# What is the Pareto Principle: explanation, examples, meaning

Greetings, friends!

Any person interested in self-development and increasing personal efficiency has heard about the Pareto principle. That being said, many of us don’t even realize that it really applies to most situations in real life. And in vain, because using it, you can significantly increase your productivity in all areas. In this article, we will understand what the Pareto Principle is, consider a few examples, and also learn how to apply it correctly. Let’s start.

## What is the Pareto principle?

The Pareto Principle is a rule of thumb that 20% of the effort brings 80% of the result, the remaining 80% of the effort brings 20% of the result. In other words, only an insignificant part of the available factors has a decisive influence on a certain process. There are many formulations of this principle, but in the most general sense, it states that 20% of the effort provides 80% of the result. Knowing and understanding Pareto’s Law allows you to more efficiently plan time, calculate resource requirements and prioritize.

The principle is named after the Italian economist and sociologist Vilfredo Pareto. In 1897, he analyzed the distribution of material wealth and found that 80% of all wealth and resources are concentrated in the hands of 20% of the population of his country . In this case, it was an observation based on real numbers, and at that time the scientist did not extend it to other areas.

By the way, Pareto himself did not formulate any principles. He just made an observation and published the results of his work. And more than half a century later, in 1951, economist Joseph Juran came to the conclusion that this pattern is found in all areas of our life. He called this phenomenon the Pareto principle and formulated it in its modern form. There are also alternative names such as the 80/20 Rule.

It should be borne in mind that these figures are very conditional, and the meaning of the principle lies only in the uneven ratio of resources and results. In this case, the values ​​80% and 20% are mnemonic designations, and the real numbers may be different. In various fields, the ratio can be 30% to 70%, 90% to 10%, or even 95% to 5%. With this assumption, the Pareto principle turns into a full-fledged empirical law applicable in economics, sociology, management and other sciences.

## Examples of the manifestation of the Pareto principle

As noted above, this pattern can be seen in almost all areas of our life and work. To make it easier for you to understand what the Pareto principle is and how it manifests itself, we will consider the most common formulations that are most often found in the literature, press and other sources.

1. 20% of the world’s population owns 80% of the wealth.  It was with this formulation that the existence of the Pareto principle began. This thesis remains popular in our time, despite the fact that this ratio has long ceased to be true. In 2018, the international organization against poverty, Oxfam, published a report according to which 82% of the world’s wealth is concentrated in the hands of just 1% of the population.

2. 20% of people drink 80% of all beer in the world.  This joke is popular among beer drinkers (as well as their wives). And she is most likely close to the truth.

3.  For 20% of working time, most people manage to do 80% of all work.  Of course, the reason is not that these people are idle the rest of the time. It’s just that the ability to work with maximum efficiency is not always present due to a lack of information, lack of orders, the influence of distractions, and more.

4. 20% of your efforts give 80% of the results.  This is one of the most popular formulations, and it applies to almost everyone.

5. 20% of your knowledge allows you to solve 80% of problems.  Of course, this wording does not apply to everyone. But for truly active people who take on new challenges every day, it is fair.

6. 80% of the time you wear 20% of your wardrobe.  And the point here is not at all in seasonality. Everyone has their favorite things, there are just comfortable ones, and there are festive costumes for special occasions.

7. In 80% of problem situations, 20% of friends help.  This does not mean that other friends are bad. It’s just that every relationship has its own specifics, and we tend to address the same people in certain situations.

8. In 80% of cases, we only manage to prepare 20% of the dishes that we know how to cook.  It doesn’t take much effort to diversify your diet. Despite this, most people get by with only a few traditional dishes.

9.  80% of users of  professional software use only 20% of its capabilities. Of course, we are not talking about a notebook or an Internet browser, but about complex programs for processing graphics, documents, statistical data and other information.

10. Almost every manufacturer or distributor receives 80% of the profit from 20% of the production. Everything here strongly depends on the assortment and the specifics of the products, but there are always the most popular products. At the same time, it is also impossible to refuse the rest of the assortment.

## How to use the Pareto principle in life?

This simple principle seems like a joke to many, but if used correctly, it can significantly increase your productivity. You can start analyzing right now where you are spending your time and other resources in order to focus on those actions that give 80% of the results. Admit to yourself that a large part of your actions are of very little benefit, and try to spend as little time and energy as possible on unproductive activities.

To increase personal efficiency, it is not enough just to know what the Pareto principle is. You need to regularly evaluate your plans, analyzing each action in order to understand how much benefit it will bring. Give preference to the actions that will give you maximum results. Of course, this will not allow you to increase your performance fivefold. However, the effect will be quite tangible: you will have time to do more useful things, spending less effort and time.

Remember that the Pareto principle can be applied to work, everyday life, and even play. A lot also depends on the quality of rest, so you need to rest in such a way as to get the maximum of positive emotions in a small amount of time. For example, an evening walk with a loved one in the park will bring much more positive than an online game or watching a TV series. Start applying the 20/80 Rule now and you will very soon notice how you are becoming more productive in all areas of your life.

## Examples of real application of the Pareto principle

Let’s move from abstract reasoning to real-life examples, each of which can be a great tip for you on how to apply the 20/80 law to improve your own effectiveness.

1.  Managing your time.  The whole point of the practical application of the Pareto rule comes down to not wasting time on unproductive activities. When planning your day, only list the important tasks. This will allow you to be much more efficient at the same cost as before.

2.  Self-improvement.  When choosing which skills and abilities you want to work on, evaluate how much practical benefit they will bring. For example, if you need to read English literature for work, learning English should be a priority. If you want to learn it for general development, this is also good, but it is better to do it in your free time.

3.  Biological rhythms.  Our efficiency and productivity largely depends on the time of day, but for some reason very few people take this fact into account and use it. Start observing yourself and noting when it is easier for you to focus on work. Henceforth, it is during these periods that the most important tasks should be solved.

4.  Distribution of personal or family budget.  Analyze your recent purchases. Surely you could do without most of these things by investing the money spent in something much more important to you and your family. From now on, just think about each purchase, and if you have doubts about its importance, immediately come up with what you would prefer to spend this money on.

5.  Self-education.  Every successful person is constantly working to improve and expand their professional skills. In this case, you have to study a lot of information, which later turns out to be practically useless. Therefore, if you want to deepen your knowledge in some area, making it more “fundamental”, think about whether it would not be more useful to learn something new and more important.

6.  Superfluous things and wardrobe items.  The Pareto principle is a universal rule that is true even for everyday things. Most people wear only 20% of their clothes and shoes, do not use much of their household items, and will never read 80% of the books in the closet. All these things take up a lot of space, and if you get rid of them, you can make your home much more spacious and comfortable.

7.  Communication.  Even Aristotle said: “Man is a social being.” Indeed, even introverts and social phobes need regular communication. We constantly communicate with dear people, friends and acquaintances, close and distant relatives, neighbors and just acquaintances. According to the Pareto rule, only 20% of this communication is really important to us. Therefore, try to devote more time to communication with the closest and dearest people, reducing the “quota” of neighbors and distant acquaintances.

## Practical part

Friends, learning to apply the Pareto Principle in life is only half the battle. The second half of success is to set goals correctly and move in the right direction. If you want to become more efficient in work and life, learn to set goals and accomplish more in less time, I recommend you the course “Goal Setting” from Wikium.

This course will help:

• Not only dream, but also realize
• Get inspired for new goals
• Be more positive on the way to the goal

What the course consists of:

• 6 lessons
• Practical exercises and guidelines
• Videos

You can: