Applying the Pareto Principle in Real Life

Pareto Principle or the "principle of vital few" states that roughly 80% of the effects comes from 20% of the causes. It is a very common anecdote used to describe several business problems & their solutions- like 80% of the revenue comes from 20% of your business i.e.core competency but fascinatingly it has several unique real life applications:

(1) 80% of the exam comes from 20% of the course content!

(2) 20% of the people you know account for 80% of the total amount of your mobile bill..!

(3) 80% of the wealth in India is in the hands of 20% of the population

(4) 80% of the times you wear clothes which form 20% of your wardrobe

(5) If you are a regular at quiz competitions, you would know what i mean-80% of the questions are answered by 20% of the participants

(6) In races, for ex: horse racing, 80% of the races are won by 20% of the horses

(7) If you invest in equities- 80% of your profit would be coming from 20% of the portfolio(out performer stocks), likewise if you are running into losses you would observe that 80% of your losses are due to 20% of the entire portfolio (laggard stocks)

(8) In the music and entertainment industry, one would observe- 80% of the popularity or fame is achieved by 20% of the work done (though generalizations can't be made, but this phenomenon has been observed quite often),
Ex: If an artist has 3 hit singles out of an album of 10 songs, his/her album would sell even though the rest of the album is not worth listening

(9) & Finally, 80% of the happiness in your life is due to 20% of the activities/events that take place :)

Do note that the numbers '80' & '20' do not matter here, it can be much higher like '95' & '5' but the main concept to be kept in mind is that certain activities account for majority of the output in your life

-By: Tejas Singh