The Pareto Principle – Make the 80/20 Rule Work for You

The Pareto Principle, named after Italian economist Vilfredo Pareto observed that 80% of income in Italy was received by 20% of the Italian population.

The Pareto Principle (80/20 Rule)  means spending more time with things that matter and caring less about what doesn’t matter.  What Exactly Is The 80/20 Rule?  Simply put, it means that 80 percent of your best results come from 20 percent of your most focused activity. As Pareto demonstrated with his research this “rule” holds true to an approximate 80/20 ratio, however, in many cases, the ratio can be a lot higher, like 90/10 or even 99/1.  So what are we doing up to 99% of the time    So 80 to 99% of what we do does not produce the results we desire?  Wow!

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 happiness and measurable results.

Where can we see 80/20 examples? The distribution of wealth is a great example, where a small percentage of the population earns the biggest chunk of change.  Although not hard rules, generally, in business in the workplace, 20 percent of the sales team is responsible for 80 percent of a company’s sales.

How can you begin to live a 20 percenter Lifestyle?

When you start to analyze and break down your life into elements it’s very easy to see 80/20 ratios all over the place. The trick, once your key happiness determinants have been identified, is to avoid wasting time on those 80 percent of activities that don’t contribute to the growth and development of your business. In business, find a product or service you really enjoy. Some of you work a day job but you work even harder after-hours to get your dream business up and running.  Jim Rohn said something like this: “I am working full time in my job and part-time building my fortune.”  What do you love to do?   I am not saying do a crappy job at your work.  Give your work a 100% effort, but when the clock strikes 5 PM, it’s not Miller Time (which is part of the 80%), it is YOUR 1% to 20% Time!

In truth, and this is a sad fact, most people commute to jobs they don’t like out of necessity and then when they get there they don’t produce a whole lot.  Most people just blow off steam during the weekends in the form of entertainment and hobbies.  But what if you really loved what you do at work?  You wouldn’t be watching the clock all day, would you?  Discover what kind of career or business you absolutely love should be your first priority.  Success is not a destination or measured by what you get, it’s about what you are becoming each hour of every day.

Become a producer, not just a consumer.  Most people are great at consuming and wasting a lot of time and hoping for FRIDAY (The TGIF syndrome) All of these are great activities and a lot of fun, but eating out at nice restaurants, consuming junk food, reading fiction books, and magazines, going to parties and dance clubs, watching movies and DVDs, listening to music, meeting new people, surfing the net, playing sports and shopping, won’t produce the results of a 20% person. Most people live for these 80% activities.

Here’s the bottom line:  Maximize what you are good at with the Pareto Principle. Find the activities that produce the most results for you and your business and put your energy where the big rewards are.