80/20 Principle and/or Rule

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The Pareto principle, also known as the 80/20 Principle and… or Rule, is a theory maintaining that 80 percent of the output (achievement/results/wherewithal) from a given situation or system is determined by 20 percent of the input (action/effort/work).

By the numbers it means that 80 percent of your outcomes come from 20 percent of your inputs.

Focus on the 20% that matters for an 80% effect.

Information is Currency

The principle is named for Vilfredo Pareto, an Italian economist. He “stumbled” upon the concept when observing that about 20% of the peapods in his garden contained 80% of the peas. And then he kept observing the same pattern everywhere else. In 1906, Pareto noted that 20 percent of the population in Italy owned 80 percent of the property. He went on to study the land distribution in other countries and found a similar pattern. He proposed that this ratio could be found in many places in the physical world and theorized it might indicate a natural law.

It really doesn’t matter what numbers you apply, the important thing to understand is that in your life there are certain activities you do (your 20 percent) that account for the majority (your 80 percent) of your success and output.

In the 1940s, Pareto’s theory was advanced by Dr. Joseph Juran, an American electrical engineer who is widely credited with being the innovator of quality control. It was Dr. Juran who decided to call the 80/20 ratio the “The Pareto Principle.” Applying the Pareto Principle to business metrics helps to separate the “vital few” (the 20 percent that has the most impact) from the “useful many” (the other 80 percent).

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Vilfredo Pareto came up with the 80/20 principle which later became known as the Pareto Principle

The little things are the ones that account for the majority of the results. The ratio: 80/20… are simply common numbers for simplification purposes. In reality, it can mean 90/10, 95/5, or even 99/1.

What intelligent individuals enjoy about the 80/20 principle is that it actually works and impacts all matter of life. And by putting your focus in the right place, whether it’s money, work, productivity, hobbies, or literally anything else… you start being in charge of your life and achieve what you set out to do.

Very quickly, let’s say you do a lot of marketing on a social network. OK, and you spend five hours this week doing your thing on LinkedIn. Well that’s great OK. Now how many contacts, connections, or leads has that driven you this week? If it drove you one prospect let’s say, then only you can determine if you landed that business if it made sense with your activity on LinkedIn. If it didn’t, then you need to look at that and say OK what did that five hours really cost me? Apply the 80/20 principle. In a nutshell busyness does not equal business… results do.

Truth and Validation

Some things to note:

20% of communications accomplish 80% into your network.
80% of value achieves the first 20% of effort.
20% of emails are 80% of the important conversations.
80% of distractions come from 20% of sources.
20% of food damages 80% of energy.
80% of muscle gains come from 20% of the effort.
20% of investments bring in 80% of revenue.

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Using the 80/20 Principle Wisely

Goals: focus on 20% of the goals that will achieve 80% of the results; compare the resources needed… time, money, energy, etc. to the potential benefits.
Habits & Routines: 20% key power habits create 80% of value in your life; such as meditation, and exercise.
Decluttering: throw away 20% of the things that take 80% of the space.
Daily tasks: if possible, outsource 20% of daily chores that bring you 80% of the stress. Sometimes a machine and/or robot can be a solution.
Digital: 20% of your files use up 80% of the space; you use 20% of applications (in a node) 80% of the time, and you use 20% of the gadgets 80% of the time… simply remove, sell, or give away the rest.

The 80/20 principle is a simple concept to grasp and a hard one to practice.

In business, you can achieve huge financial savings by rationalizing your efforts, services, products, habits, and tasks according to the 80/20 principle.

And in personal life, you can better manage your finances, health, relationships, travel, and space by decluttering your possessions.

Use this mental model to pursue new hobbies or work paths; be more effective/efficient at your business, or find ways to be less stressed.

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Oddly enough, you can even link the 80/20 principle with Parkinson’s Law to reduce the amount of time spent on anything.

By cutting the non-essential and the things that generate little value, you declutter your mind, space, and time.

At its essence, the 80/20 principle is telling us to only work on the important stuff, and not to sweat the small stuff.

The 80/20 principle is not about doing less work. It’s about finding the most valuable areas in your schedule and spending more time doing those things.

There is an unlimited amount of work that needs to be done, and a very limited amount of time available, use the 80/20 rule.

Logistical Accumulation

There is an unlimited amount of work that needs to be done, and a very limited amount of time available. You’ll never finish all the work. If you try to get on top of every single thing, you’ll notice that the work is finishing you off. Instead of wishing for more energy to get more done, why not use your energy to only do the most important things?

When you start to adopt the 80/20 principle, you’ll notice that you have more time left over… the work quality and productivity will be higher. You will be able to prioritize your day like never before, because you’ll know all the essential actions that will help you get the best results. The best part is that this strategy is repeatable and cumulative. The more you repeat it, the more value you’ll get from your 20% of tasks.

That ultimately leads to a successful life.