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The 80 20 Rule Explained (a.k.a. Pareto Principle) | Brian Tracy

Make Dream a Reality

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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The Top 4 Misapplications of the 80/20 Rule

The Top 4 Misapplications of the 80/20 Rule

https://www.lifehack.org/articles/featured/the-top-4-misapplications-of-the-8020-rule.html

lifehack.org

Eighty percent of the output comes from twenty percent of the input. That is basically a summary of the Pareto Principle, or as it is more commonly known, the 80/20 Rule. The rule comes from Vilfredo Pareto, an Italian economist who noticed that 80% of Italy's wealth was in the hands of 20% of the population.

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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...
The Pareto Principle

The Pareto Principle

https://medium.com/the-blog-of-dean-yeong/the-pareto-principle-a3e25b51f73

medium.com

Note: This story was first published in DeanYeong.com Vilfredo Pareto was an Italian engineer, sociologist, economist, political scientist, and philosopher. He made numerous important contribution to economics. One of the most profound contributions Pareto made is his study of the income distribution.

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Key Ideas

Small Improvement Matters

Don’t be discouraged even you are being left behind, as long as you are making a progress, you are already making a difference.

Why Winners (Almost) Take All

In Pareto Principle, the winner takes almost all. The-Winner-Take-All effect happens isn’t because winners are better, smarter, and stronger than everyone else. In fact, most of us started at about the same place. But that tiny little advantage can take a person a long way by compounding effect over time.

Strategies for Keeps
  • Pick one goal for your business to improve focus and decision-making.
  • Optimise the first item in a funnel that has cascading effect to the entire funnel
  • Work hard to understand the 20% of your customer.
  • Create high margin products that bring 80% of all profits.
  • When assessing risk, recognise not all risks are equal.

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Budget for Multiple Financial Goals With the 50/15/5 Rule

Budget for Multiple Financial Goals With the 50/15/5 Rule

https://twocents.lifehacker.com/budget-for-multiple-financial-goals-with-the-50-15-5-ru-1712442588

twocents.lifehacker.com

When you're trying to get your finances together, there's usually a question of trade-off. Do I pay off debt or save for an emergency? Do I save for retirement or a home down payment? Fidelity's 50/15/5 rule addresses the most important financial goals by allocating your paycheck accordingly.

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The 50/15/5 rule for multiple financial goals
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 ...