The Point of Diminishing Returns by Ben
One of the smartest college instructors I had back in the day taught me one of the most valuable lessons I have ever learned in school. A principle that I have used many times over to succeed in several areas of my life. It is called “The Point of Diminishing Returns”.
The principle of the point of diminishing returns can be applied to many things. It goes like this.
A high school student is preparing for a final exam. If the student studies for 2 hours, he can probably be assured at least a “C” for a grade on his final exam. If he studies for 4 hours, he can probably be assured at least a “B”. If he studies 6-8 hours he can probably be assured an “A”. If he studies for 10 hours, the best he can achieve is an “A+”. If he studies for 20 hours, the best he can achieve is an A+. Any amount of time spent studying over 10 hours cannot achieve anything better than an A+. At some point, investment on return max’s out.
The same principle can be applied towards spending money. Lets use a rural fire department as a good example. People who live in rural areas know that time and distance from the fire department is a negative, if their house or barn catch fire. If someone living in the country has a fire, they call 911. From that point forward, living in the country is very different than if you live 8 city blocks from the fire department in town.
The 911 dispatcher sends out a call to the rural fire department volunteers. They may be sleeping, they may be at work, or whatever. The volunteers hop in their vehicles and drive to the rural fire department where the trucks are located. From there, they hop in the fire truck and drive 10, 15, or 20 miles to the location of the fire. Depending on the circumstances, by the time they arrive, there may be nothing they can do to save the burning structure.
So having said that, lets apply the point of diminishing returns to the rural fire department. Say the rural fire department has an annual budget of $250,000 dollars. I’m just throwing that number out as I have no idea what an annual budget of a rural fire department is. The budget pays for an old fire department building that once was an old commercial business building, a couple of used fire trucks, and enough used equipment to supply 20 volunteer fire fighters. It may get the job done with room for improvement.
So we bump the annual budget up to $300,000. That allows some newer equipment and maybe adding a few more volunteers. Bumping the budget up to $400,000 allows new fire trucks to replace to used fire trucks. Bumping the annual budget up to $500,000 allows a brand new fire department building, new fire trucks, and all new equipment for 25 volunteer firefighters. Very nice.
The problem is, from the time the 911 call comes in, the call goes out to the 25 volunteers who still have to drive to the fire department, still have to hop in the fire trucks and still have to drive 10, 15, or 20 miles to the fire, nothing has changed. The end result is the same. The burning structure cannot be saved because of inherent factors.
Every time I read about our local, state, and federal government spending taxpayer money, I can’t help myself from applying the principle of diminishing returns and realizing how foolish, wasteful and just plain stupid some of the spending is. Spending thousands, hundreds of thousands, or millions of dollars that have absolutely no positive impact for the taxpayers investment. A lot of people in charge of our tax money are totally clueless and cannot even apply a simple principle like the point of diminishing returns. It starts right here in Langlade County and the City of Antigo. Hold your local representives accountable for the money they spend.
.
.