The famous Pareto Principle or 80/20 rule dictates that 80% of our results come from 20% of our efforts. It essentially means that by doing the 20% most important things well we can reap 80% of the rewards.
Even though a lot of us are “perfectionists”, don’t look down on 80%.
It’s certainly a very good pass (most likely an A+) in a life-changing exam. 80% of £1,000,000 is £800,000 which is probably enough to provide passive income that replaces our job. If you’re looking to lose 10KG, shaving 8KG is already a ridiculously impressive achievement and will make a noticeable difference to your friends and family.
Despite mainstream media brainwashing us to believe that success is one huge event comparable to making millions of pounds on one (lucky) stock trade or only showing the 2 minute training sequence in movies such as Rocky, in real life success is a slow grind over numerous months and years.
There are many factors to consider in success in each area of our lives and the overwhelming nature can sometimes lead to analysis paralysis but if you focus on just one thing, you can take full advantage of the Pareto Principle.
The one thing you should focus on if you’re trying to build wealth is to minimise your accommodation expenses.
If you start out in your career making £1,000 a month, make a conscious decision to live cheaply by staying in accommodation provided by your company or staying at home with your parents whilst paying nominal rent. During my core medical training in Wakefield I made the mistake of spending £700 per month on rent. Add on fixed monthly bills and council tax and essentially half of my salary was taken away from me before I could even buy food.
If you have that option, paying a few hundred quid for accommodation that includes bills and council tax is a very wise choice. If you’re fortunate enough to own a flat, rent a room out using various websites like Gumtree. Remember that £7,500 of this is tax free every year in the UK, as long as you’re a resident landlord.
I’m someone who highly values my personal time and space almost above all but for the first time in my life I’m sharing a hospital accommodation flat with a complete stranger for 6 weeks. It’s only costing me £484 a month to stay here compared to the £1,000+ I was paying in Wakefield.
If you can save £500 a month on the roof over your head, in as little as three years you’ll have enough (almost £20,000) deposit for a modest flat, assuming you don’t make any other “sacrifices” and don’t save the remainder of your salary.
For most of us, reducing our accommodation expenses and avoiding lifestyle inflation is the 80/20 rule in wealth. There’s little point earning £2,000 a month working 50 hours a week if we spend £1,950.
Health is a very complex topic but if there was one thing to focus on it would be calories in calories out. Certainly not all calories are equal but if someone is overweight or obese, by far the most efficient way to improve their health is by losing weight.
Even as a doctor and “torch-bearer” for health, I’ll admit that this is much easier said than done. Dieting is extremely difficult but without health, there is no life or wealth.
Here I’d advise a trial of intermittent fasting, where your first meal of the day is delayed until a time of your choosing, say lunchtime. Assuming you go to bed at 2300 and lunchtime is 1330, you’re effectively fasting for 14.5 hours. By shrinking the window in which you’re “allowed” to eat, you’re reducing the number of calories you can possibly consume within those 9.5 hours.
Some people take intermittent fasting one step further by delaying their “break-fast” meal until dinner time but we don’t have to, unless we want to. For example, eating one huge meal and a few snacks totalling 2,000 calories between 1800 – 2200 each day. 2,000 calories isn’t very much for most men but consuming that number within 4 hours is a lot and the idea is to still lose weight.
Appetite suppressors such as tonic water and black coffee are also used during the “fasting period”.
Skipping breakfast was strange at first as we’re taught that this is the most important meal of the day. Breakfast like a king, lunch like a prince and dinner like a pauper and all that. But if you think back to our ancestors who essentially had to hunt or forage for their next meals constantly, breakfast was never a certainty. It’s bizarre to have three set meals per day. Why not two or five? Nowadays I just have a large coffee for breakfast and don’t feel hungry (if I’m busy) until 1300 – 1400.
Consuming fewer number of calories than you need is the 80/20 rule in weight loss.
The one thing in starting and sustaining fulfilling relationships is that you must provide value to the other person. What we must avoid is constantly taking value from others and not giving back.
How did that person become your mentor? Because he provides value to you through teaching you how to improve your life. Why is that person your girlfriend? Because she provides value to you through good company, social proof, great sex etc.
To create “meaningful” relationships you need to provide value to other people. The complicated aspect is that everyone’s values are different. For example, I value femininity and culinary skills over career driven women but some men may find the opposite more attractive.
The One Quality
Pulling everything together, the one quality you need to succeed in life is persistence.
Persistently minimise your expenses and live as cheaply as possible, regardless of whether you’re earning £1,000 or £10,000 per month. Note that this doesn’t mean compromising on things that are important to us. For example, I’ve always used an iPad instead of any other tablet on the market and I always eat the best foods I can afford because I appreciate quality over quantity. I also believe in treating our bodies like a temple (as much as possible).
However, living too well is also a risk in this day and age – although I can afford to live in a place that costs £1,500 a month, will it make me happy? When we’re young, I think it’s worth making life a little more difficult so that we appreciate things when we’re older.
Persistently consume fewer or a maintenance number of calories you burn and aim for quality foods over quantity. Persistently provide value to others.
By focusing only on those three aspects and committing yourself persistently, you’ll have won 80% of the war.
P.S. I learned everything I know about life and finance from this book, this book and that one, amongst many others. For a more extensive list, don’t hesitate to drop me a line at firstname.lastname@example.org. If you prefer learning through listening use this link to earn a free audiobook of your choice by signing up to their 30-day free trial. Simply cancel with the click of a button if you decide later on that the service isn’t for you, no questions asked.