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Apply Pareto’s Principle (80/20) to Everyday Life – The 4-Hour Workweek

In 1906 the Italian economist Vilfredo Pareto observed that 80% of Italy’s wealth was owned by a mere 20% of the population, and as such showed in lucid terms the ‘wealth condensation’ – or ‘rich-poor divide’ – of developed countries around the world… and the world as a whole. The term Pareto’s principle was then coined years later when this framework was shown to apply to an almost limitless number of applications; 80% of the effects come from 20% of the cause.

As you can imagine, this principle has far reaching implications when it is applied to such disciplines as marketing (20% of ads produce 80% of enquiries/sales), IT (80% of resources are used up by 20% of the code) and even business streamlining (80% of income is drawn from 20% of the customers; 80% of an employee’s time is taken up with 20% of the results)… but how many people have applied this principle to their personal lives?

When you realise that in your personal life you use only 20% of your belongings 80% of the time (clothes, music, etc.), and that when it comes to your own work (as a self-employed entrepreneur, an employee, or even as a student) you spend 20% of your time producing 80% of your output, you can start to take dramatic steps to alter your lifestyle.

And thus starts Tim Ferriss’ epiphany in his new book, “The 4-Hour Workweek” – the newest book to storm the tech and geek communities since David Allen’s “Getting Things Done” (GTD).

After realising that Pareto’s principle applied to almost every aspect of his life, he went from an over-worked, 16-hour day, start-up founder in Silicon Valley to an ‘ultravagabond’ – working 4 hours a week from any destination as he travelled the world on ‘mini-retirements’. As a Guinness world record-holder in Tango and a national kickboxing champion earning $40,000+ a month, Tim is living the good life – and in his book he promises to show us the secret to his success. The only question is, does he succeed?

Like many other books in the ‘personal/lifestyle development’ genre, The 4-Hour Workweek is crammed with tips and strategies on how you can – in this book’s case – be more efficient in order to free up more time and make more money so that you can do what you really want. The only problem is, I don’t want pages upon pages of tips or a set of rigid rules that I need to follow; I need an adaptable and expandable framework or principle that I can apply to my situation… I don’t want to be told exactly what to do, because the chances are it won’t apply directly to my circumstances, and as such is useless. Luckily, the book has a few of these too.

From helping you realise that the 80/20 principle can be used in you daily life, giving you a base structure on how to create a more efficient company and giving a useful structure on how to avoid work-day interruptions, the book is (on the whole) a useful read. Read with scepticism and with an analytic eye, you can garner some useful information from this book, but I would hesitate to take anything from it at face value. I’m still left pondering: ‘What can I do with this information, and what else in my life can be made more efficient with Pareto’s principle?

Ramit Sethi’s review is worthy of note, along with a few from John Chow is also giving away a signed copy!

One Comment

  1. Posted June 11, 2007 at 14:09 | Permalink

    Sounds like the premise is: work is not what you really want to be doing. What I did notice about this guy is his extraordinary willpower and tenacity. Being a world-record Tangoer or kickboxer requires either a ton of self-discipline or a boatload of passion (which will lead you to the discipline). Which is it? I can’t tell whether this guy approaches life like a soldier and will push and shove his way through his work at any cost, or like a artist who is entirely consumed by it.

    Of course, I haven’t bothered to read the book, but with 80/20 I suppose your blog entry should suffice.