Why You Need to Understand Price's Law and the 80 20 Rule (Pareto Principle)

⚒️Resources⚒️

Free Masterclass On How to Increase Income In Retirement By Up To 30%: https://app.thepeakfp.com/free-training

Have you ever looked around and wondered…

How come it seems like those individuals who get ahead seem to get further and further ahead?

There’s a quote in the new testament that touches on this phenomenon.

From the book of Matthew, 13:12

“To those who have much, more will be given.”

The question is why does this happen?

And what can we learn from it?

Instead of using religious prophecy from the book of Matthew,

Today I’ll share two statistical concepts to help explain this phenomenon.

And it is SO important that you understand these two laws of statistics that shape the worlds of business and finance.

The first concept is called Prices Law

It tells us that a tiny minority of people produce the majority of the results

The second concept is the Pareto Principle

Or the 80/20 rule

Which tells us that a tiny minority of the activities we focus on produce the majority of the outcomes we desire

Both of these principles tell us that we urgently need to narrow down our focus

We are distracted by too many people claiming to have expertise

And too many activities that don’t produce results

In the full video on my youtube channel

I explain how we can take the Pareto Principle and Prices law and turn those into a framework

That can help us accelerate our progress towards our goals

I hope you enjoy the video

Your future self will thank you

00:07 Intro

00:52 Price's Law

03:11 What do we do with Price's Law

04:18 Pareto Principle

05:16 What do we do with the Pareto Principle

06:42 Summary

Inspiration for this video came from this Jordan Peterson lecture:

https://www.youtube.com/watch?v=BZMBdRfbk6A&ab_channel=TheArtofTrading