The Circle of Competence is the area of knowledge and expertise within which you feel confident and capable. It’s the range of topics or subjects that you understand deeply and can make informed decisions about.

Know your circle of competence, and stick within it. The size of that circle is not very important; knowing its boundaries, however, is vital. — Warren Buffet

Knowing the boundaries of one’s circle of competence is far more important than its size. By understanding the limits of your knowledge, you can avoid venturing into unfamiliar territory and make more informed choices

You need to identify your own strengths and weaknesses. If you participate in activities where others have advantages you don’t possess, you’re likely to fail. That’s a near certainty. It’s crucial to determine where you have an edge and operate within your own area of expertise.

Identifying the boundaries of your circle of competence requires a honest self-assessment. It’s important to acknowledge your strengths and weaknesses without overconfidence or false humility. Consider the areas where you have consistently demonstrated success, where you feel comfortable making decisions, and where you can easily explain your thought process. These are likely to be within your circle of competence.

Conversely, areas where you struggle, feel uncertain, or find it difficult to articulate your understanding may fall outside your circle of competence. It’s essential to recognize these limitations and avoid venturing into unfamiliar territory without adequate preparation or support.

This is not about avoiding challenges or limiting your growth. Instead, it’s about making informed decisions and maximizing your chances of success. By staying within your circle of competence, you can focus on areas where you have a competitive advantage and leverage your expertise to achieve your goals.

Summing-up: Accurately gauging what you know — and more importantly, what you don’t — can mean the difference between success and failure.