If you want to be the best tennis player in the world, you may start out trying and soon find out that it’s hopeless—that other people blow right by you. However, if you want to become the best plumbing contractor in Bemidji, that is probably doable by two-thirds of you. It takes a will. It takes the intelligence. But after a while, you’d gradually know all about the plumbing business in Bemidji and master the art. That is an attainable objective, given enough discipline. And people who could never win a chess tournament or stand in center court in a respectable tennis tournament can rise quite high in life by slowly developing a circle of competence, which results partly from what they were born with and partly from what they slowly develop through work.

Charlie Munger

If this is true, then developing one’s circle of competence is one of the most urgent things a person can do. But it does raise the question, how do I know if I’m being ambitious enough?

If you only explore and develop your circle of competence how does one know when they’re hitting their limits?