Back in early 2011 I enthusiastically blogged at great length about the book “The Four Hour Work Week: Escape 9-5, Live Anywhere, and Join the New Rich” by Timothy Ferriss. The heart of the philosophy and method behind this book and actually working only 4 hours per week yet still being massively successful is a little known concept called the 80/20 rule. It’s also been called the Pareto Principle and a few other names. It’s a concept that was originally discovered by an Italian economist in the 1800’s. The 80/20 rule never became well known at that time and was almost forgotten, laying dormant for decades. Today, the business world and general public is gradually re-discovering and waking up to what the 80/20 rule is and how to apply it to any aspect of their lives.
So really learning what this concept is all about and applying it will (sooner or later) put you in the top 1% of income earners. Seriously. In fact, I learned the 80/20 rule is the reason why there are a great many millionaires in the world, yet only a tiny handful of billionaires. Billionaires eat, sleep, live and breathe the 80/20 rule. Millionaires sometimes do. Everyone else doesn’t.
So I decided to explore the 80/20 concept in greater depth by reading book “The 80/20 Principle: The Secret to Achieving More with Less” by Richard Koch. In this blog article series I’ll be reviewing the book and discussing how its insights can be applied specifically in real estate professionals lives for greatly improving both their business and personal lives.
The 80/20 rule basically says all of the following statements most people have come to believe as self evident are actually not true:
- the more you work, the more money you’ll make
- whatever you put into your business you’ll get back in equal measure (input = output)
- business owners should always be involved in and overseeing their business’ operations (always being “hands on”)
- selling to more markets means more money; selling to less markets means less money