The 80/20 Principle: The Secret to Achieving More With Less

Author: Richard Koch

“The 80/20 principle asserts that a minority of causes, inputs, or effort usually lead to a majority of the results, outputs, or rewards.”  It means 80% of what you achieve really comes from 20% of the efforts spent. Everything in life is not well balanced. Time/efforts/returns are not proportional ever. The key takeaways from the book are:

80/20 principles for individuals:
80% of achievement and happiness takes place in 20% of our time.
Our lives are profoundly affected by a few decisions and events.
Most of what we do is of low value. Some small portion of our time is more valuable than all of the rest. Explore this “imbalance” to maximize your happiness

80/20 principles for career success:
Specialize in a very small niche: develop a core skill
Identify where 20 percent of effort gives 80 percent of returns
Learn from the best
Become self-employed early in your career (firms can no longer deliver security, your expertise and 80/20 principles do)
Employ as many net value creators as possible and use contractors for everything but your core skills
Exploit capital leverage

80/20 principles for investment:
Make your investment philosophy reflect your personality
Be proactive and unbalanced
Invest mainly in the stock market
Invest for the long term
Invest most when the market is low
If you can’t beat the market, track it
Build your investments on your expertise
Consider the merits of emerging markets
Cull your loss markers
Run your gains

80/20 principles for happiness:
Exercise
Mental stimulation
spiritual/artistic stimulation/mediation
Doing a good turn
Taking a pleasure break with a friend
Giving yourself a treat
Congratulating yourself
Maximize your control
Set attainable goals
Be flexible
Have a close relationship with your partner
Have a few happy friends
Have a few close professional alliances
Evolve your ideal lifestyle