Strive to be good enough for most things if you want to be efficient with your life.
The 80/20 rule, also known as the Pareto Principle, states that roughly 80% of results come from 20% of effort. This is one of the most helpful concepts for time management.
The exact percentage split is not important, the point is to make sure that everything you do is giving you maximal benefit for your input. Don’t let anything cost you more than it’s worth in time and energy.
We are all bound by our most limited asset, time. Every decision has a trade-off that involves our limited time. Why spend more time and effort when it’s going to get you diminishing results?
Perfect Is The Enemy Of Good
If you’re a perfectionist, let me tell you that most times the juice is not worth the squeeze.
There are very few things in life that require your absolute 100% effort because every single detail has to be spot on. Most things in life just need to be “good enough.”
Remember your time is limited and there are more important things to spend your energy on. Achieving perfection in everything is just inefficient.
Practice using the 80/20 rule in your everyday life. Take a look at tasks you need to complete, what can you do that takes a little amount of time but gets a lot of results? Worry about doing the small things with little impact after, if they should even be done at all.
A great example is maximizing your productivity through your schedule. Everyone has ups and downs in their productivity and energy levels throughout the day. Usually, the most productive hours will be early in the morning or late at night when you can clear away distractions to get things done.
I’ve noticed that by taking advantage of the 4-5 hours early in the morning (~20% of the day), I can get difficult things done way faster, easier, and more efficiently because my energy levels and mental clarity are at their best.
By getting my important tasks out of the way in the morning, I pay myself first and I am guaranteed to have a successful rest of the day to squeeze in less important tasks if I can.
80/20 Your New Year’s Resolutions
At the end of every year, our New Year’s resolutions are shockingly predictable and comes down to two things:
- Get healthier (this is the most popular resolution)
- Get wealthier
If these New Year’s resolutions sound familiar to you (they certainly do to me) here’s how to use the 80/20 rule to make sure you accomplish both this year.
Stick To The Basics To Get Healthier
In his blueprint for training, Arnold Schwarzenegger (one of the greatest bodybuilders of all time, former governor of California, and Hollywood star) said:
“To become a champion, you need to train the basics.”
To guarantee that you improve your most valuable asset, your health, stick to the basics. The 20% of things you do for 20% of the time in a day, will give you the results you want.
- What’s the 20% of food you eat 80% of the time? Set your diet around healthy options that suit your goals, and eat those foods the majority of the time. Balance is key, not an ultra-strict diet 100% of the time
- What’s the 20% of exercises you do that gives you 80% of results? Focus on spending time training the basic, compound movements that stress your body the most and force it to adapt
- What 20% of bad things cause 80% of your stress? Make yourself happier by focusing on getting rid of the bad things that cause you the most misery
By only focusing your time and energy on the 20% of things that have the most impact on your health, you are setting yourself up for sustainable success.
Sometimes doing less is more. Put your energy and focus on the main building blocks of health and you’ll quickly see it’s much easier to achieve your goals instead of trying to get every single small detail right. Just get started and learn what works best as you go.
Stick To The Basics To Get Rich
Getting rich is simple, but not easy. It takes effort but you don’t have to be special or extraordinary to become rich.
Stick to the basics to get rich: earn more than you spend, invest regularly (in low-cost diversified index funds), and avoid losing money by taking unaffordable risks.
These are the 20% of actions that will make you rich.
However, doing these basic actions consistently is not easy since our natural tendency is to procrastinate and not take action.
The 80/20 hack to building your financial freedom is to have a money system that incorporates all these 20% actions and makes it simple for you.
There is beauty in simplicity. The financial industry loves to make things overly complicated so people think they can only succeed with professional help. This is not the case in this day and age.
Nowadays, it’s easy to manage 80%+ of your finances using the simple, free-to-use tools available to track your finances like a hawk and self-manage investment portfolios without having to pay excessive fees to financial advisors.
Most things in personal finance that make the biggest impact are simple to learn. However, you cannot expect to become rich (and stay rich) without basic financial knowledge. There is so much free financial education out there on the internet today.
You only need to do a few simple things: improve your financial literacy, set up a money system, and take control of your financial freedom.
That’s the 80/20 way to get rich.
80/20 Rule Changes To Improve Your Life
Mastering the 80/20 rule is recognizing that sometimes the extra effort is not worth the little reward.
Just understanding and applying this idea in a few areas of your life will free up tremendous amounts of time and energy, making your life easier.
In addition to shifting my work schedule around my productivity and energy levels, here are some other ideas to apply the 80/20 rule to your life:
- A few of the things on my mind are actually important to making progress in my life, the other 80% of my thoughts are just noise.
- A few of my hobbies took up a lot of free time but only brought me 20% of fulfillment. Given time constraints, I’m only focusing on the 20% of hobbies that actually bring me 80% of fulfillment, and putting the other hobbies in the backseat for now.
- A few basic exercises at the gym gave me 80% of the results. If I focus most of my energy on those few exercises, the progress takes care of itself (i.e. compound lifts that target multiple muscle groups and put stress on the body that no other exercises can)
- A few friends and relationships accounted for 80% of the best experiences, memories, and happiness in my life. With limited time, I have to focus on maintaining and improving those key relationships.
- A few things that I focus my spending on brought the majority of my satisfaction with my lifestyle. The other 80% of spending has not been as useful or important as I previously thought so I cut back on them.
- A few things at work made the biggest difference in performance. 20% of the work brought in 80% of the recognition. Figuring out what those 20% things are and cutting back on things that don’t move the needle (i.e. checking emails consistently versus in batches, writing excessively long memos, taking a long time to make unimportant decisions, etc.), is working smart.
Again, the exact 80% and 20% split is not important. The point is to be deliberate and make sure everything you do is giving you maximal benefit for the time and effort you put in.
Most people (not Rich Henry readers!) don’t consider the efficiency part of everything we do in life. We cannot dedicate our 100% to every single thing because we are limited by our time and energy.
The good thing is we have control over where we spend our effort and we can become more efficient with our decisions over time. Think of the 80/20 rule as a tool, a pair of lenses to view all aspects of your life through.
Perfection is overrated. What changes will you make in your life today based on the 80/20 rule?