The Pareto Principle (80/20 Rule)

The Pareto principle originally referred to the observation that 80% of Italy's wealth belonged to only 20% of the population.  But over the years, the principle has been expanded to describe the characteristics of typical distributions.  It indicates that most things in life are not evenly distributed.  
  • 20% of your employees produce 80% of the output
  • 20% of bugs produce 20% of computer crashes
  • 20% of your customers bring 80% of the profit 
Why is this useful? It is useful because it states that majority of results come from a minority of inputs or action.  We can then concentrate on putting in that first 20% that will make a difference.  Like say, saving 20% of your income and investing this every month could very well mean the difference between a luxurious retirement stage or having to strive and work hard for money forever. 

The small things that you do today will count in the end.  Start saving now! 

Related Posts Plugin for WordPress, Blogger...

Related Articles: