Action Limit Test

A decision-making framework focused on evaluating choices by considering their long-term impact if repeated consistently over time. Based on Guy Spier's investment philosophy.

Core Concept

• Ask yourself: "If I do this contemplated action given the same circumstances throughout my life, how will it turn out?"
• Helps avoid "just this once" rationalizations for poor decisions
• Forces consideration of compounding effects of repeated actions

Key Applications

• Personal Decision Making

  • Evaluate habits and choices by their long-term impact
  • Avoid rationalizing exceptions ("just this once")
  • Makes it easier to say no to things that don't align with long-term goals

• Business Decisions

  • Consider impact of policies if applied consistently
  • Evaluate business practices by their scalability
  • Example: If you say yes to every meeting request, where does that lead?

• Investment Philosophy

  • Focus on actions that enable consistent compounding
  • Don't jeopardize long-term compounding for short-term gains
  • Avoid strategies that could lead to catastrophic failure if repeated

Additional Frameworks

• Universal Action Test

  • Ask: "If everyone in the world did this contemplated thing, what would the world look like?"
  • Helps evaluate ethical implications of decisions
  • Creates perspective on societal impact

• Compounding Effects

  • Small actions repeated consistently have massive long-term impact
  • Both positive and negative behaviors compound over time
  • Focus on sustainable, repeatable practices

Benefits

• Provides clarity in decision-making
• Helps avoid short-term thinking
• Creates framework for consistent behavior
• Simplifies complex choices by focusing on long-term patterns
• Makes it easier to say no to things that don't serve long-term goals