Summary
17-minute read
Audio availableLiving the 80/20 Way
17-minute readAudio available
Learn how living the 80/20 way can help you find happiness and success by simply doing less.
Like most people in today's society, you may be tired of the daily grind. You simply wake up, head to work, sit at your desk all day, head home, eat dinner, go to bed, and do it all again the next day. There has to be more, right? Well, according to Koch, we are living life all wrong; instead of working to live, we live to work. We spend most of our time exerting our energy at work, only to find that when we get home, we are too exhausted and to give our best selves to our families and friends. Here’s where the 80/20 principle comes in. The 80/20 principle refers to the observation that roughly 80 percent of results stem from 20 percent of causes. For example, the world’s top 20 percent of people generate 80 percent of the world’s wealth.
While this principle has been used successfully in the business and economics world, it can now be applied to the lives of any individual. In other words, we can achieve more by doing less. As you read, you’ll learn how to find your happiness islands, how to save money like the wealthy, and lastly, how living a simple life may be the key to success.
Read more
--:--
--:--
Download our free app:
Download the book summary:
"Living the 80/20 Way" Summary
Font resize:
Summary by Lea Schullery. Audiobook narrated by Blake Farha
Introduction
Imagine working just two days a week and gaining better results and pay than you do working a full week. Imagine finding a simple solution to your problems that can help you make a living, earn money, find success, and even find happiness and fulfillment. All of this sounds too good to be true, right? Well, it’s not. What if I told you that you could transform your life by following the 80/20 way? When you follow the 80/20 method, you can expect a real change in your life by doing less. Based on the 80/20 Principle intended for business readers, the 80/20 Way can now be applied to anyone willing to make a change. You no longer need to be a big-time business executive to understand or apply the 80/20 way to your life. Throughout his follow-up book, Koch “shows you how to apply less is more and more is less to your self, work and success, money, relationships, and the simple, good life, and will help you develop a personal action plan to transform your life.”
Chapter 1: By Working Less, You Can Achieve More
If you think about it, all progress in civilization involves getting more with less. For example, nearly 8,000 years ago, humans moved from hunting and gathering to a system of agriculture in which they cultivated land and domesticated the animals. Then, an agricultural revolution led to the creation of machinery that transformed our productivity. 300 years ago, 98 percent of the working population worked on the land. Today, however, only 2-3 percent of the workforce in developed countries is involved in agriculture. Yet, we produce much more food today than we did all those centuries ago! In other words, we are producing more with less.
Similarly, just 40 years ago, computers were massive and clunky and cost a lot of money to manufacture. Today, computers are becoming faster, smaller, and even cheaper. We are getting more results with fewer resources. This is the 80/20 principle in action. Unfortunately, we as a society fail to use this principle in our private and social lives. Instead, we feel that we must continue to build our careers and work ourselves to the point where we have no available time or energy for our friends, family, or activities that we actually enjoy. So how can we use the 80/20 principle in our daily lives?
The first step might be as simple as pausing and asking yourself, “How can I get more with less in this project? What few things could I focus on that will generate the bulk of the benefits from this project?” Here’s where personal time management skills will unleash the power of the 80/20 principle. When you realize that there is no such thing as “too little time,” you can begin to organize yourself to be your most productive. For instance, when you’re in the zone, you can accomplish in just a few hours what would have usually taken days, weeks, or even months!
Say you are self-employed and give yourself just two days to work on a project that would normally take a week. If you give yourself an entire week, you might find yourself procrastinating and working on things that are just a waste of time. If you spend just two days a week on your most valuable activity, you should be able to get 160 percent of the value that used to take five days to generate, and still have three days left over to do what you want!
Chapter 2: The 80/20 Three-Step Process
When it comes to the 80/20 principle, there are three steps to make dramatic improvements in your life. Like you would a vacation, first, you have to choose a destination! Ask yourself where you want the 80/20 principle to take you. Your destination should be a place that reflects what you truly care about, so begin by reflecting on what part of your life is most important to you.
To see this in action, we can take a look at Steve, a restaurant owner in Cape Town, South Africa. Steve decided that he wanted to start living an 80/20 life, so he began by identifying the professional and personal areas he wanted to focus on. The most important things for him were starting a business, focusing on hospitality, and then working on his rock music and teaching. Steve’s destinations were clear to him, so the next step was to find the best route to get there. Finding a route may seem overwhelming at first as there are several routes to just one destination. Therefore, it’s important to figure out a path that will get you there the fastest.
