Understanding The 80/20 Rule – Why It Will Change Your Life

 In Lifestyle

What is the 80/20 Rule? Why will understanding the 80/20 Rule change your life forever? Are you familiar with the fact that life is unfair? If you are, you are on your way to understanding The 80/20 Rule and using it to your advantage.  If this is the first time you are hearing of The 80/20 Rule, brace yourself.  This is a game changer.

The truth is that you live the 80/20 rule every single day of your life.  Yet, you fail to recognize its forces or how you can use it to your advantage.  In this post today, I will not only explain the 80/20 rule – but also demonstrate how understanding the 80/20 Rule can improve your life in the most positive of ways.

Understanding The Understanding The 80/20 Rule80/20 Rule – What Is the Pareto Principle

You may have heard of the 80/20 rule, but probably never heard of Vilfredo Federico Pareto. Pareto was a philosopher and economist who brought to light the 80/20 rule.

As the story goes, Pareto discovered that only 20% of his pea plants produced 80% of his full and juicy pea pods. This was a thought trigger.  The more he observed his pea pods, the more he saw it applied to many aspects of his life.  Notably, at the time, he also discovered that 80% of all the land in Italy was owned by only 20% of the population.  Understanding the 80/20 rule for Pareto became a lifetime study.  Hence, today the 80/20 rule is also known as the Pareto Principle.  It is a principle that applies to many aspects of our life.

How Does Understanding The 80/20 Rule Affect our Daily Life?

Earlier I stated that the 80/20 rule amplifies that life is not always fair. In truth, the Pareto Principle is about uneven distribution, not just of wealth, but also of time and effort.

The Pareto Principle explains how in industries, it is quite typical that 80% of production comes from just 20% of top laborers.

80% of output (results) will come from only 20% of input (the action)

The aim of this post today is to understand the 80/20 rule and how we can apply it to our daily life for dramatic improvement and results.

How Does The 80/20 Rule Feature in Our Everyday Life?

Understanding the 80/20 Rule





The Pareto Principle – which I have just renamed as the principle of unfair distribution shows us a harsh universal truth.  It may not be an exact fractal of 80/20 but it is more or less there.

This ratio can be seen as a “universal truth” in many instances.

Here are a few examples that will help you understand the 80/20 rule:

  • It is only 20% of the sales reps of estate agents, hyper-market, malls, drug companies, insurance companies (I could roll off a list that does not end) that generate 80% of the total sales.
  • It is only 20% of products in a supermarket that account for 80% of total turnover.
  • Just 20% of patients account for the huge chunk health care spend totaling 80%.

These are documented facts.  However now, we can move on to our life and see how this percentage unintentionally applies also to our day-to-day programmed habits.

Understanding The 80/20 Rule in Our Everyday Life

  • Have a good look at your wardrobe.  If you have time pull out the clothes that you have worn this past year. Shockingly you will find that it will not be more than 20% of your entire wardrobe. And girls, same goes for shoes by the way! 

Understanding the 80/20 rule

  • What is the size of the apartment/house/villa that you live in?  Go on, count the square meters.  You will find that on average you occupy 80% of your time in the same 20% of space.
  • Next, I am going to ask you to have a look at your phone.  Can you count how many Apps you have downloaded?  Now count how many of them you actually use on a day to day basis.  You will find that it is probably not more than an average of 20%. 

Understanding the 80/20 rule

  • How often do you shop at the supermarket? Once a week? Where do you usually head?  Probably down the same aisles as you do every routine week. You probably go to the meat section, bread section, cereals and laundry and fly past the rest.  Your lifestyle and your habits will easily dictate where you stop for the longest time.  If you are a wine lover, the cellar will take up a lot of your time.  Whilst if you are a health-food guru, you will probably stop at the “Mother Earth” section for longer.  To sum this up, you will spend 80% of your time on the same aisles every week and only dedicate 20% to everything else.

How Can Understanding The 80/20 Rule Apply to Improve Our Life?

The Pareto Principle or the “Law of the Vital Few” has been successfully applied efficiently to all aspects of life.  It has been used for running countries efficiently, to economics, to software systems, to entrepreneurs, freelancers, basically everything!

But in truth, we need to break it down in a simpler form in order to see how understanding the 80/20 rule can improve our lives.

Focus on activities that produce the best outcomes for you!

This is not my quote.  It is the quote of Yaro Starak from Entrepreneurs-Journey.com. Yaro has been a mentor in my journey for financial freedom for years now, and his simple and direct way of equating life balance has been life changing for me.

Understanding the 80/20 Rule

Let us get down to a practical level and ask ourselves a few valid questions.

