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Short term reward vs long term gain

WebShort-term thinking is a problem. We keep hearing this. Economists often tell us that it is all about the wrong incentives. CEOs are incentivized to deliver immediate returns for shareholders, governments are incentivized to win votes with quick-fix policies. Of course, the economists are right, incentives play a big role. But it is a much bigger problem than that, as an expert in human behaviour will tell you. Very young children exhibit an inability to sacrifice short-term reward for an increased longer-term reward: 1 sweet now or 3 in an hour? For most, it’s an impossible challenge. As children grow up some develop an ability to resist short-term reward. And recent research suggests this is a personality trait that leads to better life outcomes: more successful, happier, better relationships, more contented.

There appears to be a very strong, hard-wired human behaviour to go for short-term reward and those that can overcome this trait, (some find it easier than others because it has a genetic component) tend to do well in life.

There seems to be an obvious learning here for all of us. When faced with a short-term vs long-term reward scenario, first be aware that you are in that scenario and then accept that you may be drawn to the short-term solution for the wrong reasons (because you’re human). Challenge yourself to go beyond your instinct and properly analyze the situation. Weigh up the pros and cons and then make the decision.

This isn’t just good advice for politicians and business people but for everyone in every walk of life. You will give things up less, be financially more secure, be healthier, happier and probably more respected. And if the human race could rebalance with more long-term planning and less short-term thinking our planet would be much safer and its future more secure.