The 80/20 Rule

Leander, Texas

August 29, 2026

9:09 am

Dear Leah, Jack & Adam—

I’ve had the 80/20 Rule on my mind lately.

Many people have probably heard of it. At your current age, perhaps not.

The basic idea is that roughly 80% of results often come from about 20% of the causes.

It’s also known as the Pareto Principle, named after Vilfredo Pareto, an Italian economist who noticed in the late 1800s that a relatively small percentage of the population owned most of the land in Italy.

Pareto himself didn’t turn this observation into the 80/20 Rule as we know it today.

That came decades later, largely through the work of Joseph M. Juran, an American engineer and management consultant who became one of the pioneers of quality management.

Juran noticed that a relatively small number of causes were often responsible for a large percentage of problems. He called these the “vital few” and distinguished them from the “trivial many.” He connected the idea to Pareto’s earlier observations and helped establish what became known as the Pareto Principle.

Years later, Richard Koch took the idea well beyond manufacturing and quality control. In his 1997 book, The 80/20 Principle, he explored how this same imbalance seems to appear in business, investing, careers, relationships, happiness and everyday life.

So, in very simplified terms:

Pareto observed it. Juran developed it. Koch expanded it.

And over the years, people have found examples of this kind of imbalance almost everywhere.

A small percentage of customers can produce most of a company’s revenue.

A small percentage of products can generate most of the profits.

A small percentage of problems can create most of the headaches.

The numbers aren’t always exactly 80 and 20.

Sometimes it might be 70/30.

Sometimes 90/10.

That’s not really the point.

The point is:

Results are rarely distributed evenly.

One of the ideas I took from Koch’s book—confirmed by real life—is that we tend to assume effort and results are roughly proportional.

Work twice as hard. Get twice the results.

Spend twice as much time. Accomplish twice as much.

But life doesn’t necessarily work that way.

Some of the things we do produce enormous results.

Others produce almost nothing.

Once you start looking for this imbalance, you see it everywhere.

I see it in my investment trading.

A relatively small percentage of my trades produce most of my profits.

I see it in my closet.

I probably wear 20% of the clothes I own 80% of the time.

Which raises an obvious question about why I still own the other 80%.

I certainly saw it throughout my years in the restaurant business.

When I was a vice president responsible for 100+ restaurants, a relatively small percentage of those restaurants produced a huge percentage of our total profits.

Some restaurants were absolute workhorses.

Others seemed to exist primarily to create meetings.

But here’s something I wish I had thought about more at the time.

Instead of simply asking:

How do we make all the restaurants perform better?

Perhaps an even better question was:

What are our best restaurants doing differently, and how do we do more of that?

That’s an important distinction.

Our natural tendency when we want better results is to add something.

Work harder.

Put in more hours.

Have another meeting.

Make another trade.

Start another project.

Create another rule.

But perhaps the better answer is sometimes to stop and figure out what’s already working exceptionally well.

Then do more of it.

And less of everything else.

That sounds simple.

It isn’t.

Because identifying the 20% is only half of the 80/20 Rule.

The much harder part is being willing to spend less time on the other 80%.

Most of us aren’t very good at that.

We’re busy.

And being busy feels productive.

We answer emails that could wait.

We worry about things we can’t control.

We spend an hour trying to save ten dollars and ten minutes making a decision worth thousands.

We keep possessions we don’t use.

We maintain habits that stopped being useful years ago.

We become extremely efficient at doing things that probably shouldn’t be done at all.

Meanwhile, some of the most important things in our lives get whatever time happens to be left.

And that’s where I think the 80/20 Rule becomes much more interesting.

Because I’m less interested in applying it to business these days.

I’m interested in applying it to life.

What if we occasionally conducted an 80/20 audit of our lives?

What 20% of what I do produces most of my results?

What 20% produces most of my happiness?

Which 20% of my relationships produce most of my happiness and best memories?

What 20% of what I’ve learned has proven most useful?

And we shouldn’t just look for the good 20%.

The principle can work against us too.

What 20% of my activities produces most of my frustration?

What 20% of the things I worry about create most of my anxiety?

What 20% of my habits wastes most of my time?

A handful of bad habits can create most of our problems.

A few bad decisions can undo years of good ones.

