Italian Land... And Your Wallet

We’re doubling down on Wednesdays 🚀 with the Midweek Money Minute. It’s a one-minute read on one topic each Wednesday. (have a topic you want covered? Just reply!)

Thanks a lot, Italy

In 1906, one Italian man made an interesting discovery that is still being used in Silicon Valley’s tech lexicon (“texicon”?) today: The 80/20 Rule, aka “The Pareto Principle”.

Italian economist Vilfredo Pareto made the observation that 80% of the land in Italy at the time was owned by 20% of the population. In the early 20th century (pre Industrial Revolution), land = wealth.

These days in the first world – despite the democratization of everything – the top 10% own 70%… but that’s a topic for another day.

How the 80/20 Rule gets commonly used today is as an exercise to determine what 20% of effort (input) is yielding 80% of results (output).

The phrase “80/20” has been appropriated by everyone from backyard gardeners to Finance Bro’s looking for the next big win.

Back to your wallet…

When you think about your inputs, such as diet, income, exercise, and wealth building… what is the 20% you should be focusing on to get the biggest yield?

For example…

1. Diet: Stop putting sugar in your coffee, it’s the only empty carb left in your daily diet. That will yield better results than a gallon of kale smoothies.

2. Income: Focus on the most impactful (or the most visibly impactful) part of your job, so that you can get enough attention to get a raise.

3. Exercise: Work on the part of your body that you crave results in first, which gives the man in the mirror the motivation to make the rest awesome.

4. Wealth Building: Be real about where your gains are happening, and double down in that area (even if it’s boring).

Identify your 20%, and then go all in on that.

Onward and upward,
Simon Trask

(Small business owner, advisor, and advocate)

P.S. – if you are a small business owner, you will get a ton of value out of the Profit Hiker newsletter. It’s one free gold nugget sent (from Simon) three times a week to help you elevate your business.