CPC Episode #30 - Transform Your Life With This Equation

I'm grateful you're joining me this week. Let's talk about making your life easier. Let's talk about giving your more impact in everything you do. And we'll do that by discussing one of my favorite laws of the universe. You see, the universe operates with many laws. Thermodynamics, energy, the law of vibration, which states that everything moves.. no doubt you've heard of these in school. But today I want to talk to you about another law. And not many schools teach it. It’s also known as an equation in math, which you can plot on a chart. Those who are at the top of their game in any endeavor, health, wealth, physical, talent, embrace this law. And I believe if will help you get more out of life with less effort. And what's not to love about that? So let's get it started this week, Episode 30, entitled, Transform your life with this equation.

Hidden inside many data points in life, wealth, health, economies, salaries, productivity, book sales, record sales, music, illness, etc, there’s a phenomenon going on. Nicknamed the law of the vital few, it was first discovered and quantified by an Italian economist named Vilfredo Pareto. Pareto took meticulous data of the landowners and economy during his time. And he noticed that 20% of the land owners owned 80% of the real estate.  As he dug deeper, he saw the 80/20 rule happened in other aspects of life.

Let's get into this powerful law, and how it helps you in college prep and beyond. The law, by the way, is also known as the law of the vital few (20%) (versus the trivial many 80%). I like to call it one of the most powerful equations in the universe. And if you find it and use it, you can transform your life.

In summary, 20% of the inputs, effort, or causes produce 80% of the outputs, results, and consequences. Let's look at this in terms of cause and effect:

• Inputs --> outputs
• Effort  --> Results
• Causes -->Consequences

Thinking Changes for 80/20

• Quiet, focused thinking. Not rushed, multi-tasking messiness
• Focus on strategy
• Forget linear where you Do 1 thing, get a part of a result. Do another thing, get another piece of a result
• Go to exponential thinking. IF a task consists of 5 potential actions, 1-2 of those have a majority of the impact.
• Do those. Because all causes/inputs do NOT have the same effect.
• Pull positive levers in your life which have exponential effect.
• Remove negative levers in your life which have exponential hazard
• Disassociate effort from reward
• Embrace laziness. I'm a lazy person. I love to automate, eliminate, or delegate the mundane tasks. And 80/20 embraces laziness, and only acting when it's valuable. 

The Power Law versus Linear thinking

• When you get a chance, pull up a bell curve. Look at the graph. The bell curve has a fat middle, and smaller left and right tails. Most of everybody else, or every other factor falls in the fat middle.
• Next, compare this to an exponential curve. y = cx^b. This, my friends, is the power law. you'll notice the graph starts low and pretty straight moving left to right just about the x-axis. But near the end, the graph explodes upwards. This means the last 20% or so of the x-values account for the majority of the impact. I urge you to pull up a power law curve and stare at it for a few moments. This is the diagram for your life. The 80/20 graph has fat tails. The beef and impact sits at the end.

Notice, nowhere in there did I use the word "effort." Nobody cares about your effort. Instead, they care, and you should care, about achievements. About results. About outputs. 

Think about it...Would you place any lower value on making $100,000 if you spent 10 hours on it versus all year?

NO, and you shouldn't. You found an exponential way to get the same amount of money in a shorter amount of time with less effort.

I first learned this from an almost-billionaire named Richard Koch. Richard wrote a few books, was a former management consultant at Bain, and then went on to be a successful investor. And here's a powerful insight from Richard...

80/20 from Richard Koch

• 20 is 4 times greater than 80. Which means the top is 4 times more productive at the top then at the bottom
• so 4 units of output to 1/4 at the bottom
• So if you divide 4 by 1/4, you get 16x times productivity at the top 20% as you do at the bottom 80%

Now we take this inside and expand it...

80/20 is fractal or continuous slivers of it's former self...

• Almost nobody realizes that 80/20 is an endless repeating pattern:
• 80/20². If you ignore the bottom 80%, 80/20 will still be true of the top 20% that’s left. That means 64% of your results come from 4%.
• Then you can 80/20 the 80/20 for the top 4% and guess what, 50% of your results come from 1% of what you do.

insights

• Life Isn't Fair
• Winner take All
• Most of what you do all day is useless or low value. And hear me out, that's not an insult. We've all done it, or continue to do it. The first time I heard this, I got mad. I thought to myself, what I do during the day means something to my goals. And then I started tracking and analyzing. And this statement hit me over the head, it was right. Most of what I did was low value or useless in the grand scheme of things.
• 80/20 embraces laziness and insight.
• Instead of trying to work hard on everything all the time, sit back, and find the impact inputs of what you want to do.
• What inputs will get you the majority of your outputs?

Here's some real-life examples of 80/20

• 20% of your social circle provide you with 80% of the value.
• 20% of cities have 80% of the populations.
• 20% of your work tasks produce 80% of results for the day, month, year.
• 20% of investment portfolios produce 80% of the gain.

80/20 goes or negative effects as well.

• bugs in computer code -  In 2002, Microsoft reported that 80% of the errors and crashes in windows and office are caused by 20% of the bugs involved.
• 20% of patients use 80% of health care resources.
• problems in your life. I'm willing to bet 1-2 things out of every 10 cause you the most stress and worry. If you could fix these 1-2 problems, it would have a monumental effect
• People in your life who cause you the most harm. If you interact with 10 people, no doubt 1-2 of them cause you most of your problems
• The Dunedin Study has found 80% of crimes are committed by 20% of criminals

Here's a personal example of the elimination of the negative for 80/20...

