VALUE: After Hours (S07 E37): Give Yourself a Longer Time Horizon—or Only Bad Options Remain

During their recent episode, Taylor, Carlisle, and Luca Dell’Anna discussed Give Yourself a Longer Time Horizon—or Only Bad Options Remain. Here’s an excerpt from the episode:

Luca: Yeah. So, I always make the example of imagining that one day a mafia guy comes to you, and he says, “I will kill you if you don’t give me one million tomorrow.” Now, imagining that you are a normal person, you don’t have a million already in your bank account, what do you do? Maybe you sell your organs and you take the proceeds, and you go to the casino, and you put them all on the 36, and you hope that you win. The thing is, because of the very short time horizon, you only have bad options.

Now, imagine that the mafia guy tells you you have five years to give me one million. Now, your options are a bit better. You’re still not certain, but you have better options. Maybe you open a startup, you work super hard for five years, and then let’s say that you have, I don’t know, a good, decent possibility of grabbing the one million.

Now, imagine that the mafia guy tells you, “I will kill you if you don’t give me one million in 30 years. Now, it’s almost certain that of course you need to work hard, you need to make some sacrifices. But if you are decently smart and work decently hard, you can do it. So, the point is the longer your time horizon, the better options open up to you. If you want to build a successful business in 30 years, but even just in 10 years, you have some decently good options. If you want to build a very attractive physique in three years, you have very decent options and you do not need to take risk, or weird medicines or whatever.

Same thing. If you want to get a super great attractive girlfriend, spouse in five years, completely doable. But if instead you give yourself an artificially short-term horizon. I want to get an attractive physique in one month, I want to get a girlfriend tonight, I want to become a millionaire next year, then you only give yourself bad options.

And so, my suggestion is give yourself a reasonable time horizon for which you can be solidly certain, in which you can build success in a solid way that gives you relatively certain, and plus it enables you to enjoy life while you’re pursuing the success you seek. It’s a much better strategy.

Jake: What’s the name for that? Is there any math behind it or something like that we could pinpoint that or is that just a Luca special, [chuckles] the idea of optionality, opening up on farther windows?

Luca: Well, I don’t know if there is any mathematical principle. It’s just one of my rules, let’s say, yeah, one of my rules for Winning Long-Term Games is to give yourself a reasonable time horizon and everything becomes easier after that.

Jake: Call it Luca’s Razor.

Luca: Yeah, you can call it Luca’s Razor. I like that.

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VALUE: After Hours (S07 E37): Give Yourself a Longer Time Horizon—or Only Bad Options Remain

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