Rate-Limited Long-Lead-Time Activities
Rate-Limited Long-Lead-Time (RLLLT) activities are activities that have the following characteristics:
- Consistency: Activity must be done consistently over a certain recurring time period (e.g. daily, weekly, monthly, etc) in order to yield results
- Goldilocks Zone: There is a narrow range of time and energy that one can dedicate to this activity in each recurring time period in order to produce results, hence “rate-limited”. Too little time and energy and the results fail to materialize; too much time and energy leads to abandonment and/or burnout before results materialize.
- Delayed Result: It takes many cycles before results materialize, hence “long lead time”. In many cases the result is preventative, like in the case of brushing your teeth.
- No Catch-Up: The target result of this activity cannot be achieved through a large short-term effort.
Some examples of Rate-Limited Long-Lead-Time activities include:
- Brushing Your Teeth
- Learning to play a sport
- Saving for retirement
- Learning another language
Side Note: These sorts of activities are similar to a long convexity investment in options trading. When you are long convexity you are betting on higher volatility. When you win, your profits are proportional to the volatility of the underlying asset. When you lose, your losses are fixed to your bet size. I recommend reading Nicholas Nassim Taleb’s blog posts and books, Chris Cole’s Market Views, or googling “long convexity explained”.
If you don’t care to go down that rabbit hole, it’s not necessary. What’s important is that Rate-Limited Long-Lead-Time activities and long-convexity investments have the same payoff structure where losses are capped but gains are not. The “losses”, in the case of RLLLT activities, are the opportunity costs of the time and energy you spend on the activity. The “gains” in some cases are things you get to avoid and in other cases are opportunities you get.
Preventative RLLLT activities are best described by the proverb, “An ounce of prevention is worth a pound of cure.”
To get a better understanding of RLLLT activities, let’s go over two specific examples:
Brushing Your Teeth (Preventative Goal)
The goal of brushing your teeth is to prevent cavities, gum disease, and ultimately the loss of teeth. Let’s go over the four characteristics listed above to see why brushing your teeth is an RLLLT activity:
- Consistency: Brushing your teeth only works if you brush consistently. Nobody takes days or weeks off brushing their teeth and ends up with good oral hygiene.
- Goldilocks Zone: It’s recommended to brush your teeth 2–3 times a day. That’s a pretty narrow range, and it makes sense. One time a day is usually not enough, and brushing four or more times a day is likely to do more harm than good.
- Delayed Result: Say there are two people, one who brushes their teeth two times a day, every day, and one person who brushes their teeth three or four times a week. It will be a while until the second person starts suffering from cavities and gum disease. The reward for the first person is that he doesn’t have to deal with cavities and gum disease.
- No Catch-Up: Brushing your teeth vigorously before you go to the dentist isn’t going to make up for the fact that you didn’t brush twice a day for the past six months.
Learning Another Language
- Consistency: You have to study consistently to get the best result when learning another language. If you take time off, you’re likely to forget what you learned and have to relearn it when you start studying again.
- Goldilocks Zone: There’s a limit to the amount of time you can study each day before it becomes tiresome. Conversely, if you only spend a minute each day studying, you won’t make much progress. The sweet spot seems to be anywhere from 15m to 1hr a day.
- Delayed Result: It will take a long time until you’ll be able to hold a conversation, read or write in the language you’re studying. When you reach fluency, however, you’ll be able to communicate with a group of people that you previously couldn’t.
- No Catch-Up: Cram studying doesn’t work for languages. Fluency is developed over time with repeated practice and exposure.
I’ve found that these sorts of activities are great because a) they’re relatively cheap time and energy-wise, especially if you have nothing better to do, b) they keep paying off far into the future, and c) the earlier you start, the more time and energy you can save.