Recently I’ve been dealing with the issue of time scarcity. Between this site, my regular job, preparations for the CFA exam, and other projects, things get busier every day. I wouldn’t have it any other way, but in order to fit everything in, I’ve been searching for new ways to use time more efficiently.

Through reading books and articles, I’ve found a dozens of time management tips. Some have been more useful than others, but as I continue to think about it, I’ve realize that it comes down to one essential concept. If you can master this one time management tip, then all the others become trivial.

There is nothing secret or revolutionary here. It’s a basic economic principle that I’m betting you already know. In fact, it’s so simple that it’s tempting to ignore in favor of flashier alternatives.

Ready to hear it already? The ultimate time management tips is:

Cut off activities at the point of diminishing returns.

Simple isn’t it?

Problems with time management arise, not from the activities we choose, but from the amount of time we allocate to each activity. The activities that are essential to productivity are the same ones that leach away valuable time.

Consider the example of email. The first 15 minutes you spend reading and responding to email each day is by far the most productive. This is when you have a ton of incoming mail to process. You’re focused on getting through it all as quickly as possible by identifying the relevant parts of each message and sending quick replies.

But this level of efficiency isn’t sustainable. The longer you stay in that inbox, the lower the marginal returns on your time. After 15 minutes you might not have any important messages left, so you start spending more time on group email lists or casual conversations with friends. After half an hour, email has become a complete waste of time because you have nothing to do besides click “refresh” every 30 seconds.

Break down the productivity of any activity and you’ll find a similar distribution. The beginning brings in the big results until the peak is reached, followed by a sharp decline. The trick is cutting off each activity right after the peak and switching to something new, where high levels of efficiency are possible.

This easier said than done. It’s hard to spot the peak when you reach it, and moving seamlessly from one task to the next is a major obstacle. To improve your time management, focus primarily on two areas: experience and self discipline.

Experience

To apply the law of diminishing returns, you need to determine the point when returns start to decline. This depends on many factors. The only way to figure it out is through experience. This doesn’t come automatically. To find the “sweet spot” you’ll need to pay careful attention to your own work habits. How long can you stay productive? What activities do you like to drag out? Where can you salvage time?

By constantly asking yourself these questions, adjusting your behavior, and evaluating the results, you’ll be able to gradually optimize your work habits.

Self Discipline

The second cornerstone of time management is self discipline. You might be able to spot the perfect time to change activities, but if you don’t have the self discipline to make the move it doesn’t matter.

Developing self discipline takes time and practice.

The best way to improve is to impose time limits on yourself, then record and schedule them. If you only make a mental note, it’s easy to forget or ignore, but when you deliberately set alerts to remind yourself to change activities you solidify your commitment and make yourself accountable.