I can’t emphasize this enough: the quickest and easiest way to screw up your life is to take on too much debt. The primary reason people spend decade… - Josh Kaufman

these foundational business concepts mental models, and together, they create a solid framework you can rely on to make good decisions. Mental models are concepts that represent your understanding of “how things work.” Think of driving a car: what do you expect when you press down on the right-side pedal? If the car slows down, you’ll be surprised — that pedal is supposed to be the accelerator. That’s a mental model — an idea about how something works in the real world.

At the core, every business is a collection of five Interdependent processes, each of which flows into the next: 1. Value Creation — discovering what people need or want, then creating it. 2. Marketing — attracting attention and building demand for what you’ve created. 3. Sales — turning prospective customers into paying customers. 4. Value Delivery — giving your customers what you’ve promised and ensuring that they’re satisfied. 5. Finance — bringing in enough money to keep going and make your effort worthwhile.

Contrast is often used to influence buying decisions. In the business world, Contrast is often used as pricing camouflage. In the case of the $60 shirt, it may be possible to buy the exact same shirt at another retailer for $40, but the less expensive shirt isn’t present in the store where the comparison is taking place. What is present is the $400 suit, which makes the $60 shirt look like a bargain. Compared with a $2,000 computer, a $300 extended warranty appears inexpensive, even though it increases the total purchase price by 15 percent. Compared with a $30,000 vehicle, spending $1,000 for leather seats feels like a bargain. Compared with buying a $400,000 house, spending $20,000 to remodel the kitchen feels like no big deal.