Do this strategy or you will be operating at the level of a "life fool", giving away life for a lesser payoff.


The term "marginal" or "on the margin" refers to the extra benefit I can get from doing x amount of extra effort.  (Of course, that effort is called "marginal effort" or extra effort units to expend.)

The term "return" (or "effect" or benefit or payoff) refers to how much I get back per amount of effort put forth.


People who figure this out and apply it masterfully will do more than 100 times better than you, in terms of total benefits they receive.  Other than a few who were lucky (which is not a good thing to play on), the top 1% applied that.  [Note that, with rare exceptions, which are often newsworthy, they did this through the application of effectiveness strategies, NOT by stealing from others.  In fact, they often benefited lots of other people, such as did Steve Jobs and Bill Gates.]

Of course, those people are not 100 times better than you or even better than you.  They are just using the same things you have: the ability to learn and the ability to think, and then applying those.  You are virtually equal, as a functioning human being at the basic level of "human being".   But your effectiveness is not equal. 

The objective of course is to convert you to being able to do 100 times better, for your happiness, for the benefit of other people, for whatever is of value to produce more of...

The paramount principle you will need to commit to run your life on is The 80/20 Principle

And several principles underlying that are based on the idea of marginal returns. 

The basic idea is to learn to invest your extra (marginal) time units into producing the greatest benefit per amount of time.  The "benefit" is a "return" or an "effect" - accordingly the ability to do this is called the skill of "effectiveness". 

And we want you to be so life effective that you will produce 100+ times the benefits for you - happiness, satisfaction, good feelings about life and yourself - alot of which is based on the ability to produce results effectively in life - that is called "self efficacy" - without a sense of this, I guarantee you cannot be happy!


You eat a first piece of pie     = lots of satisfaction units
You eat a second piece of pie = big drop in extra units

And so on, until you couldn't care less or you get sick of each extra (marginal) piece eaten or you feel more like eating or drinking something else, or having water or exercising. 

All of economics, despite what you might have surmised, is based on human benefits (money being one form of conveying these benefits).  Units of satisfaction derived are called "utils" by economists - they seek to "maximize your utils".  (Read the piece:  Economics - The Philosophy - "The Maximization Of Units Of Satisfaction".  Video lesson, 12:13:  "Marginal Utility" at the Khan Academy.) 

The most common of the basic graphs in economics shows a decline (at some point) in the utils derived from every extra unit of input or effort.  This phenomena happens in a manufacturing plant as well as the human "plant".  

However, in some mechanical endeavors in this world, some situations will cause "increasing marginal units" (per amount of effort) - such as using "economies of scale" by building a manufacturing plant that can produce more goods more cheaply because of size/scale (and thus benefit the consumer, and, of course, the organizer who put them all together).  This reality was what has rescued mankind from so much poverty (although there is still alot of poverty, we are far better off than if we didn't make at least some of the people in the world more productive (and employed) and able to produce more because of "organizing" resources to produce more efficiently.)

Anyway, back to diminishing marginal returns.   The amount of pie eaten illustrates the effect, of course.  But, it also applies in business - if one has a manufacturing plant, at some point one cannot add more workers into the plant, because at some point they'll get in each other's way so that production per man will drop.    (Enter the term "law of diminishing marginal returns" into the search engine to go to a document that gives more explanation and examples).

The point here, without a complete economics course, is that we need to always be aware of how much extra can be produced from extra inputs (effort, etc.) and realize that more input will, at some point, produce less output per amount of input, per the law of diminishing returns. 

The classic example might be where a person has accumulated a certain amount of money that was sufficient to live well on so that the marginal worth of money in terms of personal benefits is worth less to him and other activities would produce more utils in terms of human benefits.  When I got to that point, I quit... quickly.  My marginal return, in terms of value to me, per amount of time would be higher in my retirement endeavors and working on forming the Life Management Institute in order to have an impact in terms of making other people more capable of being happy.  (I already had enough for myself of 'selfish' personal benefits, so extra units had little worth - or at least less worth to me than the feeling I might get from contributing to and being of service to others.  You might also note the number of stories you've read of that very same trade-off being true of other financially successful people.)


Suppose someone asked you to do one of two tasks for an hour of your time (and both took the same effort) but the requester's judgment of the worth of what would be produced was such that one was worth far more than another.  And that person said they would give you $10 for task 1 and $5 for task 2.  

Which would you take?  For the hour spent (you input), you could get a higher return - wouldn't you be a fool, all other things being equal, to accept the $5 an hour task?   

So, our "smart strategy" would always be to figure out what we could do that would provide the highest benefit (a benefit that is even greater than watching TV and drinking beer...) per amount of effort. 

When one activity began to produce less extra benefit and there was nothing we could do that would give us bigger benefit, we would switch to doing an activity providing the higher marginal benefit per unit of input.  We would always seek something where we had more benefit above the cost so that "skim more off of the top" - meaning a greater benefit (but not dishonestly, as dishonesty has a huge human cost - and remember that the basic of all economics is to provide the greatest benefits in terms of human value, not money!).

Many people know they should seek and do what is of the highest marginal benefit, but many of them do not practice it.   They are constantly putting out their time to earn $5 (or the equivalent in human benefits), whereas they could do more learning of how to be happier and more effective ("earning more benefits") and to produce a vast amount more of marginal benefit at the time and benefit in total over time!!!! 

So I hope you build this into your planning routine, using something, at least like this question:  What can I do now (or soon) that is the most impactful for my time? 

If you just do that more often, your effectiveness will increase several fold.   If you religiously practice it, your effectiveness will increase much more than 10 times.  (That means you will get 10 times the benefit or more of what other average people get or than you yourself used to get.)


Take The Pledge to use this strategy and to utilize The 80/20 Principle religiously and you'll be able to create an incredible life!  (You might even start with a grand dumping of all low payoff activities, such as is suggested in The Quickest Life Improvers.)

Making this decision will have the greatest effect on your life of all the decisions you could make. 

Consider reading and following this:

The Quickest Life Improvers

Read the links in the body of the piece on this page!

Understand, For Sure, How The Value Declines Over Time!!!

Enter into the search engine, to get this document with tables, "Law Of Diminishing Marginal Returns" and save alot of misdirected efforts!!!

Many people do not abide by this law, at great costs to themselves, such as in The Overachiever Is Not The Truly Productive, Happy Person.  This includes the mistakes made by the "Overcontributor" and "The Pleaser".

How To Look At Life In Terms of True Value

The subject here is "life economics", as differentiated from "money economics", but you should know and understand;

Economics - The Philosophy - "The Maximization Of Units Of Satisfaction"

From this page link into The Law Of Diminishing Returns