The 80/20 Principle


ISBN: 9780385491747

Author: Richard Koch

Genre:  Business & Economics

Release Date: 1999

Pages: 277

About the Author: Richard Koch is an entrepreneur, author, and speaker who has accumulated over $300 million from his business and investing ventures. In his book, The 80/20 Principle, he explains why he believes that the Pareto principle, also known as the 80/20 rule, is the secret to both professional and personal success.

Our Favorite Quote: “A good exercise is to work out the most unconventional or eccentric ways you can spend your time. How far can you deviate from the norm without being thrown out of your world?” 

Mighty Tips based on the 80/20 Principle

For Maximizing Happiness:

Tip 1: Identify your “happiness islands” and “happiness desserts”

Tip 2: Choose your obligations wisely

Tip 3: Reallocate your time in order to devote the majority of it to the handful of people in your life that matter the most. Additionally, choose your life partner wisely

Tip 4: Abandon comparison and instead measure your life based on your happiness

Tip 5: If forced to choose, opt for happiness over achievement

Tip 6: Be flexible

Tip 7: Workout daily

Tip 8: Avoid your “snake pits”

For Maximizing Career Success:

Tip 1: Figure out what “you’re programmed to do best”

Tip 2: Embody productive inertia in order to maximize the kind of creativity that leads to greater efficiency

Tip 3: Be intelligently lazy

Tip 4: Give up guilt

Tip 5: Become self employed as early in life as possible

Tip 6: Forget about time management

Tip 7: Learn from the best



According to Koch, we can achieve more success and happiness in life with less time and energy by strategically leveraging the 80/20 rule. Doing so isn’t always easy, though, because it can require us to buck convention and societal norms, which dictate that working harder and longer are necessary to get results. Koch calls this cultural norm “the rat race” and believes that it stems from the Protestant work ethic that’s deeply ingrained in our society’s history. Instead of getting caught in this rat race, it’s important that we devote our time and attention to the things and people in our lives that contribute most heavily to the results we desire, while doing less of everything else.

What is the 80/20 Principle?


The 80/20 principle, also known as the Pareto principle and the law of the vital few, is a theory that states that 80% of the results we obtain arise from 20% of the causes in most situations. This trend has been observed in many fields- including business, economics, and computer science. Here are a few examples of the 80/20 rule in action:


For a large majority of companies, 80% of revenue comes from 20% of customers.

Economic studies show that most often 80% of a country’s wealth is accumulated by 20% of its population.

Microsoft and other tech companies have found that 80% of reported software crashes are caused by 20% of code errors. Many of these companies now use this observation to strategically optimize their software’s performance.

In most countries, 80% of health care costs are incurred by 20% of patients.


Why does this principle apply to so many situations across such a wide range of industries and circumstances? It’s because it’s based on a powerful fact: all causes and effects don’t carry equal weight in real life circumstances. Usually, some causes are far more powerful than others. Here’s a simplified analogy:

A dog walker is getting dragged down the street by two dogs: a Great Dane and a Chihuahua. Both dogs are contributing to the dog walker’s dilemma, but they aren’t adding to his problem equally. If you run over and take the Chihuahua away from him, the poor dog walker might not even notice the small dog is missing; he’d still be getting dragged down the street. Conversely, if you grab the Great Dane’a leash, the dog walker might be able to wrangle the canines back under control and catch his breath.

As this analogy shows, not all causes are created equal. Many of us go through life without acknowledging the differences between the Great Danes and Chihuahuas in our lives; we often treat all of our obligations, relationships, work decisions, etc of equal importance. Koch’s takes the 80/20 principle and explains how it can be used as a life philosophy in order to maximize happiness and success.


Tips for Maximizing Happiness


Koch makes a powerful distinction between happiness and money: happiness isn’t like money; we can’t save it up for the future. We can only enjoy it in the present. Therefore, Koch believes in a hedonistic approach to life, where we spend as much time as possible doing the things that bring us happiness.

We live in a culture that has a stigma against hedonism, so this can be a difficult idea for readers to consider. Koch does a good job of addressing and combating these cultural stigmas. Check out his book to learn more about his argument in support of a pleasure-centered life.


