Review Yourself

The 80/20 law, like gravity, is everywhere in your life.

Check your money flow, relationships, possessions, and the things you spend your time on, and find if there is any improvement that can be made in your life.

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Problem Solving

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The Pareto Principle

... or the 80/20 principle was coined in the early 1900s by Vilfredo Pareto, an Italian economist. He observed that the pea pods in his garden were producing peas at this rate. 20 percent of the pea pods produced 80 percent of the peas. This output was then observed by him on a larger scale, across industries, societies and companies.

This principle states that 80 percent of the output or results comes from 20 percent of the input or effort.

The Pareto principle has been seen working in various fields, and domains:

  • Sales and Marketing departments recognised that 20 percent of the customers brought 80 percent of the products, and 20 percent of their sales force made 80 per cent of the sales.
  • Businesses realized that 20 percent of the costs led to 80 per cent of the expenses. They saw that only about 20 percent of their effort created 80 percent of productivity.
  • Human Resource departments observed that 20 percent of the employees created most of the value (80 percent).

We have never considered this before but the same principle applies to our lives.

  • The kind of food we eat, only 20 percent of it really matters.
  • The people we meet, 80 per cent of those are not worth meeting.
  • The stuff we buy (like clothes and gadgets), 80 percent of it we hardly use.
  • The things we do 80 percent of the time, are not providing many benefits or fulfilment.
  • The money we spend, most of it is not useful or healthy for us.

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Make Dream a Reality

A dream is the root of all success, for having a dream does not limit you on what you can do. Successful people allow themselves to lean back and imagine the kind of life that is possible for them.

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IDEAS

Not having clear goals makes it hard to focus well on your priorities at hand. Applying the 80/20 rule will lift that mental clutter and enable you to focus better on your priorities. By merely identifying that this task is a priority, you’ll start to approach it with more impact and intensity.

Introduction - What is Possible?
  1. Imagine one thing for a minute: a working week of only four hours. Don’t worry; the idea is that you’d still be making enough money. You’ll be working less, but you’ll be more productive.
  2. What would you do with the time you have left? Movies. A book. Maintaining friendships and family values. Every day would be like a mini vacation if you followed the 4-hour workweek.
  3. Timothy Ferriss, an American author and entrepreneur, says that is possible. His book, The 4-Hour Workweek: Escape 9-5, Live Anywhere, and Join the New Rich, changed many people’s lives.
  4. In its basis, The 4-Hour Workweek is a productivity concept. The author himself tested it. He went from making $40,000 per year on an 80-hour workweek to making $40,000 per month on a 4-hour workweek.
  5. When I read the book, I realized it was more realistic and actionable than I expected.

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