What Is the Pareto Principle and How It Can Improve Your Life

Paretto Principle 80/20 rule economy

At the beginning of the 20th century, the Italian economist Wilfredo Pareto found out that 80% of his garden peas were produced from only 20% of the peapods he planted.

Applying these economics he also discovered that 80% of Italy’s wealth belonged to 20% of the population.

Later it has been found out that this 80/20 rule occurred in many events.

For example:

  • 20% of the workers create 80% of the result.
  • 20% of bugs cause 80% of the software problems
  • 20% of your products make 80% of the sales.
  • 20% of the exercises in the gym produce 80% of your gains.
  • 20% of the time produces 80% of the results.

So basically it means 20 percent of the inputs or activities are responsible for 80 percent of the outcomes or results.

I am sure that you will find other examples which apply to your life.

It doesn’t mean that it always has to be the numbers 80/20 sometimes it can even be 90/10 or 95/5.

The 80/20 rule is just a rough guide about typical distributions.

According to the Pareto principle, one could say of all the tasks we do throughout the day only 20% matter and that you shouldn’t focus on the other unnecessary things.

How you can apply the 80/20 principle to your life

Now ask yourself which 20% of your life are the results of 80% of your desired outcomes and happiness?

Is it reading? Traveling? Sports? Or spending time with your family?

Write down the answers.

Which 20% are causing you 80% of problems and unhappiness?

Alcohol? Fast food? Tv? Or maybe sitting in traffic every day on your way to work?

When you have written down your 20% by asking yourself those fundamental questions, it’s time to set your priorities accordingly.

If you always feel great after working out then start going to the gym regularly instead of watching games of thrones or whatever it is you do.

If you sometimes feel miserable or get sick easily then get rid of the things causing these problems.

It’s just that easy.

Its only hard at the beginning.

If you have been lazy for the last years it doesn’t mean that you were born this way and that you can’t change yourself.

You won’t wake up one day and be fired up out of nowhere to hit the gym or to eat healthy if you were a couch potato before and your diet consisted mainly out of fast food.

You have to force yourself until this new lifestyle becomes naturally.

It will take about two weeks of discipline to get rid of bad habits and to bring the good ones into your life.

Why not give it a try?

Business

Which 20% of sources produce 80% of the traffic coming to your website?

Take a look at your website’s statistics to understand which sites bring you the most referrals.

Which 20% of your products produce 80% of your online sales?

Your best selling products are so popular because of a reason, so make the best out of them.

Focus more on promoting them instead of wasting time and money for the unsuccessful products.

Which 20% of your customers spend 80% of their money for your service/products?

If you can find out your highest spending customers you can effectively market towards them.

Because some earn you a high amount of money, many make you a little bit of money while others just waste your time and you might lose money when trying to sell them something.

Conclusion

Don’t get in the misconception that the Pareto principle is a law of nature that finds its usefulness in every situation.

It’s a useful tool because you realize that you have the possibility to focus on the important 20% to save money and time.

Of course, for some tasks 80% is not enough, they need 100% of your focus and effort to achieve perfection.

It may be true that an author writes 80% of his draft in the first 20% of the time but it wouldn’t be a masterpiece without all the little details which need 100% of his attention.

Until next time,

Tom

Then subscribe and never miss a Post.


Leave a Reply