Pareto’s Principle – The 80 / 20 Rule

Pareto’s Principle or the 80 / 20 rule is the idea that roughly 80% of the effects come from 20% of the causes. This principle received renewed attention from books like Tim Ferriss’ 4-Hour Work Week.

Pareto uses the example that 80% of the wealth is owned by 20% of the people. Some people feel guilty being in that 20%, like maybe they’re not worth it. My feeling is that its got to be someone and it might as well be me and my wife. I hope it’s you too. If you want it badly enough, you’ll do what it takes.

The advice Tim gives is simple. Focus on the 20% of things that make you money. Let the other 80% take care of itself. Well, hold on, not exactly. He also goes on to say that 20% of the people or responsibilities will give you 80% of your problems, so get rid of them. Ok, here’s the answer: First focus on the 20% of things that make you money, second, ignore and/or get rid of the bottom 20% of things create problems and, third, delegate the rest or the things that do not fall into top or bottom 20%.

The hard part is figuring out where everything goes. What’s the 20% most important stuff? That’s the challenge.

People have a hard time with ignoring tasks that they’ve been doing for years. It’s like their personal standards are getting lowered, but you realize it’s more habit than anything. Just b/c you spend a lot of time on something does not make it important.

As far as the unimportant stuff, people spend way too much time on this. The more time they spend, the more important the task’s becomes regardless of merit. There is even a law about this called the Parkinson’s law: “A task will swell in (perceived) importance and complexity in relation to the time allotted for its completion.”

This concept isn’t new. So how do you ignore the unimportant details. Steven Covey says to “Put first things first” and quotes Goethe, “Things which matter most, must never be at the mercy of things which matter least.”

Try and do everything and you’ll have a lot of nothing.

by admin

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