What should we pursue in the long-term?

Our life is filled with choices on what is worth pursuing in the long term. The key question here is whether incremental amounts of whatever we pursue diminish or compound in value.

Economists have long known that consumables diminish in value with increase in quantity. Suppose I have just eaten an apple, I am less likely to appreciate eating a second apple. $1 million dollars is more worthy to a pauper than to a person who already has $10 million. A person who has 50 formal shirts clothes is less likely to value the 51st that his son gifts him.

The curve between consumption and well-being has an inverse relationship. The more of something we consume, the less satisfaction it brings us. That is why people who base their success on consumption feel empty even when they succeed beyond their wildest dreams.

Not all pursuits diminish with quantity. Some of them compound. This is true of expertise. A person with 10 years of domain experience is worth more than 10x of an amateur. It is also true of physical fitness and mental stability – athletes with 10% slower heart rates are in leagues of their own. Besides, the accumulation of expertise and proficiency is an endless of joy, far into one’s advanced years.

To chase something that diminishes in increments is to feed a demon who gets hungrier with each meal. The only sustainable long-term pursuits are the ones that compound in value.

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