2020-08-13 To Succeed in The Long-Term, Think in 5, 10, or 20 Year Time Frames

Humans can be pretty good at short-term thinking — but we’re not very good at thinking about the long-term consequences of our present actions.

The pressures of modern life make it incredibly difficult for us to project the implications of our choices and decisions far out into the future.

“As we live longer in more complex and interconnected societies, short-term thinking is being displaced as the main factor for a successful and sustainable future; now long-term planning is key for such achievements,” argues Stelian Nenkov, a Senior Quantitative Researcher at WorldQuant.

We easily confuse desires, wants and needs and tend to choose short-term gains over long-term benefits.

“A proper goal is something that you really need to achieve. Desires are things that you want that can prevent you from reaching your goals. Typically, desires are first-order consequences,” writes Ray Dalio, the founder of the world’s biggest hedge fund firm, Bridgewater Associates.

To make smart life-changing decisions, don’t confuse ‘goals’ and ‘desires’.

Be careful of your one-off decisions, they are laying the groundwork for a pattern of behaviour that can have future consequences you didn’t imagine. The compound interest of those decisions have huge implications over the course of a lifetime.