Life & Time Management 3 Ways How Paretos Principle Will Change Your Life

Call it whatever you want, be it the 90/10 rule

, the 80/20 rule. But knowing what did the Italian economist Vilfredo Pareto created and implementing it into your life will drastically change the course of your direction positively.

Basically, what Paretos Principle means is that in anything, only 20% of what we actually do provide 80% of the results. This is true in pretty much every aspect of our lives. To illustrate a simple example, in a shop that sells for instance, daily necessities, in order for the owner to generate positive cash flow, only 20% of the stock is generating and paying for 80% of the production required generating the income. This includes the overheads expenditures and labor.

1. Never Give Up

You might have heard the statistic, in every 10 businesses that start up, 9 will fail within 5 years. And in every 10 businesses that pass the 5 year mark, 9 will fail. This is especially true as it converts it into the wealth distribution of the population.

The people who provide the jobs, labor and the ones who generate economic wealth, are at the top 10% of the population. They provide approximately 90% of the labor and jobs, but still receive 90% of the economic wealth. They do this by basically, not failing and striving on.

As shown in the illustrated example in businesses start-ups, it only makes sense that out of every 10 business, the one special business that manage to survive eventually takes up the other 9s businesses. All wealth of the failed businesses is therefore transferred into the one sole surviving business. By giving up, you will never make it into the top 10% of the wealth distribution class as the top 10% never give up.

2. Locate and amplify the 20%

In every piece of work, venture or business, it is essential to locate the 20% which is actually producing 80% of the results that you have. This goes for almost everything that you do, be it business or other aspects in your life. For instance, you may have a business which sole marketing depends on the advertising. However, by applying and studying the Paretos Principle, you will soon come to understand that out of 100% of marketing efforts; only 20% of them are actually providing you with 80% of the revenue.

Locate them through statistics, recordings and numbers. With sufficient data, you will be able to organize and locate them, eliminate the stagnant 80% which does nothing, and amplify all efforts into the 20%.

3. Records and reports

In the information age, information is king. But using information towards your benefit is another thing. In order for you to make full use of information, proper records and data keeping must be in track, regardless of which area you wish to improve on. They must be accurate, reliable and non-emotional. With proper records, the results will show by itself which areas are the ones which is doing nothing and which ones are actually doing something.

Always constantly keep in mind that the 20/80 rule is in place. In order for you to locate and amplify them fast, you need to frequently improve and review changes. Businesses go through quarterly reports to look at earnings and where they stand financially. And within a micro level, they keep a weekly report, within that, a daily report.

The same goes for dieting. Where top notch trainers and athletes constantly are kept updated with their weight, body fat percentages and various aspects of muscle distribution and heart rate capacities. You will soon find out that through disciplined records, you will be able to find where the important things are and what does not actually work.

Summary

There are many more ways of how the Paretos Principle actually benefits you. But it is hard to squeeze everything into such a short article. If you are interested in finding out more, do a quick search online where you can find many books and information on how it will actually affect your life. You will gain valuable insight on aspects in your daily life and how things work on a macro and micro level.

Towards Your Success,

Aaron Leow

www.aaronleow.com

by: Aaron Leow

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