A common principle cited in self-help books is the Pareto principle: the idea that 80 percent of results comes from just 20 percent of causes. Living the 80/20 Way by Richard Koch sets out as its premise that we can use this understanding to improve every aspect of our lives.
Who Is This?
Richard Koch is a former management consultant turned self-help-book author and ‘private equity investor’ per his Wikipedia page (which, side note, I am 95% certain he wrote himself).
What’s the Big Idea?
Quick recap: the Pareto Principle or “80/20 rule” states that within any system, at least 80% of results will come from a small number of causes (20% or less). If you have 100 salespeople, 20 of them will make 80% of your sales. If you read 100 self-help books, 20 of them will make 80% of the difference in your life…
Koch uses this concept as the foundation for his advice. First, he recommends “finding the 80/20 way” to meet your goals. An 80/20 solution requires less time, effort or stress and gives you more of what you want. Koch contrasts this with the “more for more” approach he considers common in society today. For example, standard advice on how to make more money might be be to work harder, work longer hours, or even get a second job. Considering that goal with the 80/20 method in mind, you would take a very different approach. “Find something you’re great at and love to do and figure out a way to get paid for it” is, in Koch’s opinion, a classic application of the 80/20 method.
Koch’s second strategy for success is to invert your own personal 80% and 20%. Right now, Koch argues, you’re probably spending 20% of your time on important, quality activities and 80% on things that don’t really matter to you. You should eliminate those things you don’t care about and invest your time and energy into what makes you happiest or gives you the highest return on investment.
I’m glad that I read this book because the ideas are solid. I particularly like the idea of finding an 80/20 solution. It’s fresh – most self-help authors are fired up by the idea of working hard, harder, hardest and would never suggest finding an easier way – and it’s a useful framework for evaluating options and making a decision. Does this opportunity give me more of what I want, with less difficulty or less of what I don’t want?
Sadly, I like the ideas more than I like the actual book. The writing is weak, and the author has a habit of throwing in supposed examples of the 80/20 principle in action that don’t necessarily seem to apply or even make sense. There’s also some political stuff that you may, depending on your personal beliefs, find weird – he defends massive income inequality and more than once cites Ronald Reagan as a paragon to be emulated.
There’s also a cringeworthy bit where he lectures his personal assistant and his PA’s younger sister, a hairdresser making $16,000 a year, about how “anyone can be rich if they save!” By which he means, if you save 10% of your income a year starting when you are in your early 20s and invest it in the stock market and get a 10% return every year, you will have quite a bit of money to live on by the time you are ready to retire. Which is true. But did I mention that he was patronizingly lecturing them about saving their pennies while lounging in one of his three houses, a large estate which included a pool and a tennis court (yes, he specifically mentions both features)? I guarantee that he did not buy these houses by carefully saving 10% of a minimum wage income over several decades.
(Oh, and there’s a sadlarious bit, remembering that this book was published in 2004, where the author recommends investing in areas that are “guaranteed to increase in value” like…real estate. Apparently Koch released a revised edition of the book in 2011; I wonder if he removed that particular suggestion.)
So, the ideas? Excellent! The book? Privilege.txt.
Those who are unhappy with the ‘more with more’ mindset, those who struggle with balance or feel like they’re spending a lot of time doing things that aren’t very important to them. Also, frankly, people who are already pretty successful (especially career-wise and financially). Also probably better for those who lean conservative.
Ehhhhhh, I’m torn. I might recommend borrowing it? But be prepared to roll your eyes at a lot of the prose.
Living the 80/20 Way by Richard Koch – 198 pages -Published 2004 by Nicholas Brealey Publishing