Diminishing Returns can most easily be understood in terms of a pie-eating contest. A single piece of pie is divine. A second piece of pie is a bad idea for a couple reasons, but it still tastes just about as good as the first piece. By the third and fourth you’re getting sick of all this sweetness. By the time you’re six pies in you wish you’d never heard of the confection.

Mankind’s natural assumption is that one plus one equals two. If you get one piece of pie’s enjoyment out of your first piece of pie then your second piece should also give you one piece of pie’s enjoyment, right? More pie = more happiness. That’s not how it works out in practice though; your second piece is less yummy than the first, and the third is less yummy than the second. By the time you’re a serious contender in a pie eating contest the numbers go negative; the last thing you want is to eat a 23rd piece of pie.

Here are a few more real life examples:

1)Doubling teacher’s salaries will not double the quality of education the kids receive.

2)Doubling school’s budgets won’t double teacher’s salaries.

3)An hour of the news every week makes you well informed.

Twenty more hours only makes you neurotic.

Please share your diminishing return examples.

Interesting topic...

I'd say it depends on the goal(s) as well as the abilities of the person in question to manage the situation.

With eating pie for dessert, the desire is for something sweet to "finish off" a meal. Eating more keeps the meal going past the point where caloric needs are met and swells to overindulgence. A person with diabetes might find one slice too much, so anything after a single bite brings less pleasure.

With drinking, the desire is for a mild relaxation and good times. However, once that 5th or 6th drink goes down the body starts to send it back up and you get relaxed to the point of impaired judgment.

With rentals, the desire is for more income, but what does more income do once you're well past the point of daily needs and most wants? Why build a portfolio of 1000 units if 100 gets you everything you want? John Schaub talked about this at the last Conventions. 30 units are all he needs. More creates work work and less freedom for him. He is content where he is. Would adding 30 more units bring him any more pleasure or satisfaction than what he presently has?

Wise men (and women) practice temperance: not too much, not too little. However, I think based on who we are defines what is too much or too little. This is part of life: finding out where our limits are and making the conscious decision to stop when we've achieved what we truly desire.

I watched Wolf of Wall Street recently. The main character on there buys a yacht. Very nice and the first couple of times out it would be fun, but .... then what? Buy a bigger yacht? What difference does earning another $1 million make to a person who already has $1 billion?

The same with entitlements. Increase them and often they just increase the appetite for more and reduce the efforts to self reliance.

the number of keys on your keychain is inversely proportional to ones happiness.

That is why I have just 1 master key for a zillion locks

We've all heard that for every 5 mph slower you drive, you klimprove your MPG by x (I don't actually remember the number). But if you slow down enough, you'll actually STOP MOVING. If you are stopped with the engine running, you're getting ZERO MPG.

I raise rabbits and chickens for meat. These animals are bred to EAT!

They will eat pretty much all day long. They grow rapidly but will eventually reach a point that they won't grow a fast as they did in the beginning. Usually right before adulthood. So there comes a point that it doesn't justify letting them go on because they are basically wasting food due to slower growth.

Recently a friend and I were discussing the 1.6 BILLION lottery and why we would never want to win that much. A couple of coworkers thought it would be great to win that much.

$100,000 lottery win would be ok but not hundreds of millions. If the big win resulted in the release of your name, the whole world would be “your new and bestest friend”. I don’t want or need millions of new, best friends.

Even if I could remain anonymous about the 1.6 billion dollar win, what would I do with kind of money?? Just too much work.

It’s in the same boat as 30 rentals is all Schaub needs. In my case, 10 paid off units is all I need.

We've decided 30 units is our limit too. All within 15 miles max. We have a 31st but have never completed the ADU as it works so well for storage. Maybe eventually...but not likely at this point.

I have a mild disagreement with #1 - my hubby started teaching when teachers were paid poorly. He had to work vacations and weekends at a side job in order to make ends meet - which meant that he did not have time to take courses to improve his skills or even to create better lessons.

About 10 years in, the salaries were brought up to a level that allowed him to spend more time taking classes, devising new and better lessons and methods, etc. He was more focused, and certainly did a much better job, eventually being considered a master teacher in his district. He has actually met students from the early days and apologized to them for what a poor teacher he'd been.

As for number 2, oh yeah - school districts around here spend more $ on administrators, while dumping more students and responsibilities on teacher without more than a COLA increase once in a while. So glad he retired!

Sisco,

As I write this on Thanksgiving night I have one answer:

Turkey.

Pie does not have diminishing return. Pie is good forever!

Early on we would excitedly run to look at the newly purchased home after closing. After about 75 we would would go to lunch before going to the new house. As the empire grew it became “tomorrow” and “next week”.

Now we own some properties that Wifey has never seen. She says she’s fine with that.

I do show her pictures.

And she enjous the income. THAT return does not diminsh!