When I first heard of the 80/20 rule I thought it was a very interesting and somewhat accurate way in looking at how wealth is distributed or as a guideline on how to be more productive. Essentially, what it means from a money point of view is that 80% of the money in the world is made by 20% of the people. From a work perspective, 80% of the work and results, such as sales for a company, are achieved by 20% of the people in the organization. You can apply that concept in many different ways.

Apparently, the 80/20 rule way of thinking was originally established as an observation on how twenty percent of the population makes about eighty percent of the wealth which shows the type of balance there is when it comes to money and who controls it. While you obviously can’t use it for every single scenario, I think it is such a useful thought to keep in mind as you can apply it to a lot of everyday things which can make you think more effectively.

As an example, when it comes to facing a situation where you have so many problems and challenges, it’s easy to just go all over the place and start fixing the first thing that comes to mind. Instead, thinking about it where eighty percent of the problem or results is probably due to something very small in comparison helps you to think things more thoroughly to identify and fix the problem. Whether it’s money problems, trying to manage a business with employees or attempting to generate revenue, realizing that only a small portion of people or activities can have such a large impact on the end result sure makes you want to make smart decisions.

It can actually be a good motivational tool too as the way I see it, 20% of the people do the things that are necessary to get to where they are while 80% of the people simply do nothing and just wish they had the same thing. It takes small things to achieve big things. So if you don’t use it already, maybe this 80/20 rule can help you in many ways too.

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It felt like there were three days in one today in regards to the weather outside. In the morning it looked and sounded like there was a waterfall outside. That eventually went away in the early afternoon though as everything was calm with a bit of sunlight coming out. A few hours later, it started to rain heavy again with thunder and lightning this time. As you can imagine, it changed again and became very sunny and bright outside.

This kind of reminded me of a time a person told me that having a business where weather can severely impact your daily operations can be a real pain and so he advised against it. There must have been a lot of people who were unprepared for the sudden weather change today as well. I remember a time where it was so sunny in the morning and then in the late afternoon it started to rain cats and dogs. No one exactly brought umbrellas with them and as you can imagine a lot of people got soaked trying to get home as well as people who were simply walking outside.

I guess summer is having its final hiccups before truly settling in.

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I suppose this is one of the more common sense things not to do where people buy things not so much because they need it, but rather it feels like the right thing to do since so many others have it. It’s kind of frustrating too to see people do that where they have done a decent job in accumulating a decent pool of funds only to then see them use it all on something large that they didn’t really need.

A real example I have personally seen was a person who had a fairly simple lifestyle as he wasn’t exactly the type that travelled a lot and spent say hundreds of dollars going out drinking every weekend. On top of that, his work life revolved around using public transit which is definitely more convenient then trying to find parking around the core of the Downtown area. As a result, he had savings within a five figure range. When people asked what he was planning to do with it, he said to buy a car. This was kind of strange considering he doesn’t really need it. But, he mentioned that it would make things more convenient for those times that he does need to commute to places where public transit isn’t an ideal thing to use. On top of that, he thought that it was a normal thing to have at his age when you look at other people as well.

Eventually, he ended up buying the car which pretty much used all of his saved funds. As expected, he rarely used it either and spent more time talking about how he had one it seemed as oppose to actually driving it. Not only that, but he didn’t really think about things such as the car insurance which he has to pay for on top of that regardless if he used it or not. In the end, it ended up being an extreme money drainer for him.

That example may be on a more large scale, but the gist of the story is pretty common for other things as well such as someone buying a laptop mainly because they see so many other people who own one. Really think if you need something before spending your hard earned dollars on it as it won’t necessarily have the same benefits for you compared to others.

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Next week I am going to be purchasing some office furniture from an existing business for a very good price and thought instead of paying someone in the range of three digits just to move it from their location to ours that I would simply rent something like a cargo van and have someone drive it which would be way less and kind of makes more sense since this is such a small job.

While researching a good place to do so, as usual there were a lot of advertisements and literatures stating how inexpensive it is such as you can rent them for one day at only say $19. When you compare that to other companies that listed something similar at say $40, you tend to automatically assume that the cheaper one is better. Upon further review, the more expensive places factored in items such as a fixed amount of travel usage while the cheaper places didn’t include items like the cost of gas. In the end, for my simple needs they seem to end up as being almost the same price wise.

That’s always something good to keep in mind as it can be easy to make a decision prematurely without really crunching the final numbers to see which one is the better deal price wise. I think sometimes people tend to make emotional purchases as well in these scenarios as they see how the upfront price is so much cheaper than the other place that they were looking at and so it is almost like a form of revenge for them to make them feel as if they outsmarted the other place. I say that because I actually do hear people say things along those lines. It‘s better to look at things from the overall picture to ensure that you are making a sound decision.

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I thought this was kind of interesting. With me talking about banks recently, I just received a letter from my bank stating how as a valued customer they have decided to increase my transaction limits where I can now withdraw larger amounts of funds at once through electronic transactions. I’m not really sure if that will benefit me in anyway though. Apparently the letter was dated as being sent on the 15th which just happens to be the same date as the blog post on how banks should be fighting to get your business. Interesting coincidence I must say.

But anyways, the funny thing was the introduction in the letter. I’m assuming the bank has this generic template that they just send out to everyone with the only difference coming from changing the name of the person that the letter is being addressed to along with different figures. Now for the letter they sent me there was a typo as you can see here:

I guess they used the wrong template or something as they addressed me as “Ms. Alan Yu” at first. Instead of re-doing it, they simply decided to write over the printed text with a pen as they wrote an “R” over the “s”. The good thing is at least it showed that they actually proof read it or that an actual person took the time to write and prepare this letter as oppose to it being an automated thing that everyone got at the same time. At the same time, in many ways things like this can hurt the professional image that they are trying to portray as well I thought. It’s almost like having an important presentation where you accidentally ripped a slide pretty badly and instead of printing a new one you tape it up in hopes that no one will notice or care.

I guess if you are a large corporation you have better odds of getting away with things like this with little to no large repercussions. I’m personally extremely picky in terms of quality and trying to give the best, so maybe I’m a little bias in saying that when it comes to you having to provide a product or service to someone else, every person counts and what you put out often brings back something of equal quality. I think this is even more important if you are say a smaller business or starting out as you have enough challenges to deal with then to let simple things like this potentially have a huge impact on your overall image and operations. If you know yourself that something is bad, get it done right instead I’d say instead of trying to slip it through.

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