The 80/20 Rule

One of the mental models I keep referring to almost daily is the Pareto Principle or the 80/20 rule. I was introduced to the 80/20 rule back in university and it changed my viewpoints. Today I use it for my work, health, finances, buying clothes and groceries, learning skills, and allocating my free time.

Brief History

Pareto principle got its name from Italian economist Vilfredo Pareto, who stumbled upon the concept when observing that 20% of the peapods in his garden generated 80% of healthy peas. This observation caused him to think about uneven distribution.

He thought about wealth and discovered that 80% of the land in Italy was owned by just 20% of the population. Later he investigated different industries and found the same – 80% of production came from just 20% of the companies. 

 

The 80/20 rule is one of the best concepts for life and time management.

It suggests that 80% of outcomes (outputs) will come from 20% of causes (inputs).

Life Isn’t Fair

When I say uneven distribution, I want to say that each unit of time/work/etc. doesn’t contribute the same amount

In a perfect world, every unit of X would contribute the same amount – every employee would contribute the same amount, every product would be equally loved by customers… 

But life isn’t fair, so the uneven distribution and 80/20 rule exist. The common misconception is that the numbers 80 and 20 must add to 100, but this is not the case here. 

For example, 20% of employees could generate 15% of the result. Or 25, or 50, 80, 99, even 100%. 

The Rule 80/20 is only a rough guide about uneven distributions, but the numbers don’t have to be exactly 80 and 20 (it can be 70/30, 90/10, 99/1, and everything in between). As all things in life (effort, output, reward) are not distributed evenly – some contribute more than others.

80/20 Rule in My Life

I bet you can relate to some of the examples I’m going to provide from my personal life. 

  • I own 5 pair of shoes, but 80% of the time I wear my favorite pair
  • I have 10 rooms in my house, but spend 80% of my time in the bedroom, living room, and kitchen
  • I don’t socialize too much, but when I do, 80% of my time is spent with the same 20% of friends and family
  • I read 20% of the blogs I’m subscribed to
  • 20% of my key habits bring me 80% of the results 
  • I use the same 20% of clothes over and over again

How to Apply 80/20 Rule to Your Life?

80/20 Rule in Work and Business

  • 20% of your time will result in 80% of the work done
  • 20% of customers will drive 80% of profits
  • 80% of promotions come from 20% of bosses
  • 80% of customers buy 20% of products

80/20 Rule in Health

  • 20% of your workouts lead to 80% of muscle gains
  • 20% of the food you eat damages 80% of your energy
  • 80% of your strength comes from 20% of the effort
  • 80% of health care costs come from 20% of diseases

80/20 Rule in Finances

  • 20% of your investments will yield 80% of returns
  • 20% of expenses account for 80% of consumption
  • 80% of your grocery bill comes from 20% of items
  • 80% of your income goes to 20% of things in your budget

80/20 Rule in Productivity

  • 20% of tasks bring you 80% of results
  • 20% of emails are 80% of important conversations
  • 80% of distractions come from 20% of sources 
  • 80% of the value is achieved with the first 20% of the effort

80/20 Rule in Hobbies and Free Time

  • 20% of activities deliver 80% of the fun
  • 20% of friends provide 80% of support and enjoyment
  • 80% of skills come from 20% of the hobbies 
  • 80% of the most beautiful memories come from 20% of the trips you have taken

80/20 Rule in Life

  • 20% of the focus on important goals will achieve 80% of the dreams
  • 20% of key habits will create 80% of value in your life
  • 80% of what you own is excess, 20% is essential
  • 80% of stress stems from 20% of daily chores

 

 

Use 80/20 Rule Wisely

The 80/20 rule is a simple concept that can help you in everyday decisions. In business, you can achieve huge success by implementing it. In personal life, you can better manage your health, wealth, and life in general. 

Use this mental model to be more effective and efficient at your job, to pursue new hobbies and ideas in your spare time, to be happier and less stressed in general. You can even connect the 80/20 rule and Parkinson’s Law to reduce the amount of time spent on trivialities.

 

In the next post, we’ll check out how to use the 80/20 rule to supercharge our productivity.

 

P.S.: This post is a part of a bigger one called The Best Productivity Systems in The World.

 

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