Circle of competence: the uncle with a tip on everything

At the family function, the plates are barely filled before someone turns to Mama ji. He is a good doctor, the kind who has treated half the neighbourhood. Today the question is a plot on the new highway. Last month it was a share tip. Before that, which phone to buy for Dadi. Mama ji answers each one in the same calm voice, and the family nods, because the doctor said it.

What the model is

A circle of competence is the set of things you know well enough to judge, from your own work and your own mistakes. Outside the circle you may be intelligent and sincere, and still be guessing. The idea is often credited to Warren Buffett, who used it for investing: stay inside what you understand, and say plainly when a thing is outside.

The circle is not about being clever. Mama ji has a large circle in medicine. A plot on a highway is a different field, with different questions: who owns the land, what the papers say, what the road plan really is. His medical years do not answer those.

The example, step by step

Meera, 31, works in a Nagpur bank branch. Her father wants to put savings into a plot, because Mama ji said the area will grow. She decides to draw two circles on a sheet of paper.

First, Mama ji's circle. Under it she writes what he has real years in: diagnosing, treating, knowing when to refer a patient. Then she asks where the plot advice sits. It sits outside, and nothing in his work taught him to read a land title.

Second, her own circle. She writes what she can actually judge: she reads loan papers every day, so she can read a sale document's terms. She cannot judge whether the highway will be built on time. She writes that too, honestly, on the outside.

Now the edge has a name, and three moves are possible. Ask: find someone whose daily work is land papers and ask them the questions. Learn: spend a few weekends understanding how a title check works. Or pass: if neither is possible, leave the decision for later. All three are better than acting on a confident voice from the wrong field.

Where it goes wrong

The circle can turn into an excuse. Saying "that is outside my circle" to avoid every new thing means the circle never grows. A circle grows through work and mistakes, not through a quick read. And the opposite mistake is just as easy: deciding that Mama ji knows nothing. He knows medicine well. The model asks only that his advice be weighed by where it comes from, and the family can keep their respect for him.

One thing to try today

Before you act on the next tip, ask one question: does this come from inside that person's own work? Write the answer in one line, with the person's name and the years of work behind it. If the line is empty, treat the tip as a lead to check, not a reason to act.

This is a way to think, not financial, medical or legal advice.

Each Sunday: one mental model and one real decision to try it on. Find more in the /models library.