Koch’s rule-of-thumb is that the optimum 80/20 route will be the one that is the most fun and least worrisome! Perhaps your destination is finding success as a salesperson, you could take several routes to achieve this goal, including taking classes, finding a mentor, getting an entry-level job, and more. Your job, however, is to find a route that will offer the best results, so if you aren’t good at school, don’t go that route and get a mentor instead.
Your final step is to take 80/20 action. Once you’ve determined a destination and found a route that works, it’s time to start moving. Take advantage of every opportunity, and once you take action, your life will be transformed for the better. Koch advises, “Find the route to transform your life, so you get more results with less worry and less effort. Then act, and be open to the great luck that the universe will try to bestow on you. When you’ve discovered and selected the authentic parts of yourself and make them work smoothly and easily, you’ll be unique, highly valuable, and yes, very happy too.”
Chapter 3: Find Your Happiness and Achievement Islands
When we think about life, we tend to dwell on the concept of time. We hate wasting it, we never feel like we have enough of it, and more importantly, we can never get it back. Even worse, why do we feel as if time flies when we are having fun, but drags on when we are bored or working? But what if we could switch them? “If we make the ‘good’ times long and the ‘bad’ times short, we revolutionize our lives.” So how can you do this?
Find your happiness islands. Happiness islands are the small spaces of time when we are at our happiest. So think about the last time that you were truly happy, then think about all the times before that. What does each of these moments have in common? Were you with a particular person, in a special place, or doing a particular activity? What are the common themes? Next, it’s time to figure out how to multiply the amount of time you spend on your happiness islands. For instance, perhaps your happiness islands make up 20 percent of your time, so how can you increase that to 40, 60, or 80 percent?
If 80 percent of your time leads to only 20 percent of your happiness, then which activities can you cut to free up your time for things that make you happy? There are manyactivities that we partake in that don’t make us happy. For example, surveys of people watching television reveal that very few people are happy after watching hours of TV. In reality, they feel mildly depressed. Of course, if television makes you happy, then keep watching. If it doesn’t, then stop!
Next, you need to identify your achievement islands, these are the times when you are the most creative or productive. Identify the times in the past week in which you were the most productive, or when you achieved more in just a few minutes and added value to yourself or others. Perhaps you are most productive when doing a particular activity, or when you are working with a specific person, or even at a specific time or place.
Once you’ve identified these islands, you can begin to focus on what makes you happy and how you can be productive. For example, Richard Adams, a bureaucrat in the British civil service, found he was happiest when telling stories to his daughters. Therefore, he began to write down these stories during his free time. These stories eventually became best-selling books, all because he decided to focus his time on his happiness and achievement islands! At the end of the day, everyone has the same amount of hours in the day, so start using it wisely and be as productive and happy as possible.
Chapter 4: The 80/20 Principle for Money
When it comes to money, 20 percent of the world’s population owns 80 percent of the world’s money. Why is that? The magic of compound interest, of course! Even Albert Einstein knew the power of compound interest, calling it “the greatest force in the world.” The wealthiest people in the world use the 80/20 principle to earn their fortunes by simply investing their money and letting compound interest do the rest. Even a small amount of money can produce unbelievable returns.
Today, earning money has become a trap. Many of us become so busy earning money that we forget to pause and enjoy the fruits of our labor. Therefore, it’s time to take a page from the wealthy and learn how to use the 80/20 principle with your finances. First, what’s your destination when it comes to money? Here’s the time to get specific, don’t just simply say you want to be free of money worries, instead define what that means to you. Does that mean you have enough to live on for six months, a year or more? Do you want enough money to buy your dream home? Become a millionaire? The destination is up to you.
Next, you’ll need to find your financial route. It's likely that your route will involve saving and investing. Of course, if you want to invest, then you need to have some money in your savings first. Some people may think saving is impossible, but it’s not! Consider having 10 percent of your income automatically transferred into a savings account before you even have a chance to spend it. Remember, the earlier you start, the longer the time period you’re allowing for compound interest to work its magic.
Let’s take a look at Steve and Helen who used the 80/20 principle to buy a $60,000 apartment. Together, their annual income was $78,000 and they lived paycheck to paycheck, making it seemingly impossible to save money. Instead, they automatically transferred 10 percent of their paychecks into a savings account. Steve and Helen set a destination, found aroute, and took action. In the end, they reached their goal and after six years, the couple saved $66,000. Not only were they able to buy the apartment, but they were also able to fix some repairs.
