The 80/20 Principle

Do you want to “HACK” your productivity, reduce stress, help you make smarter decisions, and overall change your life?

Read this post, and I’ll tell you exactly how you can do just that!

A lot of people are familiar with the “Pareto Principle”, or the 80/20 rule. If you’re not, basically, it states that in MANY things in life, 80% of the output, is created from 20% of the input. But I’m going to expand more on this in a moment.

First, let’s break down some examples:

20% of the workers in a job often produce 80% of the results
20% of your customers create 80% of your revenue
20% of your life can cause 80% of your happiness or unhappiness
20% of your bills can take up 80% of your cashflow…

And so on…. This applies to so many things in life.

Now, it’s important to note that the ratio won’t always be 80/20, and the numbers won’t always equal 100. That’s okay! And here is why: Because it’s the underlying principles that matter: “A small portion of input, gives a larger portion of output — A small amount of effort, can produce a larger outcome (both negative & positive)”.

So how do we use this principle to change our lives? Well, let’s take 2 examples above and take a look at it from a business perspective:

If 20% of the workers in a job contribute 80% of results: Focus on rewarding these employees to keep them happy, and productive, maintaining 80% of your results.

20% of your customers make up 80% of your revenue: Focus on keeping this customers happy, to maintain 80% of your revenue.

But it doesn’t stop there. We can apply this to more practical areas of our daily lives….

Let’s say we have to write a paper for school. You need to do research and have a whole list of articles but no idea which ones are best to utilize. Maybe, you’re on a time crunch because you procrastinated (plenty of us have been there). Applying the 80/20 principle: Instead of spending 1-2 hours per paper, and only getting through a handful of the list, spend 5-10 minutes skimming through each paper (smaller input), then spend however much time you would like focusing on the ones you liked best (bigger output).

Another one…

Let’s say you’re feeling overwhelmed with life. You have a lot of pressure, and or a lot of things that need to get done. Applying the 80/20 principle: Instead of stressing about everything and scrambling around to do things in likely an inefficient manner, it’s likely that a small subset of things in your life, are causing most of your stress. So, start by taking a few deep breaths. Then, make a list of EVERYTHING. Cross out everything out of your control. Next, prioritize the list from most important, to least important. Finally, pick out the things that are most important on the list, that will have the BIGGEST impact. This shouldn’t take you very long, and now you’ll focus your efforts only the the things that will produce the biggest positive impact.

Another one…

 You’re trying to learn a bunch of things. Could be trading, marketing, CPA, eCommerce, money management, mindset, flying an airplane… you get the point. Applying the 80/20 principle, we can evaluate which things can have the biggest impact on our life (maybe even with the least amount of effort), so we can narrow it down to the most important things. This allows us to apply less of our efforts, but get a maximum output on our efforts. Now, instead of trying to spend hours inefficiently learning 12 different things, we can quickly knock out things that impact our life the most, causing minimized effort to produce larger outcomes in our life. We rinse and repeat this process as long as we wish until we decide we want to stop!

Another one…

Are you a distributor in MLM, or involved in any sales? You can use the 80/20 principle for multiple things. Don’t spend all your time chasing. Spend a small effort prospecting, small effort conversing with the lead — and if they say NO, either follow up later, or move on! Don’t spend all your time convincing people who aren’t ready or have already made up their mind. Spend more little efforts prospecting, and conversing with those who seem more promising! What does this do? Instead of having a 80% negative impact on all your time, and your income, you’ll experience a more positive because your focused efforts will produce better results. Aka, you’ll likely close more people than you were closing! This is just ONE application. Another application can be for your downline. Focus your time on building relationships, and keeping the 20% of the guys who are producing 80% of your income (usually “builders”). You’ll likely have a much better experience.

Now, these are just some of many examples in life. Like I said above, this principle applies to so many things in life. There is virtually limitless applications!

All you have to do is TAKE ACTION!