Tip 1: Identify your “happiness islands” and “happiness desserts”


Identify the 20% of things in your life that provide 80% of your happiness. Koch’s refers to these as “happiness islands”. Everyone’s happiness islands are unique, so it’s important to take time to really think about the things that make you happiest and the common themes underlying your daily moments of satisfaction. Once you identify these happiness islands, change your life to maximize the time you spend on these “islands” every day. Next, make a list of your “happiness desserts”- the things in your daily life that make you miserable. Koch urges people to abandon their happiness desserts forever. His approach may sound unrealistic to some readers, but throughout his book he explains why he thinks it’s both necessary and possible.


Tip 2: Choose your obligations wisely


Stop doing things for other’s that you don’t want to.


Tip 3: Reallocate your time in order to devote the majority of it to the handful of people in your life that matter the most. Additionally, choose your life partner wisely


Stop spending time on low-yield relationships and instead focus 80% of your time and energy on the 20% of relationships that lead to the greatest amount of your growth and happiness. Koch points out that many of our most valuable relationships suffer because we spread ourselves too thin. Relationships are like gardens; they require active tilling. The number of deep connections we can grow in life is limited. Make the depth and quality of your relationships your lifelong goal, not the number of them. 

Additionally, remember that your life partner has the power to dramatically influence your growth, success, and happiness. Make sure you’re with the right match. Koch highlights some warning signs that may mean you need to reassess your relationship. Most of these signs center around you and your partner’s communication style and whether or not you each fall into what psychologists call the “stable relationship type” or the “anxious relationship type”. You can learn more about these warning signs in his book.


Tip 4: Abandon comparison and instead measure your life based on your happiness


We live in a culture that’s driven by comparison. We are constantly comparing our appearance, wealth, success, skills, etc to our friends and neighbors, which makes us miserable. The key to finding happiness is to change our metric of comparison. We should judge ourselves based on how happy we are. Koch also suggests that we should consider the benefits of living a minimalist lifestyle, which has been linked to mental wellness and greater life satisfaction.


Tip 5: If forced to choose, opt for happiness over achievement


Our society is excessively achievement focused, making this tip difficult to fathom. In his book, Koch explains why choosing happiness over achievement can be the best choice.


Tip 6: Be flexible


Koch quotes John Lennon saying, “Life is what happens when we’re off making other plans.” It’s vital for us to learn how to be flexible when faced with life’s unexpected curve balls. Not only will this allow us to relax into uncertainty, it will also help us to cultivate present moment mindfulness, which is linked to happiness and greater life satisfaction.


Tip 7: Exercise daily


Koch stresses the importance of working out daily in order to maximize performance, happiness, and health.


Tip 8: Avoid your “snake pits”


Koch asserts that we should work with our personalities and natural tendencies. If there are things that we don’t tolerate well (like a long commute by public transportation, or frequent travel for work) we’re better off eliminating these things from our lives instead of expending time and energy trying to tolerate things that aren’t amenable to our personalities. This is another way in which Koch’s suggestions challenge our cultural norms, which often laud self mastery, self sacrifice, and a “get over it” attitude when we’re facing “snack pits”.


Tips For Maximizing Career Success


Professional success is within reach for everyone who is brave enough to break free from the shackles of societal expectations and make bold decisions.


Tip 1: Figure out what “you’re programmed to do best”


Koch’s says that everyone has the potential to achieve professional success. The key is to determine what your unique gift is, create a niche that aligns with these gifts, and become an expert. He again shoots down convention by emphasizing that we should focus on building a single skill, instead of trying to be experts at many things. He also stresses the importance of enthusiasm: our niche must be something we feel passionate about.


Tip 2: Embody productive inertia in order to maximize the kind of creativity that leads to greater efficiency


Koch asserts that success is achieved thanks to creativity because innovation is what leads to the discovery of more effective ways of doing things. He believes that creativity is fostered best by taking quiet time to think, relax, and meditate.


