As I’ve been doing a lot of reading lately, I came across a principle that can have a profound impact on productivity if applied properly. The principle is called the 80/20 rule (Pareto Principle). There is a pattern in the world that occurs over and over again where 80% (the majority) of the results come from 20% (or less) of the causes.
Here are some examples from the book Living the 80/20 Way:
- 80% of your enjoyment in life is from 20% of the time
- 80% of your relationship fulfillment is from 20% of your friends.
- Far less than 20% of the Earth’s surface produces 80% of its mineral wealth.
- More than 80% of the food comes from less than 20% of the land.
- More than 80% of the worlds wealth is held by less than 20% of the population.
This can apply to personal finance and investing in many ways:
- If this principle holds true, it means that 80% of your investment returns come from about 20% (or less) of your portfolio.
- 80% of your business income, comes from approximately 20% of the revenue sources.
- 80% of your productivity at work comes from about 20% of your time (so true).
- 80% of the company productivity comes from 20% of the employees.
- 80% of your savings come from 20% of your frugal strategies.
- 80% of your family income is derived from 20% of the income sources.
Or even how it applies to this blog:
- 80% of the traffic is generated from 20% of the articles
- 80% of the comments are from 20% of the readers
If you apply this to your own life, you’ll realize that a relatively small amount of effort brings the majority of the results. If you focus on the tasks (20%) that bring the most success (80%), then you’ll increase your overall productivity and reduce time wasted.
In other words: Less is More
The focus now is to exploit this rule and work on the 20% that brings the most results. With that said, I’m off to write more articles.
Do you use the 80/20 productivity rule?If you would like to read more articles like this, you can sign up for my free weekly money tips newsletter below (we will never spam you).