The Pareto principle

Also known as the 80/20 rule, the law of the vital few, or the principle of factor sparsity.

This rule states that, for many events, roughly 80% of the effects come from 20% of the causes.

The principle was suggested by management thinker Joseph M. Juran. It was named after the Italian
economist Vilfredo Pareto, who observed that 80% of income in Italy was received by 20% of the
Italian population. The assumption is that, most of the results in any situation are determined by a small
number of causes.

How To Apply The 80 20 Rule

80/20 Lifestyle:

It really doesn’t matter what numbers you apply, the important thing to understand is that in your life
there are certain activities you do (your 20 percent) that account for the majority (your 80 percent) of
your happiness and outputs.

Professional life:
 20 percent of your activities will account for 80 percent of your results

Eat The Biggest Frog First: You often see people who appear to be busy all day long but seem to
accomplish very little. This is almost always because they are busy working on tasks that are of low value
while they are procrastinating on the one or two activities that could make a real difference to their
companies and to their careers.

The most valuable tasks you can do each day are often the hardest and most complex, but the payoff
and rewards for completing them can be tremendous.

Before you begin work, always ask yourself, “Is this task in the top 20 percent of my activities or in the
bottom 80 percent?”

The rule for this is to resist the temptation to clear up small things first.

If you choose to start your day working on low-value tasks, you will soon develop the habit of always
starting and working on low-value tasks.

Always Work Towards Your Main Goal: A study that has just been done about the attitudes of rich
people versus poor people in regard to goal setting says that 85% of rich people have one big goal that
they work on all the time. So, if you want to be wealthy, pick one big goal and work on it all the time,
and if you do, it will change your life.

In Business:

It is an axiom of business management that "80% of sales come from 20% of clients".

In a business sense, finding the 80/20 ratios is crucial for maximizing performance. Find the products or
services that generate the most income (the 20 percent) and drop the rest (the 80 percent) that only
provide marginal benefits.
Blueprint: To start living 80/20 today you have only to do one thing – focus your energies on what you
enjoy.