I used to have a bit of trouble sleeping. I took an inventory of my diet, work, and other habits on these days. After tinkering and changing a few things around, I noticed on nights I had any sort of alcohol after 6:00, my sleep would be disrupted. No matter what other parameters changed, even having a bit of caffeine late, it was the alcohol which was the thorn in my side. Out of all the factors I took into account, food, drink, exercise, work habits, breaks, sleeping environment, only 1 caused most if not all of the problems. 

I eliminated the alcohol, and most sleep disruptions vanished.

80/20 is a benchmark...

• bY THE WAY, 80/20 is the benchmark. In the modern world, we're seeing 85/15, 90/10, 95/5, and 99/1
• Look at book sales, album sales, concert ticket sales, revenue from salesman.
• It's turning into a winner take all, (OR MOST).

Here's a personal example for website traffic...

On my MathCelebrity site, we're going to get 3.7 million or so visitors this year.

We have 500 calculators. But the majority of our traffic hits 20 or so of our pages more than any other page.

So you can apply this to your life and figure out levers to pull to have the most impact. Health, wealth, college prep, financial aid, grades, etc.

80/20, or 85/15, or 90/10, or 95/5, or 99/1 is EVERYWHERE

Once you start digging into 80/20 and seeing it, you'll start seeing it everywhere. And then what you'll do is find other aspects of your life to apply it to. Things like:

• health
• Wealth
• Well-Being
• Friends
• Work
• Stress
• Problems
• Business
• Learning
• Personal Growth

Network Value

• Friends are not of equal importance
• Neither are your contacts in your network. Last episode, I talked about the value of networking. Let's expand on that.
• In your network, let's say you have 1,000 LinkedIn connections. I'd bet 200 of them can get you farther than the other 800.
• And out of those 200, 160 give you more impact than the other 40 in the 200.

Let's talk about college prep and 80/20, and how to play it on easy mode

• Studying - No doubt there is a few concepts which bog you down on the ACT/SAT exams. And those small number of concepts drag down your time and your confidence. If you could only improve those slightly, your entire outlook would change
• Things which kill study sessions. Out of all the things you do, I'd say distractions from cell phones/internet, poor diet, and lack of sleep kill more study sessions than anything else
• Out of all the things you do in high-school and college prep, grades is an 80/20, maybe even higher on the ranking scale. Strong grades opens many doors for you. 
• Out of all the colleges you put on your list, there will be a small number which make the final cut. 10 colleges, 80/20 demands that 2 make the final list or your "star list"
• Financial Aid - There will be a small amount of factors which affect your EFC amount, thereby driving your financial aid
• College Essays, if we go 80/20, I'd say the vital few would be your title, your opening, and your close. And all of this ties into the Big Idea.
• I've talked about networking on prior episodes. out of all the networking connections you make for college - advisors, alumni, colleagues, 20% of them will be vital in helping you take the next step or giving you valuable advice.
• On campus-interviews if a college requires them. Like any interview, the 80/20 in these is the introduction and first impression, a great story or 2 stories about what you bring to the table, and the conclusion. Most of the rest is filler. The interviewer might size you up and form opinions about you, but the vital few is the introduction, your unique story, and a good conclusion.
• Extra-curriculars - You might do 4-5 things in your off time, but one of them will stand out to people as a unique identifier to you. I talked in a prior episode about a guy who had a passion for Wing Chun Kung Fu and all the unique facts about it. And his passion came through when speaking about it. Everybody remembered him for this. The same goes for you. Find your unique, Big Idea about you. And this is your 80/20 to use
• Recommendations. You'll ask various people for recommendations, for college, for internships, and for leadership positions., But 1-2 of those will hold far more weight than the rest of them combined.

Required Reading

If you read nothing else, I urge you to pick up 2 books. 80/20 by Perry Marshall and 80/20 principles by Richard Koch (K-O-C-H). This is where you transform your linear thinking into exponential thinking, simplify your life, and power up your results.

So you can take the 80/20 principle and apply it two ways...

1. do more of what works. find the few inputs, habits, and traits which give you the lion's share of the benefits.
1. The change I recommend is finding which of what you do really matters. What has an exponential impact. And for the rest, can you automate, delegate, or eliminate it?
2. Eliminate more of the waste, problems, or negative impacts. Think about the problems you have, the stress you have, and the worry you have. Find out the 20% or so which cause these problems, and see if you can reduce or eliminate the impacts.

College Prep has 80/20 as well. And the best way to find the 20% levers to pull is work with experts who  know the system inside and out. An expert will move the needle for you for financial aid, stress reduction, and time savings more than any other factor. So what I've done to help you is 2 things...

1) I've partnered up with an expert college prep company. And they offer strategy sessions, which usually cost $250. But for podcast listeners who respond to this offer, you'll get it free, with NO OBLIGATION TO BUY ANYTHING AFTER. To claim this free offer, go to cpcshow.com and dial the 800 number on the page you land on. Leave your contact info with my assistant and mention the free college prep strategy session. Once again, that's cpcshow.com

2) On the cpcshow.com page is a $1 trial offer to try out our ACT and SAT Mastery Toolkit. This software walks you through a step-by-step study schedule to get 150 extra points on the SAT exam and 3 extra points on the ACT exam. Again, both offers can be found at cpcshow.com.

Why should you capitalize on these offers?

Because you may go through college prep spending hours of gruelling time, trying to find your way around. Instead, why not pull the 80/20 lever and work with experts who can give you shortcuts, better grades, and more financial aid?

Ask yourself this question...

If you are sitting here a year from now, and you knew you could have gotten better ACT and SAT scores and more financial aid in your pocket had you just acted on this offer, could you live with that?

One more time, to pull the 80/20 lever of college prep, go to cpcshow.com.

Thank you for listening.