80/20 Rule & Life Mastery
How the Pareto Principle, also known as the 80/20 Rule can help you with financial and life mastery.
How to live by the highest priority across all seven areas of your life by utilizing the Paredo Principles, the 80/20 Rule.
Financial • Family • Vocation • Health • Social • Knowledge • Spiritual
When I started my first business at 15 I used to ask myself why are certain people, groups and countries more successful than others. This article gives some great insights into this decades-long quest, along with some quality questions to expand your mind.
What is the Pareto Principle?
First of all let me tell you what the Pareto Principle is, it's the 80/20 rule which states that approximately 80% of the effects come from 20% of the causes.
- 20% of high-priority actions give you 80% of your desired results;
- 80% of low-priority actions give you 20% of your results.
"80% of the effects come from 20% of the causes."
- Vilfredo Pareto (Economist who first identified the 80:20 Rule, now known as The Pareto Principle)
I hope you see how this one exercise can change the trajectory of your life. The key takeaway will be how to use your time most effectively to maximize your resources and potential. This principle is commonly applied in business and economics to suggest that a small minority of inputs are responsible for the majority of outputs. I'll show you how this applies to all 7 areas of life for your own mastery.
Origins of the 80/20 Rule formally the "Law of the vital few."
First identified by Italian economist Vilfredo Pareto in the late 19th century. Pareto observed that 80% of the land in Italy was owned by 20% of the population. He found that this pattern held true for other economic data as well. He called it the "law of the vital few." The American engineer and management consultant Joseph Juran utilized these principles to help put Japanese quality control on the map, more often referred to as Kaizen 改善 (Continuous improvement). To pay homage to the man who first discovered it, Joseph Juran called it the Pareto Principle.
The Pareto Principles Across 7 Areas of Life
Financial • Family • Vocation • Health • Social • Knowledge • Spiritual
I've spent decades focused on refining the top 20% of questions that yield the greatest results let me share a glimpse into one dimension of the framework that has allowed me to develop a practice where I serve people globally on 6 contents.
Disclaimer: What's required to utilize this approach
- Know that the rule works the opposite way, waste 80% of your time and you'll only get 20% of the results you want out of life.
- Have an understanding of your actual intrinsic values. Not the injected values of teachers, preachers, society, bosses, friends or parents. This is what you set your priorities from (I go over it in almost all my workshops).
- Know what your end in mind is, so we can work backwards from there. If you don't know where you're going, any path will get you there. (The true journey of doing is the journey of becoming, it has little to do with the actual destination aside from acting as a north star to guide your direction but it's essential in knowing)
How To Utilize The Pareto Principles For Finance Mastery
What Are The Highest Priority Actions You Can Take To Master Your Mental Faculties To Achieve The Wisdom Of The Ages Without The Ageing?
This holds true in personal finance where 20% of our financial decisions generate 80% of our financial results."
- Robert Kiyosaki, "Rich Dad, Poor Dad"
This is one of my favourite topics and I love doing our annual wealth workshop on this. You'll be surprised how quickly you can turn your financial life around by focusing on the 20% of brain noise holding you back along with the top 20% of actions you can take.
- In a company, 20% of the employees may generate 80% of the revenue.
- Economics: 20% of a country's population may control 80% of its wealth.
- In the United States, the top 20% of households by income earn about 80% of the country's income.
"The Pareto principle holds true in investing - 20% of our investments generate 80% of our returns." - Warren Buffett
What are the books and courses of the top finance you would want to read over your life to achieve your financial vision? What would happen if you extracted that knowledge and made a month-end check-in? My wife and I check in at the end of each month just on family vision and finances to make sure the ship is being steered in the direction because it's inevitable you'll face some storms. So what are the highest priority questions to ask?
What would happen if you actually had a value of wealth creation and preservation in the top 20% of your hierarchy of values? What would that do for the rest of the areas of your life?
How To Utilize The Pareto Principles To Understand Family Dynamics & Relationships
What Are The Highest Priority Actions You Can Take To Master Your Family Life To Achieve Your Familial & Relationships Objective?
"The Pareto principle applies to family dynamics - 20% of the issues in a family generate 80% of the stress."