Chapter 5: The 80/20 Principle for Relationships
Think about the relationships in your life. In what area are they thriving? More importantly, how could they improve? In today’s modern world, we find it increasingly difficult to build strong relationships. We are too busy to give the time and effort that relationships need to be successful, families are even outsourcing activities to others that used to be a basic part of the family relationship. We are getting more babysitters, picking up take-out instead of cooking, hiring maids instead of cleaning, and putting our elderly parents into homes. Luckily, the 80/20 principle can help you in your personal relationships too.
80 percent of our relationship satisfaction is generated by 20 percent or fewer of our relationships. In other words, less than 2o percent of your friends will contribute to 80 percent of the meaning and value that you derive from friendships. Therefore, we need to concentrate on the few relationships that matter to us, particularly those with our romantic partners. In fact, romantic relationships are proven to be the most important ones in our lives. One study showed that people who scored in the top percentile for happiness were those involved in a romantic relationship. While 40 percent of married Americans say they are extremely happy, only 23 percent of unmarried Americans can say the same.
Of course, marriage doesn’t automatically mean happiness. You must first have a strong relationship that fosters and supports your happiness. This is when you should focus on your 80/20 destination. What do you want from your personal relationships? What values are important to you? Once you decide your destination, you can work with your partner to find a route that works.
When it comes to deciding your route, think about how you can build a better relationship for less time and less effort. For example, when Steve met Helen, he sought to make her happy and realized that she wanted him to simply be home on time and be a source of support. Of course, she also loved surprises. By focusing on these routes, Steve identified three important things he could do to take action to make Helen happy. Therefore, it’s important to sit down with your partner and communicate a productive way to build a strong foundation for your relationship.
Chapter 6: The 80/20 Principle and the Simple Life
In today’s modern world, we have a skewed sense of happiness. Many people think they need wealth to buy the things they assume will bring them happiness. Advertising agencies, for instance, focus on keeping people addicted to work so they can continue to buy the never-ending range of new and better products. To stop this mode of thinking, take a moment to stop and think. What do you truly need to make you happy?
It’s probably much less than you think. For instance, the Greek philosopher, Epicurus, claimed the basic components for a good life are simply food, shelter, clothes, friends, freedom,and thought. That’s it! In other words, less is more, just like the 80/20 principle. Epicurus practiced this philosophy by living a life of simplicity, living with seven friends in a commune. They relied on the land for food and they didn’t worry about accumulating wealth for the sake of buying material items. Instead, they spent their time writing books and sharing ideas. Perhaps it’s time to apply Epicurus’ philosophy to your own life.
Once again, focus on your 80/20 destination and think about what a simple and good life means to you. Begin by writing a description of your ideal life. Perhaps think about the items that you have that provide you with happiness. What do you genuinely need? How often do you use the items you currently own? Why are you working so hard to buy more things you’ll never get around to using? Next, find your routes. Find options that are both simpler and better. Eliminate the things in your life that cause worry and add little value. Perhaps think about how you can reduce the clutter in your life or how you can find happiness in simple things. Finally, it’s time to take action. Decide on three immediate steps you can take to move towards your destination and ideal life.
Let’s take a look at Ann, a successful account executive in advertising. Her job paid her well, but she was always exhausted and stressed. Tired of being unhappy, Ann quit her job and moved from a huge apartment into a one-room studio. While her parents didn’t support her decision to quit her high-paying, secure job for a life of painting, Ann ignored the critics and did what she loved. Eventually, she began to sell her paintings for good money. At the end of the day, Ann knew her destination and took the necessary steps to get there. She opted for a simpler life and ended up finding happiness and success.
Chapter 7: Final Summary
The 80/20 principle says that 80 percent of what we want comes from only 20 percent of what we do. Unfortunately, many of us believe the opposite is true. We believe that if we work hard enough, we’ll eventually find happiness. But happiness shouldn’t come from the amount of money we have or the things that we buy. Instead, happiness comes from investing our time in what makes us happy. To truly find happiness, we can follow the 80/20 principle’s three steps: determine a destination, find the best routes, and take action. We can apply these steps in every area of our lives, including our finances and personal relationships. Once you make a plan and start putting the 80/20 principle in action, you’ll begin finding success and happiness simply by doing less.