Cultivating Long Term Thinking

We all know the progress one can make and results one can achieve by taking a long term approach. The law of compounding is applicable everywhere. Be it money, relationships or sports.

To cultivate long term thinking in a world running behind quick results, Daniel Hillis founded the Long Now Foundation with Steward Brand in 1996. This foundation is constructing a clock which will last 10,000 years. That's a long long term. These are the words of Daniel when proposing the clock project -

"When I was a child, people used to talk about what would happen by the year 02000. For the next thirty years they kept talking about what would happen by the year 02000, and now no one mentions a future date at all. The future has been shrinking by one year per year for my entire life. I think it is time for us to start a long-term project that gets people thinking past the mental barrier of an ever-shortening future. I would like to propose a large (think Stonehenge) mechanical clock, powered by seasonal temperature changes. It ticks once a year, bongs once a century, and the cuckoo comes out every millennium."

I am not joking when I say great things happen in the long term. Have you seen the Duomo in Milan? It's a fantastic piece of architecture. It took six hundred years to build it. I visited Milan in 2019 and was awed at its beauty.

It’s not just the Long Now Foundation that’s trying to cultivate a culture of long term thinking. To push Companies towards a long-term orientation, Eric Ries, author of The Lean Start Up, has set up the long term stock exchange . Eric wants to change the short term focus of public companies to a more long term approach where success is not measured in quarterly results but in years and decades.

Ries thinks companies are motivated primarily by short-term incentives is that their executives are motivated by those same short-term incentives. When the leaders of a company get personally wealthy from certain achievements — a certain share price, a certain quarterly performance — the decisions they make tend to follow naturally.

We tend to take the path of least resistance in the short term when we clearly know that great results could be achieved in the long term. We have way too many real life examples to learn from. Warren Buffet is one of them. Morgan Housel writes in his latest book -

We can spend years trying to figure out how Buffett achieved his investment returns: how he found the best companies, the cheapest stocks, the best managers. That’s hard. Less hard but equally important is pointing out what he didn’t do. He didn’t get carried away with debt. He didn’t panic and sell during the 14 recessions he’s lived through. He didn’t sully his business reputation. He didn’t attach himself to one strategy, one world view, or one passing trend. He didn’t rely on others’ money (managing investments through a public company meant investors couldn’t withdraw their capital). He didn’t burn himself out and quit or retire. He survived. Survival gave him longevity. And longevity—investing consistently from age 10 to at least age 89—is what made compounding work wonders. That single point is what matters most when describing his success.

You cannot quit or retire. I am not going to. Living the long life is not easy. But I am sure it’s worth it.