Two ways to apply the law of diminishing returns so you can invest your limited resources strategically
In my last essay I talked about how hard it can be to avoid all-or-nothing thinking.
Knowing things will never be perfect can make putting in effort feel futile. The reframe I presented is that you can get closer to perfection without ever reaching it — you can make things better. It seems obvious once it’s written down and yet it bears repeating: your effort to improve your life isn’t wasted just because your life will never be perfect.
Now it’s time for a caveat.
The Law of Diminishing Returns
In economics, the Law of Diminishing Returns says that with more input, the rate that the output increases eventually tapers off.
This concept has applications in almost every area of life:
- Working more than ~40 hours/week leads to reduced output (and likely burnout)
- Exercising too much can lead to injuries (and likely set you back)
- Studying for too long results in decreased retention and understanding
This reduction in the rate of return is due to limited resources, such as your energy, your time, your money, and your attention — what I refer to here as effort.
Figure Out Where You Are On The Curve
Although I’ve argued that no effort is wasted, it’s important to understand where you are currently located on the curve to maximize the return on your effort investment.
If you’re just starting out, say, at writing essays, you can expect that with one unit of additional effort you will see a large gain in how much better your writing gets. Eventually, as you get better at writing, it takes more than one unit of additional effort to see the same improvement.
Your returns are diminishing!
What Can You Do With This?
I have three takeaways from the law of diminishing returns:
- Recognize that if you feel like you’re not making the progress you used to be, you’re probably right! And that’s a sign that you’ve improved and can change your strategy.
- Understand that there are a variety of different inputs you can leverage to continue to approach perfection.
- Ensure you’re using your effort wisely across all the curves in your life.
Let’s take a minute to explore these points in more detail.
Use Your Limited Resources Wisely
You’ve got a curve for all the different inputs you can use to improve your life.
Say your goal is to get better at golf. You might head to the driving range to hit a bucket of balls — improving quickly at first but eventually you’ll find that you hit a plateau with additional repetitions. This is when you might switch your input to money and hire a golf coach to help you with your form. Another burst of improvement before you plateau again. Now you might focus on increasing your time input and commit to golfing 9 holes each week.
They say what got you here won’t get you there — you have to change up your improvement strategy as you progress in the game.
Looking at the bigger picture, you have all these possible inputs for each area of your life: relationships, health, career, leisure.
Your limited resources (time, energy, attention, focus, money) might be better spent making gains on your relationships curve than on your career curve. For example, if you’re 80% of the way to perfect on your career curve and 65% of the way on one of your relationship curves, you could use your limited time to make the relationship 10% better, or to make your career 1% better.
It comes down to a cost-benefit analysis of where your effort can have the greatest return on investment.
Reflect Often and Redirect When Necessary
Your effort is never wasted but it may be spent more effectively elsewhere.
Being aware of past and current rates of improvement will help you monitor how well you’re using your limited resources, and when it might be time to change up your strategy. Keeping the big picture in mind, be sure to regularly reflect on how close to ideal the different areas of your life are, and reallocate your most precious resources accordingly. Realizing that there are many different ways to improve your life can be an energizing mental unlock when you’re feeling stuck.
Your life will never be perfect, but you can keep finding new ways to make it better.
This was the second piece in a short series about effort. You can read the first piece here: https://medium.com/@melissaphysics/why-its-still-worth-it-to-try-even-though-things-will-never-be-perfect-1b0e7d0ba056
