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The 80 20 Rule Explained (a.k.a. Pareto Principle) | Brian Tracy
“When your goals are clear, you will come up with exactly the right answer at exactly the right time”
Brian Tracy
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Key Ideas
Applying the 80/20 Rule in Goal Setting
- Assess your goals. Work on the most valuable all the time.
- Work on the tasks with the greatest impact.
- Think like a wealthy person. Do what one does.
Brian Tracy
“When your goals are clear, you will come up with exactly the right answer at exactly the right time”
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.
Identifying Productivity Constraints
What restraints you from achieving your goals? Are they learned feelings of helplessness? Or are they just simply excuses? Remember, whatever you have learned, you can unlearn.
If your real goal is to dream big dreams and to live without limits, you can set this as your standard and compare everything that you do against it.
Keys to Living Without Limits
Clarity. Have a clear vision of your desires and future to help you stay focused on your goals.
Competence. Commit yourself to doing something that enables you to become better at doing the most important things in your field.
Concentration. Persevere, without diversion or distraction, in a straight line toward accomplishing your goals.
SIMILAR ARTICLES & IDEAS:
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The Pareto Principle Misapplications
- Putting inputs and outputs on the same level: Inputs and outputs aren’t the same thing and, therefore, can’t be put into the same pie chart.
- Using a litera...
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The Pareto Principle (the 80/20 Rule)
It is an idea discovered by an Italian economist. It says that power and wealth is distributed like a reversed hockey stick where a small percentage of the population (20%) owns majority of...
80/20 Rule All Around
The Pareto Principle could also be observed in almost every industry:
- In software, 80% of the errors and crashes in a system would be eliminated by fixing the top 20% of the most reported bugs.
- In sports, 20% of athletes participate in 80% of the big games
- In business, 20% of the products bring in 80% of the revenue.
80/20 Rule: Threat or an Opportunity?
It is hard to accept the truth that there are inequalities everywhere. But depending on how you see it, the rule could help us filter out unnecessary data, better channel our resources, and make better decision in work and life.
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The 50/15/5 rule for multiple financial goals
- 50% of your income goes toward essential expenses: rent, bills, minimum debt payments.
- 15% percent goes to retirement savings. They also suggest you increase this by ...
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The 50-20-30 rule
It is a budget rule to help people reach their financial goals. It states that:
- You should spend up to 50% of your after-tax income on needs and obligations that you must-have or must-...
Needs, wants and savings
- Needs: these are those bills that you absolutely must pay and are the things necessary for survival (rent or mortgage payments, car payments, groceries, insurance, health care, minimum debt payment, and utilities).
- Wants: these include all the things you spend money on that are not absolutely essential (dinner and movies out, vacations, electronic gadgets, etc.)
- Savings: this includes adding money to an emergency fund in a bank savings account, making IRA contributions to a mutual fund account, and investing in the stock market.
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Setting priorities
Take a long-term view when setting priorities and you’ll have a much greater chance of achieving your objectives....
Identify Your Goals
Start by taking a bird’s eye view of your life and slowly nail down more specific goals.
Identify your big goal. Then get more granular and identify specific goals along the way.
Set S.M.A.R.T. Goals
Each goal you set should be S.M.A.R.T. — Specific, Measurable, Attainable, Relevant, and Timely.
- Specific: The more specific your goals are, the better chance you have of achieving them.
- Measurable: Can you identify milestones to hit along your way to success?
- Attainable: Are you willing and able to make the necessary sacrifices to achieve your goal?
- Relevant: A goal that you care about.
- Timely: Make sure every goal you set is time-bound.
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Identifying What's Truly Important
20% of your activities will account 80% of the results, and vice versa. Start working on the most important tasks, it may be complex or difficult but it holds majority of the outcome.
Neglecting 80/20 = Mental Clutter
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.
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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 th...
Universal Law
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).
Identify Your 80/20
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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The Rush of Motivation
During the first week of the new year, there is a rush of motivated people who want to achieve their respective self-improvement goals. But then all this rush always tapers off, with only about 8 %...
Procrastinating
Procrastination, or the way we let pending tasks linger on, just avoiding them, is one of the main reasons our goals don't materialize.
The longer any work is avoided the harder it becomes to eventually do it.
Like dishes piling up in the kitchen sink, they get harder and harder to do as the load increases.
Fear as the Cause of Inaction
Fear causes us to procrastinate. It can be:
- Fear of change
- Fear of leaving our comfort zone
- Fear of the unknown
- Fear of failure
- Fear of what other people would think of us
We justify these fears by imaginary different reasons, but the root cause is not related to our invented reasons, it is our inherent fear.
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Defer
To defer means saying, "Not right now" rather than, "Not ever." This could be a new project you want to com mence in a week or two or it could be van idea you want to reflect on before takin...
Delegate
You might find it disconcerting when the results are somewhat different than when you complete the work yourself.
To delegate effectively, create a playbook breaking down a project or task step-by-step and detailing what the outcome looks like.
Do
Simply put, act on your tasks. The 2-minute rule can help with that: If you can complete a task in two minutes or less, do it now.
It's amazing what you can accomplish in just 120 seconds: write an email, make a quick phone call, pull a report and so on.
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Becoming Reasonably Good
Deconstruct the Skill
- Break the skill into various small parts, remembering that every big skill is a collection of many sub-skills.
- Identify the essential sub-skills needed to give you the maximum advantage.
- Practice the most important part that you have discovered, using the 80:20 principle in your learning.
80/20: Pareto's principle
The Pareto principle states that 20% of your activities (even lesser) deliver 80% results (even more) in almost every area of your life.
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