Vail Daily column: The 80/20 rule: A good way to conduct your life | VailDaily.com
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Vail Daily column: The 80/20 rule: A good way to conduct your life

The 80/20 rule, known as the “‘Pareto Principle” named after economist Vilfredo Pareto, is a principle that states, for many phenomena, 20 percent of invested input is responsible for 80 percent of the results. We live with this rule/principle whether we are aware of it or not, so why not use the percentages to our benefit? This percentile ratio can be a good rule of thumb when used as a guide in making choices that improve the quality of our lives.

Think about it. Take a close look at your finances, for example. Accumulated debt is probably not caused by excessive spending on the majority of your purchases. It narrows to 20 percent “messing up” leading to 80 percent adjusting and budgeting, to make up for it. Why not make efforts to concentrate on, and target the 20 percent, thus getting better results in the 80 percent. Focusing on the 20 percent area of struggle, avoiding temptation and staying on track will consequently produce positive results in your budget and your lifestyle. It won’t be easy — exercising discipline never is — but self-control in vulnerable situations makes sense. The payoff of purposely applying the Pareto Principle can reap multiple rewards.

On Taking Risks

If you are a risk taker, then this is a great tool to utilize. Applying the 80/20 rule allows safe routes in 80 percent of your dealings, while allotting 20 percent for higher risk ventures. I’m not suggesting a careless free for all, but calculated planned undertakings. If your endeavors pay off, wonderful. If not, then you haven’t caused your lifestyle irreparable damage. You won’t be out of control because the 80/20 ratio sets a solid equation for reaching successful outcomes. If 20 percent of your time, money, talent, etc. doesn’t cover your endeavor, then take a better look at the risk — it may not be something you should do. Avoid spur of the moment decisions. Take those risks that challenge your adventurous side, but remember self-control and avoids regrets. Evaluating, calculating and adjusting will improve your chances for success!

On Being Cautious

Even if you consider yourself an overly cautious individual, the 80/20 principal is a very effective guide for you. You can feel secure trying new avenues of interest with minimal chances for failure. If you prefer to take things slow and careful, then do an evaluation of your lifestyle. Most of your experiences will fall in line with the 80/20 rule already. Identify areas you want to change, or simply improve. Target only one change at a time, if that feels better for you. Continue following a routine you are comfortable with 80 percent of the time. With the other 20 percent, plan out new experiences. Maintain your comfort zone, by engaging in small changes. Using only 20 percent of your cash, time or energy keeps peace of mind. No giant steps, no big chances, no worries about losing more than you can afford. Following the 80/20 concept, builds a sense of security. Enjoy the results! According to the ‘Pareto Principle’ that 80 percent pay off will change your life!

Applicable Always

The 80/20 rule can be applied in any situation. Financially, if you invest 20 percent of your income in a sound investment plan, using the 80/20 rule within that investment plan, you stand to reap amazing benefits. The same goes for your health. Add 20 percent more exercise and healthy food to your daily routine and the results should speak for themselves. When shopping for food, use the 80/20 rule in your shopping cart. If you set aside 20 percent of your free time for a hobby that fulfills you, the other 80 percent of your life will reflect a happy satisfied person. Ask yourself, “Is what I am doing, or about to do, wise, healthy, honest and safe?” If the answer is yes, apply the 80/20. You may not like all the criteria, but if you follow it, you will have a format for smarter actions. Start ruling your life instead of letting your life rule you.

Asking yourself questions is the best way to define your needs. Can I improve my eating habits? Do I need to improve my health? Do I spend too much time on this hobby? Do I spend too much money? Is this too much of a risk? Am I too cautious? If any of your responses are for change, then devise a plan — put it in writing if that helps. Apply the 80/20 to each area of concern. If you change one thing at a time, or jump in head first, then this principle will clarify strategies, risks and rewards. Thank you, Pareto, for revealing the phenomena that states 20 percent of our invested input is responsible for 80 percent of the results.

If you are interested in finding out more about the Vail Chamber and Business Association, then please contact us at 970-477-0075 or email info@vailchamber.org.

Cabal Yarne is the owner of Arriesgado Clothing Co. in Lionshead Village. He is a Vail Chamber & Business Association board member.


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