The 80/20 Rule: How the Pareto Principle Can Transform Your Life
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Interested in getting maximum results with minimal effort?
Then the best thing you can do is implement the 80/20 rule throughout your life.
While I’ve talked before about my favorite productivity hacks, I felt that the 80/20 strategy (also known as the Pareto Principle) requires its own blog post.
In this post, I will go into great detail on the 80/20 rule, why it’s so effective, and how you can apply it to both your professional and personal lives.
Let’s get to it.
What Is the 80/20 Rule?
The 80/20 rule was originally mentioned by Italian economist Vilfredo Pareto (this is why it is often referred to as the Pareto Principle).
Pareto wrote that in economics, 80% of your results often come from 20% of your efforts.
What’s amazing about this discovery is that it has proven to be true in almost every real-world situation where it has been applied.
It seems that it is a universal truth that only a handful of your tasks will produce any sort of measurable result.
Sidebar: There is a lot of generalization when it comes to applying the 80/20 principle in many aspects of our lives. The math may not always be exact. Often, it will be 78% / 22% or 85% / 15%. But the general rule of thumb is the biggest results in your life are often created by small, important actions.
The 80/20 rule can be applied to any industry or business. For example, in general, 80% of revenue is generated by 20% of the salespeople; 80% of complaints come from only 20% of customers; and 80% of highway traffic is funneled through 20% of the roads.
It can also be applied to all the areas of your life.
Right now, only a handful of the activities you do each day or week have the biggest impact on your life—whether you’re at work, at home, or enjoying a hobby.
The key lesson of the Pareto Principle is to be constantly intentional with how and where you spend your time.
No matter what tasks and obligations you need to do each week, there will always be a handful that produce extraordinary results. A few strategies will work well, while everything else will be a waste of your time.
The trick is to identify these activities and focus on them instead of worrying about time-wasting activities. The great thing about this principle is that, once you’re mindful of it, you learn to focus on the 20% that yields the best results.
The Law of the Vital Few
A management consultant named Joseph M. Juran used Pareto’s observation to create what he called the Pareto Principle, or the 80/20 principle.
Pareto’s Principle was initially used in economics, but nowadays people are able to use it to effectively manage their own actions. In short, 80% of your outcome is based on 20% of your efforts.
Think about it.
When you open your mailbox, 80% of the stuff crammed inside is junk mail that you throw away.
You wind up keeping only 20% of the mail, but 80% of your time involved in dealing with mail is spent reading that 20% that you kept—bills, birthday cards, magazines, etc.
You might go to the office from 9 to 5, which makes you think you spend all day working. In reality, you wind up talking to your coworkers, answering unimportant phone calls, taking coffee breaks, and updating your Facebook status (you know you do it!).
Most likely only 20% of your day is actually spent doing the “important stuff” that matters to your job, and that “stuff” is what should be 80% of your workday’s activities.
To illustrate the power of the Pareto Principle, this graphic shows you can apply this rule throughout a business.
80/20 Rule: The Shortcut to Skill Mastery
The 80/20 rule is important because it provides a “shortcut to mastery” in just about every skill.
This means you don’t have to learn everything about a process—just the information that can help you achieve an important goal.
When researching a new skill to learn, you can identify the most important elements and commit to focusing on them. Do this, and you’ll be ahead of everyone else who spends time majoring in minor details.
By concentrating on the 20% actions that give you 80% of your results, you’ll surpass the folks who agonize over small details that don’t really matter in the grand scheme of things.
This is the entire point of Tim Ferriss’s 2013 TV series The Tim Ferriss Experiment.
In this show, Tim would challenge himself to learn a new skill in one week—and learn it to a level of competency that would take most people a year or more. He learned to play the drums. Parkour. Surf. Jiu Jitsu. A new language. All in a week each, with little prior experience.
He did this by applying the 80/20 rule to each and every skill. By hiring a master to help him discover that vital 20% of knowledge, he studied just the right essentials and was able to pick up skills with amazing speed.
This is also the main idea behind my book Novice to Expert, where I talk about how to use the 80/20 rule and some other principles to master any skill or knowledge far more quickly than most would think possible.
An 80/20 Rule Example: The 2009 NYC Marathon
To further illustrate this point, let me talk about my experience in the New York City Marathon.
This race uses a lottery system to get into, so runners will often spend years applying (and getting rejected) before gaining admittance.
It took me four attempts before getting into this race in 2009.
