Pareto ‘s Law
Many successful people, using Pareto’s Law (the 80/20 rule) have reached quite great heights.
The essence of this law is that 80% of any positive result, only 20% of our efforts bring us.
Everything else is effort and time, we waste without even noticing it.
Therefore, by filtering out all unnecessary and superfluous, you can achieve excellent results with minimal costs.
Only 20% of the efforts of all the employees you have hired bring you real profit.
Your business has only 20% of products and 20% of customers, due to which the business exists and develops. After analyzing and directing all your efforts to the work that brings 80% of the result, you can significantly increase profits and make your life easier.
The role of the manager is precisely to concentrate on the most important points that bring profit and get rid of unnecessary employees, goods, costs, etc.
Thus, using only 20% of the necessary reserves, you will be able to achieve 80% of the result!
Discovery of Pareto’s Law 20/80
This percentage ratio of 20/80 was revealed by the economist Wilfredo Pareto at the end of the 19th century, investigating the distribution of wealth among different strata of society in England.
As it was revealed, 20% of the country’s residents owned 80% of the wealth of the whole of England.
With a deeper study, it turned out that such a pattern is also visible in other countries. The results of these studies were not explained at that time, and it was only in 1949 that Professor George K. Zipf drew attention to this principle.
Almost at the same time, Joseph Yuran published his research on this topic, proving that this approach is also true in the distribution of crimes, accidents and other processes.
Pareto’s law in simple life situations
In the relationshiph
If you think that Pareto’s Law only works in relation to work, then you are deeply mistaken.
In ordinary life, the same thing happens.
We cannot realize that only a few from the inner circle (friends, acquaintances) have a positive influence on us.
Everyone else is just wasting our vitality, taking up our time, which could have been usefully spent on achieving success, or on rest, recovery.
It is these 20% of people who fill your life with positive emotions that you need to devote the most time to.
Even a few minutes of communication with them will give you more than hours of communication with virtual acquaintances in networks.
The Pareto principle at home
Probably, everyone has things in their apartment, garage, car or dacha that no one has used for a long time.
Their whole purpose is to occupy space, both physically and mentally.
Put things in order and get rid of them, throw away all the junk.
You will immediately feel a surge of strength and inspiration, as if freed from a heavy burden.
Pareto in literature
Oddly enough, Pareto’s law also applies to the literature you read.
Only 20% of everything you read brought you real benefits, enriched you spiritually or was useful in life in practice.
Therefore, do not waste your time reading useless literature, it is better to re-read again what has had a serious impact on you and really helped in life.
Influence on the working rhythm
Each person has his own biological rhythms when he is most focused and works efficiently.
Observe yourself and allocate this time for maximum efficiency, then the work will be done easily and bring good results.
But the remaining time can be planned for the least significant things.
How it is used in financeah
Carefully analyze which sources give you 80% of your income.
It is on them that you need to direct all your attention and make every effort.
Everything else only takes away your strength.
Leave only investment types of earnings (deposits, stocks, Mutual funds etc.), which practically do not require large energy consumption.
Pareto method and time management
Of all the tasks completed during the day, you need to choose only those that led to any positive result.
All that was useless activity – remove from your to-do list.
The daily work plan, compiled according to the Pareto Law, will always be pleasant to please you with its results.
How it helps in self-developmentand
Devote time to the field of activity where you feel most successful.
Don’t waste time studying what you don’t like and in those areas where promotion is very difficult.
Find your strengths and promote them.
For example, if you like to communicate with people, then choose a field of activity related to communication.
If you do not like communication, conversations, discussions, then remote work in networks or home work is more suitable for you.