And sometimes removing one thing from our lives can accomplish more than adding ten new things.

Maybe the 80/20 Rule isn’t only about doing more of what works.

Sometimes it’s about identifying the few things that aren’t working—and having the courage to stop doing them.

There’s another fascinating extension of the idea.

If 20% produces 80% of the results, what happens if you apply the 80/20 Rule to that 20%?

Twenty percent of 20% is 4%.

And 80% of 80% is 64%.

In theory, that means something like 4% of what we do could produce 64% of our results.

I’m certainly not suggesting life follows that equation precisely.

It doesn’t.

But think about the implication.

There may be a very small number of things in our lives that matter enormously.

And I think that’s especially important when it comes to decisions.

We make thousands of decisions.

Most don’t matter very much.

What you eat for lunch next Tuesday probably isn’t going to determine the direction of your life.

But some decisions absolutely will.

Who you marry.

Who you choose as friends.

What kind of work you pursue.

Whether you save and invest.

Whether you take care of your health.

Whether you develop discipline.

Whether you keep your word.

Whether you get back up after something goes wrong.

Whether you spend your time with people who make your life better—or people who constantly make it worse.

Those decisions may represent a tiny percentage of all the decisions you make during your lifetime.

But they can determine an enormous percentage of how your life turns out.

Which makes me wonder how often we do exactly the opposite of what we should.

We give enormous amounts of thought and attention to hundreds of relatively meaningless decisions…

and sometimes surprisingly little thought to the handful that can change everything.

And Leah, Jack and Adam, this may be particularly important for you.

Because you’re still near the beginning.

If you can identify early in life the relatively small number of habits, relationships and decisions that have an outsized impact on where your life goes, you’ll have decades to benefit from them.

Choose your friends carefully.

Take care of your health.

Learn how to handle money.

Keep learning.

Keep your word.

Treat people well.

Don’t be afraid to fail.

And when you do fail—and you will—get back up.

You don’t have to get every decision right.

Nobody does.

Just try especially hard to get the important ones right.

But there’s something else about the 80/20 Rule that I think is very important.

Not everything valuable needs to be productive.

If we’re not careful, an idea like 80/20 can turn life into one giant efficiency exercise.

That’s not what I’m suggesting.

Spending an afternoon with a grandchild may accomplish absolutely nothing that can be measured.

Neither may having dinner with someone you love.

Playing golf with friends.

Reading a book simply because you’re curious.

Sitting around telling stories and laughing.

Taking a trip.

Having a two-hour conversation that wasn’t on anyone’s schedule.

Those things might look completely unproductive.

But they could very well belong in the most important 20% of your life.

So perhaps the question isn’t:

What 20% makes me the most productive?

Maybe it’s:

What 20% produces the results I actually care about?

That’s a very different question.

When I look back over my life, the moments I value most probably occupy a surprisingly small percentage of all the hours I’ve lived.

A family trip.

A dinner with people I love.

A great conversation.

My annual trip to Bandon Dunes with my brother Paul.

Watching one of my children or grandchildren accomplish something.

Laughing until it hurts.

Doing something difficult and discovering I could actually do it.

Some completely ordinary day that didn’t seem important at the time but somehow became unforgettable.

Those moments represent far less than 20% of my life.

Yet they may account for 80% of what made it worthwhile.

Which brings me to what I think is the real lesson of the 80/20 Rule.

It’s not simply about becoming more efficient.

It’s not about cramming more things into our days.

And it certainly isn’t about turning every minute of our lives into something “productive.”

It’s about recognizing that a surprisingly small percentage of what we do, who we spend time with, what we think about and the decisions we make creates a disproportionately large percentage of the life we experience.

We spend far too much time trying to become more efficient at the 80%…

instead of figuring out how to spend more of our lives in the 20%.

So, here’s a question worth thinking about:

What is your 20%?

What small number of people, habits, activities and decisions create most of the happiness, progress, meaning and success in your life?

And then comes the much harder question:

If you know what your 20% is, why aren’t you spending more time on it?

Find your 20%.

Protect it.

Do more of it.

Then have the courage to do less of the rest.

I’m still working on that last part.

Although I may start by getting rid of 80% of the clothes in my closet.

Then again, I’ve been saying that for years.