Saturday, July 22, 2006

Integration / acquisition ratio

7:00

The integration/acquisition ratio is a measure of how smart you become, as a result of reading or getting information from a variety of sources (TV, books, magazines, etc.).

Integration refers to your being able to create a heuristic, based on the information you just read, in order to make better evaluations and better decisions.

Acquisition simply refers to your getting information from books, magazines, workshops, conversations, etc.

As you can imagine, the integration / acquisition ratio for most people is very, very low. We get information from TV, magazines, etc. and we forget it just as fast. In fact, we forget over 90% of what we learn. This has been proven in studies, notably by Donald Laird.

Smart people usually have a very high integration / acquisition ratio. Billionaire Charlie Munger is one of those people. As he reads books, he mentally creates a heuristic or "mental model" which would then allow him to make better decisions.

Anthony Robbins also has a very high I/A ratio, except that he refers to "distinctions" (not heuristics or mental models).

But the idea is the same: you have to start using what you read, and keep practicing the principles you learn from books, instead of reading too much.

It is much better to apply one principle 1,000 times in order to master it, than to read and vaguely remember about tons of ideas or pieces of information.