Impatience
Impatience is the tendency to weigh the present more heavily than the future, preferring immediate rewards over delayed but potentially larger rewards, often leading to suboptimal long-term outcomes.
THE IDEA
9. IMPATIENCE
The CEO of TransCorp wants his bonus today and therefore he makes a decision that increases this year's profit at the cost of a possibly larger profit in the future.
We give more weight to the present than to the future. We seek pleasure today at a cost of what may be better in the future. We prefer an immediate reward to a delayed but maybe larger reward. We spend today what we should save for tomorrow. This means that we may pay a high price in the future for a small immediate reward. For example, we buy things we can't afford on credit cards.
We are impatient in the short run and patient in the far away future. Studies show that we tend to become less patient when rewards are more immediate. We may discount delayed rewards more heavily when comparing them with an immediate reward than when both options lie farther in the future. For example, when a small reward is due tomorrow and a larger reward is due in one year, people often prefer the small immediate reward. But when the small reward is due in one year and the larger reward in two years, people tend to prefer the larger long-term reward. Studies show that one explanation for this is that outcomes occurring in the future are perceived as less certain.
Keep in mind
- Michel de Montaigne said: "I conceive that pleasures are to be avoided if greater pains be the consequence, and pains to be coveted that will terminate in greater pleasures." Consider both the short and long-term consequences of a decision. Weigh present good/bad against future good/bad. Short-term suffering may lead to long term pleasure.
When to use it
Deciding between saving for retirement or spending on a vacation now.
Choosing to study now for a better career later vs. watching TV.
A company cutting R&D spending to boost quarterly profits at the expense of future innovation.
Eating a healthy meal now to avoid health problems later.
FROM THEORY TO EVERYDAY LIFE
In practice
CEO short-term bonus
The CEO of TransCorp chooses an immediate bonus over a potential larger future profit, harming the company's long-term success.
Credit card spending
Buying items on credit for instant gratification, leading to debt and higher costs in the future.
A MOMENT TO REFLECT
Put it to work.
Think of a recent decision where you chose immediate gratification over a larger long-term reward. What could you have done differently?
How can you reframe a delayed reward to make it feel more immediate, such as focusing on the steps or progress?
When making a decision, consciously weigh short-term benefits against long-term costs. What questions can you ask yourself to avoid impatience?
CONTINUE THE CONVERSATION
Source texts
- Seeking Wisdom From Darwin to Munger (Peter Bevelin)