Tip 3: Be intelligently lazy


Since creative is cultivated during quiet time, we need to remove ourselves from the rat race in order to set aside time to do nothing. We can do this by being intelligently lazy. We should spend our time on the 20% of things that lead to 80% of our effectiveness and profits. Doing so will free up more time for the things that bring us happiness and spark innovation, without compromising our performance.


Tip 4: Give up guilt


The only way we can be intelligently lazy is if we stop living according to society’s expectations. Our culture vilifies “laziness”, and often doesn’t differentiate between unproductive slacking and intelligent laziness. We can’t feel guilty about strategically setting aside time to do nothing in order to breed productive creativity. 


Tip 5: Become self employed as early in life as possible


Koch believes that self employment provides the greatest opportunity for career success and happiness for the majority of people. Self employment gives us the ability to leverage our personal gifts, focus on our niche, and channel our passions. It also gives us the ability to control our time. It can maximize our paycheck too, because self employment “stops us from making other people rich”.


Tip 6: Forget about traditional time management


Koch discusses why our culture’s approach to time management is ineffective. He says that traditional approaches to time management focus on “speeding up”, in order to fit more things into less time. Koch says this is the wrong approach because it goes against the 80/20 principle. Instead of trying to do more in less time, we should try to strip our schedules of low yield activities. Therefore, we should focus more on the reallocation of our time, and less on getting more done during the day.


Tip 7: Learn from the best


Learning from other experts in your field can help ensure you aren’t wasting needless time or energy. Watch and mimic what they do. They’re successful for a reason.


Why We Recommend This Book


We at Modern Might are big believers in the power of the 80/20 principle and we think Koch does a fantastic job of explaining how many of our traditional approaches to life can undermine our success and happiness and how we can live life more fully using the 80/20 principle. Life is about maximizing flow, creativity, pleasure, growth, success and connection in the present. Thanks to the 80/20 principle- small, deliberate, and efficient choices have the power to compound into magical results.


How the 80/20 Principle Applies to Wellness


Although Koch only briefly touches upon exercise and health, we believe his principle strongly applies to these areas of life.

Effective nutrition should be easy, delicious, and maximize the benefits we get from our calories. As the 80/20 principle suggests, eating for results requires that we take a strategic approach to our nutrition habits. You can learn more about our 80/20 approach to nutrition on our sister site, Paleo for the Modern Caveman, which specializes in nutrition for busy people who crave success.

An effective approach to fitness is about finding ways to maximize our time in the gym and get results as swiftly as possible. Koch stresses the importance of exercising daily. The best way we can maximize these daily workouts is by following a personalized, scientific program that’s directed by a professional and tailored to our needs. This ensures we’re leveraging the knowledge of an expert in order to save time and energy and get the results we want.

It’s also important to prioritize a holistic approach to wellness. As Koch attests, there’s more to wellness than just daily workouts. Meditation and the cultivation of deep interpersonal relationships is also vital. We at Modern Might believe that our interpersonal relationships, our mental regeneration, and our spiritual practices are all major parts of our wellness and should be given as much attention as exercise and nutrition. 




Leveraging the 80/20 principle in both our personal and professional lives can help us unlock greater success and happiness, so that we can live our best lives in the present. If you need help using the 80/20 principle to maximize your health and wellness, contact us for a complimentary consultation today.


Our Favorite Quotes:


“80% of the results come from 20% of the causes. A few things are important; most are not.”

“The way to create something great is to create something simple.”

“Not only is happiness not money, it is not even like money.”

“Hard work leads to low returns. Insight and doing what we want lead to high returns.”

“Instead of expending time to train yourself not to be afraid of snakes, avoid them altogether.”

“Few people take objectives really seriously. They put average effort into too many things, rather than superior thought and effort into a few important things. People who achieve the most are selective as well as determined.”

“Strive for excellence in few things, rather than good performance in many.”

“It is not shortage of time that should worry us, but the tendency for the majority of time to be spent in low-quality ways.”

“The few things that work fantastically well should be identified, cultivated, nurtured, and multiplied.”

“Our current use of time is not rational. There is therefore no point in seeking marginal improvements in how we spend our time. We need to go back to the drawing board and overturn all our assumptions about time.”

“Make the choice that you want to be happy. You owe it to yourself and you owe it to other people too.”