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I first came across the term “80/20 Rule” when I was reading Timothy Ferris’ widely acclaimed “The 4-Hour Work Week”. The more Tim explained and elaborated it in his book, the more I was drawn to this intriguing new concept.  So what exactly is the “80/20 Rule”?

According to Wikipedia, the Pareto principle (also known as the 80/20 rule or the law of the vital few) states that, for many events, roughly 80% of the effects comes from 20% of the causes.

**mindblown**

Right at the top of my head, I could think of several ways that I could apply this concept. For example, what are the 20% of your clothes which you wear 80% of the time? What are the activities that you’re doing 20% of the time that gives you 80% of your happiness? What are 20% of the food you eat  80% of the time? I could go on, but simply by analyzing at the vital 20%, you’ll be able to determine several habits, good or bad, that might shape your life. Even while I’ll typing, I’m starting to realize that 20% of my blog posts might generate 80% of the traffic flow to this site!

Back when I first applied the “80/20 Rule” to my life, I realized a few things:

  1. Television shows and computer gaming made up 80% of my spare time, but only brought me 20% contentment. Being good at DOTA and turning into a television junkie wasn’t particularly helpful in my career or my love life.
  2. 80% of my behavior in life or at work only brought 20% of recognition to myself.
  3. 20% of my thoughts were actually causing 80% of the insecurities I felt in myself. Being jobless after I left the investment hedge fund wasn’t a great feeling.

Recognizing all these, I sought to develop better habits and achieve a better way of living life. I’ve since stopped gaming, and catching the latest Netflix show became less of a priority than brushing up my knowledge on achieving financial independence.

4 Ways To Apply 80/20 In Your Life

  1. Making your loved ones feel cherished. How do you spend 20% of the time with your life partner that allows you 80% of the happiness you feel in your relationship? What is that one special activity that allows both of you to foster a lifelong bond? For us, it would be traveling. We don’t travel much, but when we do, it’s always about exploring new cities and cultures together in a jam-packed itinerary. We grow together as a couple, sometimes we get lost together in a foreign land, but most importantly, we build memories together that will last us a lifetime.Check out my upcoming post on Budget Traveling within South East Asia.
  2. The little things count at work. It pays to be hardworking, showing up earlier than your peers and bosses, and being the last to leave the office. I’ve always been an advocate for being a relentless worker at the workplace, but sometimes, it just isn’t enough. 20% of the things we do at the workplace might just give us 80% of the credit and recognition we deserve. Simple things like showing concern for the colleague who just came back from a 3-day medical leave, or the occasional smile to your boss who just walked past you in the corridor, could benefit you greatly in the long run.
  3. Focus on your winners. Coming from an investment hedge fund, we are often taught on cutting your losses early and letting your winners ride in our portfolio. Likewise, I applied the 80/20 Rule and focused on the top 20% of my equities that were giving me 80% of my capital gains. Or if you’re a day trader, you might realise that 20% of the trading days account for 80% of your profits. In the IH Investment Portfolio, I keep individual stocks that I have picked (after I’ve done my due diligence of course) to just roughly 20% of my total portfolio, as I believe they will account for 80% of the capital gains I will have.Related: The IH Investment Portfolio
  4. Proper time management and building a side hustle. Are you spending sufficient time in generating passive income? Are you dedicating 20% of your spare time in building up another source of income, so as to escape the rat race? Some activities that I have done to build up additional sources of income: Starting an investment portfolio, sourcing and selling on Lazada, selling 2nd hand items at home in Carousell, refining and improving the way my family business is run, automating how items are sold in my sibling’s blogshop. The point is to never stop trying to experiment with new ideas and new concepts, and not taking “No” for an answer!You are only limited by the boundaries your mind creates!

Readers, what do you think about the “80/20 Rule”? What are 20% of the habits that account for 80% of success in your own lives? Do share some tips on how to 80/20 your life!