“Why should you care about the 80/20 Principle?  Whether you realize it or not, the principle applies to your life, to your social world, and to the place where you work.  Understanding the 80/20 Principle gives you great insight into what is really happening in the world around you. … Our daily lives can be greatly improved by using the 80/20 Principle.  Each individual can be more effective and happier.  Each profit-seeking corporation can become very much more profitable.” – from The 80/20 Principle

First, let’s focus on applying the 80/20 principle to our professional lives.  Continue reading →

First, let’s understand what the 80/20 rule is.  Vilfredo Pareto was an Italian sociologist, economist and philosopher who lived from 1848-1923.  In 1906, Pareto observed that 80% of the land in Italy was owned by 20% of the population.  An avid gardener, he also noticed that 20% of the pea pods in his garden produced 80% of the peas.

As an economist, Vilfredo studied the patterns of financial wealth and income in nineteenth century England and again found these same 80/20 proportions in how wealth was distributed: 20% of the population had 80% of the country’s wealth.  Through further observation he found that everywhere he looked a similar pattern emerged.  That is, roughly 80% of effects come from roughly 20% of the causes.  What he had found was that nature was predictably unbalanced. Continue reading →

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. Continue reading →