  1. What are the things you enjoy doing best?
  2. What are the things you hate doing most?

Answer these questions honestly, and as I always encourage you, you jot them down in a list. I love lists.  Lists help me get my thoughts organized. Now have a hard look at the list and see what you have written.

On the Enjoyment Level – you probably wrote that you enjoy music, watching a great tv series, reading an awesome book, gardening, running, painting – whatever it takes that gives you the vibe.





On the Detest Level – you probably listed housework, driving to work, going to work, budgeting for family finance etc.

Of course, the list will vary from one person to another.  However, in most cases, the list is going to amplify the Pareto Principle in our lives.

We spend 20% our of time doing the things we like and 80% doing the things we have to do but do not like. 

Understanding The 80/20 Rule

Moreover, the list will also show us, that 80% of our “Enjoyment Level List” is the result of someone else’s output and only 20% of this same list is a result of our personal output.

If we start to understand how this works, then we can also start to fix it!

Only 20% of those who Aspire to Achieve – Make it to Success

This is a hard truth that is also relevant to understanding the unfair distribution of the 80/20 rule.  However, it does not mean that if we focus on our passions, that we cannot have a better success rate.

If you are an aspiring guitarist, you may not make it to Carlos Santana’s dizzying heights of success, but focussing on your passions will give you heightened satisfaction.  Moreover, your satisfaction will stem from your output and not someone else’s!

Not everyone has the drive, the brains, or the opportunity to make it to the top.  Not everyone can be a star.  And not everyone can turn his day to day business into a million dollar business poised for an IPO.

BUT, and it is a big BUT IF you start focusing on WORKING SMARTER you will find that you will have plenty more satisfaction all round.  In a recent article that I wrote “Are You Book Smart of Are You Street Smart” – it is clear that in terms of financial success, there is a bigger likelihood that street smarts will have better results than book smarts. On the other hand, the satisfaction levels of academics are still at a higher percentage.

If living the 80/20 lifestyle is about spending 80% of your time doing the things that you do not like, simply because they pay your way, and only enjoying 20% of your time doing the things you love, then it is high time to address the imbalance.

Now when you found out about 80/20 Rule, prioritizing is crucial. You may need our to-do list template – free to download for SMFF Family! Feel free to download clicking in the picture. Then pin it to your calendar or hang on the wall – start working on your success!

Understanding the 80/20 rule

How Understanding the 80/20 Rule will help us Address the Imbalance

Making the first decision on how to address the imbalance in your life is probably the hardest step. First of all, you need to go back to your list and refine it.  Make a new list and this time the list should include:

  • What you really like to do and what you could potentially be very good at
  • What you really hate to do and could live without.

For many, the latter will come easier than the former.  But don’t fret because understanding what you absolutely hate to do will keep stimulating you into searching what it is that you like to do.

Now you will need to address the imbalance of the 80/20 Rule

If you have identified that what you absolutely hate to do is related to your 80% time allocation, ie., your job, you will need to address this issue. If you are staying in a dreaded job is only for the money, you are wasting precious time.

You can address it in two ways.

a) You must either look at improving your skills so that you can leave your job to a job that you will enjoy doing that will pay you the same or better.

or

b) You lower your financial expectations, and less time at the job you hate, and more time on the things you love.

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Money can be gained in 1000 different manners.  And money does matter because it oils the wheels to our lives.  But we can make Extra Money Online or Offline doing stuff we like. In my article How to Make an Extra $1000 a month, you will find plenty of solutions which could well fit into the 20% of the fun equation.

Turn your passions into a sustainable income.  I always recommend blogging.  Blogging has not just given me the financial liberation because I earn well from it.  Blogging has also given me the freedom to work from anywhere in the world and pursue my passion for travel!  This could be yet another way of finding that you can understand the 80/20 rule and swing it in your favor!

Are you also interested in making money blogging? Check out how much you already know about blogging filling our blogging quiz!

 

Let Not Fear Of Failure Make the Imbalance of 80/20 Rule Swing Against You!

If you are unhappy doing what you are doing, do not let fear of stop you from chasing your dreams.  Dreams are fine for a while.  We need our dreams in order to push us to our goals.  But dreams will stay dreams unless we take action.  In most cases, it is fear that stops us from proceeding and prospering. It is fear that keeps us chained to our routine.

If you are prepared to lower your expectations and your standards of living in order to achieve a more equitable balance between the things you love and the things you hate, you will come out a winner.

What will ensue, is the inevitable. Your quality of life will improve.  Your health will improve and your happiness and energy will grow exponentially.  Most likely, your financial results will come in at higher levels.  When you stop chasing money and do the things you really like, the money will roll in as a result of your focus.

 

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