read the 2006 edition because I already owned it, but now I plan to read the 2021 edition, too.

This book delves into the intricacies of the psychology of compliance (doing what people are asking you to do). It also dedicates a chapter to the big-six psychological triggers, including examples of how they’re used:

• Reciprocation
• Commitment and consistency
• Social proof
• Liking
• Authority
• Scarcity

This book was informative and equipped me to be better at recognizing when these triggers are being used against me. The case study–style examples effectively drove home the points and made them less theoretical.

An interesting observation was that Charlie Munger borrowed heavily from the concepts in this book for his “Misjudgment” speech, and the principles are prominent in Poor Charlie’s Almanack, too. Charlie was smart enough not to reinvent the wheel. Instead, he built on Cialdini’s principles and applied them to investing to create his billion-dollar fortune.