Imagine standing in the center of a circle. Inside this circle you are super confident. You know what you are doing. You have gained experience. People trust and respect your opinion. Most of the things you do succeed. This is your circle of competence.
It helps to know the limits of your circle of competence. It is well advised to invest in things within your circle of competence. It helps to know how ignorant you are on some subjects. This way you don’t make silly mistakes. It helps to get some guidance when you exceed your circle of competence.
Our circles of competence can expand or contract depending on how fast we acquire more knowledge, skills and experience. Generally speaking the larger your circle of competence the greater your chances of acquiring a lot of riches.