Unfortunately, due to a number of personal setbacks and sheer laziness on my part, I found myself not in great “running shape” on October 1st, 2009 (one month before the New York marathon).
I remember this date because I was in Costa Rica that day, and tried to do an “easy” five-mile run on the beach that left me exhausted and gasping for air.
This is the point where I realized that I was in real trouble.
I could barely run five miles, let alone the 26.2 miles required for a marathon.
At this point, I had two options:
- Skip the race and hope I’d make it through the lottery the next year.
- Train as best as I could and try to finish the race.
I quickly decided on the second option because I felt like I had already wasted four years trying to get in.
Plus, I already knew about the one key ingredient to completing any marathon—it’s the “total time on feet” during a single training run.
In other words, if I could complete a single run (with a healthy amount of walking) for each of the four weeks leading up to the race, then I would stand a decent chance of completing the marathon.
I’ll admit this idea goes against the conventional wisdom of distance running, where you’re supposed to train for four to six months for the race. During this time, you’re supposed to run a few times a week and slowly build up your bi-weekly run to 20 miles three weeks before the big day.
My idea was different, because I ignored all the “proven” advice and focused on just completing one really long run/walk each week. And to get through each run, I gave myself permission to walk whenever I was tired or felt like taking a break.
One month later, the big day arrived.
And you know what’s funny?
By giving myself permission to walk, I ended up running the entire race, finishing in 3 hours and 4 minutes, in 1,304th place out of 43,250 runners, which was the top 3% of all participants.
Here’s a picture from that race.
NOTE: I do not recommend this as a marathon training plan. Looking back, I’ve come to realize that my success with this race was largely a combination of youth and pure stubbornness. In other words, if you try this yourself, you risk injury, or a very painful shuffle toward the finish line.
How to Apply the 80/20 Rule to Your Life
The 80/20 rule can have an amazing impact on your existence. You only have to use it as a method to frame important questions about different aspects of your life. Simply examine each area of your life by asking 80/20 questions.
You can do this during a weekly review, you can do it when you feel overwhelmed, or you can do it every time you start some new task or skill.
To illustrate the value of the 80/20 rule, let’s take a look at how it can be used in different aspects of your life. For the remainder of this article, I will go over seven areas of your life and how the 80/20 principle can be used in each.
We will cover using 80/20 for:
- Health and fitness
- Relationships and social skills
You’ll find that, with the following framework, you can determine your 80/20 for any aspect of your life.
80/20 Rule for Business: Increase your Productivity and Efficiency
80/20 for business is anything related to your job, business, promotions, increasing salary, or increasing your skill set to make yourself a more effective manager or employee.
Here are some questions you might ask yourself to 80/20 your career.
- What core habits have had the biggest positive impact on my career?
- Are there tasks that my boss feels are most important to the success of my job?
- What customers generate the most revenue for my business?
- How can I hire more people like my star employee?
- What customers cause the biggest problems with my business?
- Can I “fire” problem customers in order to give more focus to most valuable customers?
- What items are causing the most distraction from focusing on my vital few?
In addition to asking these 80/20 questions that help you get to the core of what matters in your career, you could also break down the important aspects of your business into simple statements:
- If 80% of our revenue is generated by 20% of our customers, how can we get more of customers like our top 20%?
- If 80% of our equipment problems come from 20% of our equipment, what can we do to improve maintenance on that critical 20%?
- If 20% of our tasks take 80% of our time, how can we streamline, outsource, or delegate those time-consuming tasks?
- If 80% of our complaints come from 20% of our customers, how can we simply satisfy that 20%? Or, can we even “fire” those customers and spend more time dealing with the remaining 80%?
- If 20% of our sick days come from 80% of our workers, what policies can we implement to make things fair for the bulk of our employees?
Heck, I even use the 80/20 rule for the blog that you’re currently reading. Once a week, I ask myself:
- “If 20% of my blog posts generate 80% of my income, how can I make more posts like those top 20% earners?”
80/20 Rule for Finances: Making the Most of your Hard-Earned Cash
Applying the 80/20 rule to finance allows you to save for retirement, improve your credit score, eliminate your credit card debt, and invest in building long-term wealth.
Questions you might ask to get to the 80/20 of your finances are things like:
- What are the debts with the highest percentage interest?
- How can I eliminate those high-interest debts first?
- What actions on my part will generate the most revenue?
- How can I do more of my high-revenue-generating tasks?
- What are the top “leaks” when it comes to my spending?
