Quick Definition

The 80-20 Rule, also known as the Pareto Principle, states that roughly 80% of effects come from 20% of causes in many situations.

Examples

• 1In investing, 20% of stocks in a portfolio might generate 80% of the returns.
• 2In business, 20% of customers might account for 80% of total sales.
• 3In personal productivity, 20% of tasks might produce 80% of the results.
• 4In cost management, 20% of expenses could be responsible for 80% of a company's total costs.

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