The 80/20 Rule of Everything

Look around you. Everywhere around you.

20% of the things get 80% of the results.

Try not to get wrapped up about the numbers. But just realize that the vast majority of everything you see comes from the vast minority of sources.

This is why a single human being comes from only one out of 300,000,000 sperm cells.

This is also true with plants and animals.

The 80/20 principle is also known as the Pareto Principle, named after Vilfredo Pareto who noticed in 1906 that 20% of the people owned 80% of the land in Italy.

He was an economist by trade and today we see the same things playing out: that 20% of the companies end up owning 80% of the market share.

Amazon sells more books than it’s top five competitors combined.

Look at natural disasters. The top 20% most devastating natural disasters have caused more devastation than the bottom 80% combined.

The top 20% most populated cities in the world hold more than the bottom 80% of cities.

And 80% of the revenue generated at venture capital firms comes from the top 20% of investments.

This phenomenon is also why 20% of the world’s population owns over 80% of the world’s resources.

And this is exactly why the rich get richer and the poor get poorer. This phenomenon has been observed for centuries. And it’s even alluded to in the Bible:

“For unto every one that hath shall be given, and he shall have abundance: but from him that hath not shall be taken away even that which he hath.”-Matthew 25:29

So what is the point?

The point is that if you want to maximize the returns in your own life, focus on the top 20%. And if you want to be ambitious, completely disregard the bottom 80%.

This is obviously a very risky (and scary) move, as most of us feel the need to output more in order to feel productive.

In a financial portfolio, you can hedge the risk on what you think will be the top 20% performing holdings with the padding of the other 80% of “safe bets”.

But life doesn’t work this way, you see. Because you can only do so many things. You might be able to successfully diversify a financial portfolio. But there are only so many things you can do at one time…so you’d better consider which things you will invest your time and energy in.

If you’re lucky, you might come up with half a dozen revenue streams over the course of your life. For the vast majority of people, one revenue source is all they’ll ever see.

So it’s up to you how you want to hedge the risk. Do you want to keep investing 80% of your time into things that probably won’t make a difference in your life for the sheer sake of staying safe?

Or do you want to dive right into the 20% that you know gives you 80% of the results?

Personally, I choose the latter.

I would rather die having failed at the 20% never fully panning out than to have lived chasing my tail over the 80% of output that may never realize its full potential.

Just take a moment to ask yourself: what are those 20% things in your life that end up giving you 80% of the results?

And then ask yourself to what degree you want to abandon the 80% that’s just filler, keeping you from going all-in on the 20%?

I’ll leave you with a final quote:

“Life is either a daring adventure or nothing at all. The place between your comfort zone and dreams is where life happens.” -Helen Keller

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