Practice the 80-20 Rule

by Ed

I thought I’d start of the year to remind all the readers here about the 80/20 rule. I’m sure you have heard of it before. If not, the 80/20 rule basically says that 80% of your results in life will come from focusing on the 20% of things you do best or you must do. Also called the Pareto principle, statistically almost everything in life follows this principle. For example, in a sales organization, 80% of all the sales will be brought in by 20% of the sales people. Instead of just getting down goals setting, which is important, by the way, you must also brush up on the skills that will help you get where you want financially.

photo from wikipedia

The same can be said of your time. If you just focus of doing the 20% of things that really matter, you will generate 80% of the result you want. If you want to earn more income, have a clear idea what your 20% is. If not, your financial situation will not change. Look at it this way. In order to change you life, you need new input that you need to put into practice.

Let’s say you want on invest in real estate this year. You have to spend time learning about real estate, attend some seminars and go look at some property. All that takes time. And most of us don’t have time to carve out unless you have been a couch potato in the past. Most of us have jobs, family, children and 1001 things to manage and to take care of. The only way forward is to reduce stuff you are doing but don’t give you the results you want. And the problem is, most of the stuff that needs your attention are urgent but not that important. A personal example, moving the lawn. Urgent not very important. This task should be and must be delegated.

Make a list of the important task. Generally speaking, most important task that are not urgent are the ones that will get you ahead. Say learning about real estate investment. It is important to your financial future, but a messed up house is more urgent to clean, well for some of us anyway. But, you get the idea. If you have to procrastinate, learn to procrastinate on not doing the stuff that don’t matter. If you do this, yeah, your home might not be perfect but still the important life changing things will get done. More often than not, you probably find a quicker way to get the urgent things done more effectively along the way. Most people try to live their lives at a ever more rapid pace. That will only take the joy out of live not to mention probably giving you a heart attack.

If I have to leave a new year message, this would be it. Do less, not more. But do the important stuff first.

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