20% of your activities/time in a day accounts for 80% of your desired output.

Unfortunately, there’s also a downside to this… then 80% of your activities/time only accounts for 20% of your output.

Why is this important?

Let’s do a simple calculation:

Imagine that everything you do in a day is equally important.

Suppose you work 40 hours a week to earn 50,000 euros a year. How many hours would you need to work to earn 100,000 euros? 80? And 200,000 euros? 160 hours?

You see that there quickly comes a limit to what you can earn if you assume that each of the things you do in a day is equally important.

Another calculation example:

Calculate with 80/20

In 40 hours per week, you earn 50,000 euros. Assuming 48 working weeks, that’s 1920 hours per year, so an hourly wage of 26 euros.

But as we’ve seen, not everything you do in a day is equally important. That 26 euros per hour is an average (and 80/20 dislikes averages), but you also do tasks that earn you only 10 euros or less. And thus, also tasks that yield much more than 26 euros per hour.

In 20% of that time, you earn 80% of the money.

20% of 40 hours is 8 hours. 80% of the money is 40,000 euros.

So, you can choose to work just 8 hours a week and be satisfied with 40,000 euros. You have seas of time left. This is something that really appeals to me. You can earn more, but choose free time and balance.

How can you earn more?

You could also choose to do more of your ‘20% tasks’.

Imagine you make your regular 40-hour work week, but you fill it with ‘20% work/the important things’.

That’s 5 x 40,000 euros: 200,000 euros.

With the same input in terms of time volume, you have a four times higher output (money).

If you think all the things you do are equally important, then you would need to work 160 hours per week (and only sleep 8 hours in a week: impossible to sustain) for that.

It gets even crazier!

Within the 20% tasks, the most important tasks you have… there’s another 80/20. Of the most important tasks, some are just a little more important than others.

If you consider the 80/20 of the 80/20, or 80/20 squared, the calculations get even crazier.

20% of 20% (that’s 4%) of your time, yields 80% of 80% (that’s 64%) of your money.

In our calculation example:

4% of 40 hours: 1.6 hours yields 32,000 euros.

If you go full-time with these tasks, you end up with an output of 800,000 euros (That’s 417 euros per hour, by the way! and 16 times as much output). And that’s not even considering ‘overtime’, that’s just 40 hours a week.

But you could also work 20 hours a week for a measly 400,000 euros.

But what do you do with the work that yields less money? That also needs to be done, right? Fortunately, there are plenty of people who are willing to take those tasks off your hands for a much lower hourly wage.

Applying this principle has given me a lot of free time. Will you do the same?