Pareto Distribution Principle is used in economic study & maths. originally it was developed to understand wealth distribution in society, but you can apply it in other aspects of life to become successful
Today i’m gonna teach something very important concept which will help you in making decisions espicially when it comes to life, success, money etc…
I.E Pareto Distribution Principle, which is used in economic study & maths. originally it was developed to understand wealth distribution in society but you can apply it in other aspects of life. there is lots of maths involved but i will try my best to simplify it for you, Parento distribution principle says 80% of outcomes are due to 20% of cause. example: 80% of wealth is owned by 20% of people in this world which are billionaires. and here is another example of education system, if you look at top 20% college like Harvard, Oxford or IIT, once you got into them then your probability of becoming wealthy or successful increases significantly which is the reason why most billionaires are from elite colleges. here is 80-20 pattern, 80% of your life’s success aka outcome is dependent of that minor 20% of your hardwork or privilege or luck which you have for getting into elite league college.
so there is this invisible 80-20 rule which can be observe is various aspects of our society espicially in wealth distribution.
apart from this 80-20 rule, Parento Distribution Principle also talks about Exponential Function. like i said there is lots of maths involved but i will try my best to simplify it. when it comes to success or failure most people think its compounding effect of your hardwork but it dosen’t apply all the times. sometimes your success is Exponential & so is your failure. which means if you got success in few tasks then your probability of success in your next task increases with exponentially. it is like success, success, success & massive overnight success; failure, failure & death and this is the reason why “The 1% Rule” works because as you grow 1% by 1% each time, eventually it will be exponential growth in long run of life. because of this exponential function sometimes it’s hard to be successful or sometimes it’s easy to be successful depends on the privilege and other variables in your life.
Parento distribution principle is applied in almost every aspects of our life espicially in wealth & money. so arm your self with knowledge because you never know when you need it.
now let’s recap what we learned today
- 80-20 rule: we learned that there is pattern of 80-20 rule in any form of wealth distribution .
- Exponential function: Success - Failure both are exponential in it’s nature.
