The 80-20 principle

Published:  09/07/2023

When something is the result of several inputs or factors, it is rare that all the inputs matter equally. Typically, a small number of inputs matters more than all the rest combined. There is a shorthand way to refer to this phenomenon. It is called “the 80-20 principle.” The idea behind this principle is that 80% of your results will come from 20% of your efforts. The percentages aren’t meant to be precise. The idea is that results from your efforts typically follow a power-law distribution. It could be that 90% of your results come from just 10% of your efforts. No matter the specific breakdown, it is often the case that some things matter much more than others when it comes to getting a desired outcome.

For example, if you are trying to control your weight, the two typical approaches are diet and exercise. Diet has much more to do with your weight than exercise. You could spend hours running to burn calories, which would take a huge amount of effort (painful effort that would likely not be sustainable), but it would be very easy to erase all the calorie burning benefits of all that running by just eating a few slices of pizza later in the day. Because it is so difficult to burn calories through exercise, adjusting your diet will produce the largest change in your weight.

The same 80-20 principle applies to exercise benefits. What will make you look best and help you to live the longest: weightlifting or cardio? You will likely find weightlifting accounts for “80%” of your results (especially if you can get your heart rate up while lifting weights). Steady state cardio is probably less impactful. The level of impact depends on the metric you are using, but when it comes to quality of life, some aspects of longevity, and even your appearance, weight training wins. I am old enough to have the benefit of comparing old high school friends that lift weights to those that focus on cardio (marathoners and the 5k-10k crowd). Weightlifters typically look years younger than their cardio only counterparts. Cardio addicts not only look older, but they often have minimal muscle on their frame. Throughout life you will routinely need to lift heaving things (like yourself, luggage, groceries, …). Weight training helps with all that lifting. Among its many benefits, weightlifting makes future falls less likely too. Falling when you’re older can shorten your lifespan, so weight training for fitness is an excellent example of an activity that produces outsized returns for a relatively small investment of time. (Cardio fitness is very important for overall health, so I don't want to minimize its importance. It is just that weight training is comparably less demanding on your time and energy.) 

Even weightlifting likely follows an 80-20 rule. Lifting to near failure (either heavy weight with few reps or lighter weight with many reps) produces “80%” of your results. Likewise for cardio. There are two needed forms of cardio for optimal health: short, intense bursts of cardio (like sprints) and steady state, low-intensity cardio (like walking). The sprints produce an outsized benefit in a small amount of time compared to the amount of time needed for long walks.

Building wealth follows an 80-20 type of distribution. Your consistent habit of savings matters far more than how much money you earn. Establish a long-term habit of saving a reasonable portion of your earnings, and you will become rich. Eighty percent of the differences between two randomly chosen peoples’ wealth at retirement can be explained by differences in their savings habits, not by differences in their salaries.      

So, the 80-20 principle is a useful idea to keep in mind when deciding what to do to get maximum benefits with the least possible effort. It’s great for things you don’t want to devote yourself to fully. For example, you might want to be fit, healthy, and to look your best, but you do not want to devote your whole life to fitness. In that case, try to 80-20 it. Try to identify the best ways to maximize your results with the smallest inputs of time and effort. You might want to become rich but don’t want to sacrifice too many of today’s dollars for your future self. You can 80-20 it by starting to invest early. The length of time money is invested matters greatly, so you can invest a smaller amount of money each year if you start that savings/investing habit sooner than later. 

Be on the lookout for ways (or hacks) to get outsized returns for your efforts!