- How can I cut my biggest expenses in half (e.g., getting a roommate to offset the cost of your monthly rent/mortgage, carpooling to reduce gas expenditures, etc.)?
- What I can do to daily improve my credit score (since this is the one metric that directly impacts the interest rates that you end up paying)?
- What is the simplest investing strategy that will have the best long-term impact (e.g., investing in low-fee index funds through Vanguard)?
In addition to using the 80/20 rule to find some great debt-reducing and income-generating questions like the ones above, you could also think of many of the personal finance aspects of 80/20 by putting them into simple 80/20 statements like the ones below.
Statements you might make to get to the 80/20 of your finances include things like:
- 80% of the grocery bill comes from 20% of the items purchased.
- 80% of my investment returns come from 20% of the time I spend deciding on all investments.
- 80% of my time in my home is spent in 20% of the space.
- 80% of my clothes-wearing is done with 20% of my clothes.
- 80% of my debt is built on 20% of my purchases.
- 80% of my entertainment comes from 20% of my collection.
The big “aha” moment, when it comes to your finances, is if you can identify just a few small habits and commit to them daily, and by doing so keep a lot more money in your pocket.
80/20 Rule for Health and Fitness: How to Stay Healthy With Minimal Effort
The 80/20 of health is about maintaining a balance of physical fitness and eating the right foods. There are many subcategories that are included here, like losing weight, improving your diet, eating different types of foods, and becoming more physically active.
Questions you might ask to get to the 80/20 of your personal health and fitness include things like:
What are the vital few simple meals that I can master that provide the most nutritional value?
- What good habits can I create that will have a lasting positive impact on my health (like drinking water, tracking my food portion sizes, or getting a good night’s sleep)?
- What distractions, barriers, or habit triggers can I eliminate that prevent me from focusing on the healthy habits that I know I need to do?
- What are my worst bad habits that I can eliminate, which have the biggest negative impact on my life (e.g., smoking, drinking, eating junk food, etc.)?
- What is the simplest exercise program that I know I can stick with at least three to four times per week?
- What are my biggest food weaknesses?
- What can I do to reduce unhealthy food from my life (e.g., creating a barrier to eating it by not keeping it in your home)?
- What events or activities cause my biggest weaknesses when it comes to eating (like holiday gatherings, work parties, or late-night drinking sessions)?
- What I can do to reduce or eliminate my tendencies to break down during these events?
Statements you might make to get to the 80/20 of your health and fitness include things like:
- If you keep 80% of your eating healthy, your can afford a 20% splurge on an indulgence such as ice cream.
- 80% of health care dollars are spent on 20% of the population.
- 80% of your temptations to “cheat” on a diet come from 20% of your day.
- Weight loss is 80% diet and 20% exercise.
- 80% of your training results come from 20% of your current exercise routine.
- If 80% of your caloric intake is carb free, you can afford to eat 20% of your caloric intake from carbs.
Admittedly, it is a little bit harder to use the 80/20 in health and fitness than it is in some of the other categories.
For example, the 20% of your fitness that provides 80% of your results might be a 30-minute session of super high intensity HIIT class. Trying to do more of that may be physically impossible, unless you are already in awesome shape.
On the other hand, you can easily apply the Pareto Principle to your diet—something I call “food 80/20.” If 80% your time is spent adhering to a strict healthy diet, then you can have the occasional 20% splurge (like a scheduled “cheat day” where you eat anything you want).
Think about that.
That means that after three days of nothing but healthy meals, you allow yourself one moderate meal of whatever you desire. Seems pretty reasonable. This type of moderation makes diets easier to follow, and does little to detract from results.
80/20 Rule for Leisure: Make the Most of Your Free Time
Participating in fun activities like planning vacations, spending time with your family, or focusing on a hobby like home brewing, hunting, cooking, or painting is healthy for you.
I will admit that sometimes leisure activities may not be the best thing to track, measure, analyze, poke, and prod. Sometimes leisure is just for…leisure.
But you might want to consider taking a look at your life to make sure you’re spending recreational time on the things that actually matter.
- What activities do I enjoy most in the world?
- How can I get more benefits from these hobbies?
- How can I eliminate the physical possessions that truly don’t have meaning in my life?
- How can I purposefully plan more enjoyable activities into my week.
- How can I get more of fun while on vacation, and less of the vacation “hassle.”
- If 80% of my truly energizing sleep comes from 20% of my time sleeping, how can I get more of that key rest time?
- What television programs (or other forms of media) can I eliminate that I really don’t enjoy? What online and offline subscriptions can I eliminate that I don’t use?