- Dr. Phil McGraw
We all see how relationship challenges can ruin finances, families and health. What if you studied the families and the relationships that made the greatest impact on the planet? We all have different definitions of normal and don't know what we don't know until we experience something new. So why not identify the dynamics, culture and mindset of the families that achieve this? People are often envious or trying to imitate others than asking questions to awaken a genius within themselves.
The quality of your life is based on the quality of questions you ask. Time to read, research and engage with the people who can give them to you.
How To Utilize The Pareto Principles For Vocational & Entrepreneurial Execution
What Are The Highest Priority Actions You Can Take To Master Business To Achieve Career Fulfillment And Have Clarity of Purpose So You're On A Mission?
"The Pareto principle tells us that 80% of the results come from 20% of the effort. It's a powerful reminder to focus on the things that truly matter."
- Seth Godin
The biggest benefit is business is that you'll identify a pattern of what inspires you, and it will lead you on a mission with meaning rather than just money to survive. Utilize these as principles, not a checklist but something you'll continually refine 改善
Here are some examples of the 80/20 rule at work in business:
- In manufacturing, 20% of product defects may come from 80% of the production problems.
- In retail, 20% of the products may generate 80% of the sales.
- In business, 80% of a company's revenue may come from 20% of its customers.
- Sales: 20% of a company's products may generate 80% of its revenue.
- Workplace: 20% of the employees may do 80% of the work.
- Time management: 80% of the effects come from 20% of the time spent on a task.
- Software development: 20% of the code may contain 80% of the bugs.
- Marketing: 20% of the advertising budget may generate 80% of the results.
As you hear me say often, knowing how to delegate is key. Creating a system and giving it to people whose values align with the task at hand is critical. Once you know this it makes it more streamlined to find qualified and component people to do the work required to achieve your desired impact.
If you're still running the story that delegation costs you, you'll face:
- It's faster to do it yourself
- Don't have time or resources to train
- The cost-benefit ratio doesn't balance out
If you continue to do low-priority tasks will erode your earning power and wealth potential. Delegating will get you unstuck by helping you focus on the talents you have to serve others. If you're trying to do $ 10-an-hour jobs for 5 hours in a day, vs doing your $ 100-an-hour job you're eroding your self-worth and taking away an opportunity to create a job and a livelihood for someone else.
"The Pareto principle states that 80% of effects come from 20% of causes. In other words, 80% of the results come from 20% of the effort."
- Keith Cunningham
I'm spending more time writing, teaching, consulting and working on businesses (mine & others) with people who love learning and want to master all areas of their life. These are things I naturally love doing, and there provide me with the greatest results. I even met my wife doing these things.
My certainty far exceeds your doubt when it comes to you taking action on doing these things. You will be far more inspired each day by taking action aligned to what gives you meaning than just working for money.
How To Utilize The Pareto Principles To Master Your Health & Wellbeing
What Are The Highest Priority Actions You Can Take To Master Your Health To Achieve The Vitality For Optimal Wellness Throughout Life?
"Pareto's principle is a reminder that a small number of causes lead to the majority of effects." - Tony Robbins
I utilized the 80/20 principle to do my first Ironman in 90 days of training. Not owning a road bike, not knowing how to swim and never having run a marathon. I'm confident it works because you get to the basics and what really works.
- 20% of what you eat, gives you 80% of your energy.
- 20% of our daily activities may contribute to 80% of our overall well-being.
The biggest question I have is are you eating to live, or living to eat? I'm still surprised at what people consume and put in their bodies.
- What are the priority supplements you can take?
- What are the foods you can eat to fuel your longevity and maintain optimal energy?
- What exercise can you do to maintain high levels of strength, flexibility and balance?
Take time to find out what works and what doesn't work. What foods and additives give you the most results?
Prioritize what you eat. Prioritize how you exercise. Prioritize what items would keep you fit
What would happen if you identified each of these things decade by decade well in advance?
"The Pareto principle is a powerful tool for achieving more with less effort. It reminds us that we can achieve more by focusing on the most important things." - Brian Tracy
How To Utilize The Pareto Principles For Social Influence & Mastery
What Are The Highest Priority Actions You Can Take To Master Your Social Influence To Achieve The Reach & Impact You Would Love to Have?
