Using the 80/20 Principle for Financial Success

The 80/20 principle is a simple concept. Basically, it means that most effective results (80 %), are produced by 20% of the effort put out. The same principle can be found in other areas, such as wealth distribution, where 20 percent of the population, more or less, holds 80 percent of the wealth.

The numbers of course aren't exact in practical realities, but the concept is universally the same: the most effect is produced by a small portion of the total effort. The reverse is true as well. 80 percent of effort is wasted working to achieve 20 percent of results.

How does this effect you at a personal level? For the purposes of this article, I will be showing how the 80/20 principle keeps you from making money by wasting too much of your efforts on ineffectual tasks, and how to use the principle to focus your efforts more productively.

It's likely that you are busy, and hard at work a great deal of the time. A person can be extremely busy, but ultimately getting very little valuable work done without even realizing it. It may seem like you're spinning your wheels, and never getting ahead. And that's because you probably are. You might be extremely efficient and organized, but if you haven't stopped and determined the actual value, even the necessity, of the things you are doing, you're still wasting precious time that could be put to better use. So how do you work more effectively, and ultimately make more money?

First, you need to determine what is effective and productive, and what is not. This all depends on what it is you do to bring in your income. For example, I write articles for content sites on the Internet, and for my blogs. If I analyze what is productively making me money, I find that there are specific topics and types of articles that make the majority of my income, while there are a large number of article topics that bring in a lot less. In order to use the 80/20 principle to be more effective, I need to concentrate my efforts on those few topics that work, and discontinue wasting time on the ones that don't.

Cut out ineffectual tasks. In my case, I realize what isn't a productive use of my time. Any time spent writing articles that I know won't bring in a good amount of money should be replaced by more time spent in keyword and topic research and search engine optimization. Less time in forums and checking email, and more time writing.

Outsource if you can. Outsourcing isn't just for large corporations, anyone can benefit from it. It could be as simple as assigning your kids more chores or hiring a part-time house keeper so you have more time to work. Basically, if someone else can do it as effectively as you can, and you can afford it, do it. Unless making websites is your business, you can save time by hiring someone to do it, and save a ton of time for the work that really brings in the money. Outsource as much as your income allows. The more time you get to spend on your most productive work, the more money you will make, and the more you will be able to afford for outsourcing. Eventually, you will be able to spend the majority of your time productively.