- What are the 20% of my possessions that I use 80% of the time?
As a society, we tend to default to buying the latest, greatest things when it comes to recreation and leisure.
But if you think about it, most of our fondest memories usually involve a special trip or time spent with the important people in our lives. So if you take time to do an 80/20 analysis, you might discover a better way to spend your limited free time.
80/20 Rule in Relationships: How 80/20 Can Improve your Relationships and Social Skills
Yes, 80/20 can even enhance your relationship with your significant other, family members, or friends. You could also set goals to improve your social skills, find a romantic partner, or simply become a better person to everyone you meet.
Your relation to other people may be particularly susceptible to 80/20. If 80% of the things you do get no particular reaction, but 20% of your actions get a positive and happy reaction, simply do more of the 20%.
Conversely, if 20% of the things you do bring out a negative reaction, you have nice list of the things you need to work on to keep your relationship healthy and happy.
Let’s look at some more of the questions you might ask yourself about relationships using an 80/20 model.
- Who are the people that cause 80% of my enjoyment and make me feel truly engaged?
- How can I spend more time with these people?
- Who are the five people I spend the most time with?
- Does the time I spend with these people make me a better person, or worse?
- Who are the people I spend 20% of my time around who cause me 80% of my unhappiness, anger, and anxiety?
- How can I reduce time spent with them, or even completely remove them from my life?
- How can I spend more time with the 20% of people in my life who I get 80% of my enjoyment from being around?
- How can I be more self-aware of my own actions?
- How can I connect with more people who share my interests?
- What are the 20% of things that my significant other truly loves and appreciates from 80% of my actions?
- How can I do more of these things?
- How can I reduce or eliminate the actions that truly anger my significant other?
In one of my favorite quotes of all time, Jim Rohn said, “You’re the average of the five people you spend the most time with.”
So if you take the time to do an 80/20 analysis, you can make sure that you’re building relationships with the right people, while also strengthening relationships with your loved ones.
80/20 Rule on Service: How to Maximize the Time Spent Serving Others
80/20 for service is about having a bit of efficiency when you help others. It includes volunteering, supporting your favorite charity, or donating money to causes you believe in. Here are some questions to consider:
- What are the few causes that I truly support?
- What system can I create to support them (through volunteering or donations) on a monthly basis?
- Identify the 80% of people who don’t volunteer in your church or house of worship, and look for ways to get them involved.
- How can I guide other people in my life to also help out?
- What is the simplest way I can influence others who don’t get involved?
- How can I set up an automated system for donating money to my favorite cause?
As you can see, you only need to ask a few key questions to transform the way you give back to others.
80/20 Rules on Spirituality: How to Better Get in Touch With You and Your God
We all have a variety of goals in life, so what’s important to you may be very different from what’s important to someone else reading this article.
80/20 for spirituality is about having a bit of efficiency when reaching for the truth of your life. Consider these questions:
- What bad habits are causing the me most unhappiness (e.g., scrolling through Facebook and getting worked up by a headline)?
- What tasks are causing 80% of my problems and unhappiness?
- What experiences produce 80% of my fulfillment and happiness?
- What do I do daily that makes me happy? How can I do more of it?
- What causes the most stress in my life? How can I do less of it?
- What small daily habits can I add to increase my level of happiness (e.g., meditation, getting outdoors, calling a friends, etc.)?
You don’t have to ask all these questions every week, but they should always be in the back of your mind.
Keep the 80/20 rule in mind when you want to improve different aspects of your life. What you’ll discover is that it’s not hard to drill down to the essence of an activity to identify a few key habits that can do regularly. And once you focus on these activities, you’ll discover that it’s not hard to make vast improvements in your life.
Final Thoughts on the 80/20 Rule
The reason that we’ve covered the 80/20 rule in such detail is that I feel it’s without question the most effective productivity and time management hack out there.
The Pareto Principle can transform every aspect of your life, and it can help you to accomplish more than you might believe possible.
Right now, I challenge you to take one area of your life and ask the key questions that I listed above. Then, take time to turn these observations into habits that you incorporate into your busy schedule.
Also, I would love to hear your thoughts on the 80/20 rule, and how you apply it to your own life. Please share any thoughts in the comments at the bottom of the page.
Finally, please share this post on your favorite social media platform, like Pinterest, Twitter, and Linkedin. Doing so will help others find out about the power of the 80/20 principle, and how they can use it to make vast improvements in their lives.