"The Pareto principle applies to social media too - 20% of your followers will generate 80% of your engagement."
- Gary Vaynerchuk
My friend and social circles have drastically changed over the decades. As a kid it was other kids from the neighbourhood, as a young adult it was the people from my city. Today as my consciousness and my sphere of influence have grown, it's people all over the world.
If you identified 20% of social connections that gives you 80% of the results, your life and social interactions serve each other.
If the world is your home who do you want to associate with? Identifying the individuals you spend time with now and who you desire to spend it with. Set an intention by identifying the top peers in your own niche you'd love to be acquiesence with.
How the 80/20 Rule applies to Social Influence:
- Social Media: 20% of the content creators may produce 80% of the views.
- In the field of criminology, 80% of crimes may be committed by 20% of criminals.
- Personal development: 20% of our habits may be responsible for 80% of our success.
How To Utilize The Pareto Principles To Grow Your Knowledge & Wisdom To The Level of Mastery
What Are The Highest Priority Actions You Can Take To Master Your Mental Faculties To Achieve The Wisdom Of The Ages Without The Ageing?
"The Pareto principle is a reminder that we can achieve more by focusing on the things that truly matter." - Stephen Covey
Fill your mind with the greatest ideas from the greatest teachers and principle throughout human history. Feed yourself the most universal principles of the top 20% ideas to create a foundation and model for a remarkable life.
What is the highest priority information you want to feed your mind?
Who are the people that make the most impact in the world?
Who are the individuals that are authorities in your niche?
What if you prioritized the books you want to read in your life?
Whats the highest priority knowledge
If you study the top 20% of most influential thinkers, philosophers, innovators, and people with the greatest impact. Your mind and your life would change if you fed yourself these concepts.
How To Utilize The Pareto Principles To Mastery Your Spirituality
What Are The Highest Priority Actions You Can Take To Master Your Spirituality To Achieve The Understanding of Life, Death, And Immortality?
"The Pareto principle holds true in spirituality as well - 20% of our practices generate 80% of our spiritual growth."
- Deepak Chopra
What would happen if you read the seminal works of the people who founded religions? I've found that most people haven't even read their own religious scripture let alone the scripters of the people who founded religions. More often than not individuals read translations of the translation without getting an understanding of the rhyme and rhythm that is universal.
I stopped buying New York Times bestsellers as most of them have been repeats of the last couple of years. I wanted to read the people who were often quoted but rarely read. It opens up a door to think about your life and legacy so you leave an immortal legacy. Each one of us wants to leave an impact beyond our life, the problem is people start thinking about it when they get old and not when they have the greatest ability to get started.
Identify the top 20% of identifying great spiritual teachers an read their bios and concepts.
Exercise: A gratitude journal is one of the greatest ways to see the universe at play on a day-in-and-out basis.
Summary
Keep it simple and focus on the handful of things that can give you the vast majority of results. This isn't just an analytics game, this is about doing what's meaningful to you, as this is where you'll be the most authentic and yield the greatest results. When you are congruent with your own true objectives you'll go through pleasure and pain to achieve them.
Creating clarity of purpose comes with designing a life around what's inspiring. Clearing out the injected value of others and the brain noise holding you back. You can do that at one of the Treats of the Great Workshops.
Get low-priority tasks off your plate. When I say delegate, I mean find someone who has a high value on this and set the parameters to define the scope of what really needs to be done and a system to manage the deliverables so they meet your quality control standards. People fail at delegation and then get bogged down because they can't find anyone to delegate to. Don't make these mistakes, so you can get to do more of what you enjoy. Work doesn't have to be work.
It's worth noting that the 80/20 rule is just a principle, which means that it's not always going to be exactly 80/20, it can be 70/30, 75/25 or some other ratio.
"What are the highest priorities you can action today to get greatest results you desire for tomorrow? " Amar
- Focus on What Matters (Highest priority actions)
- Don't Waste Your Life Away (Seeking a pleasure without pain)
I have a mastermind group focused on this principle, learn more if you are interested in applying.
Amar Virk