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The Powerful 80/20 Rule | Pareto Law | Pareto Rule by Ray Dalio

Jun 3, 2023 | Pareto Rule - 80/20 Rule - Pareto Law - Pareto Principle

The famous American hedge fund billionaire Ray Dalio made this brilliant post about the 20/80 Rule, which is also sometimes called the Pareto Rule or Pareto Law:

The 80/20 Rule

The 80 20 Rule states that you get 80 percent of the value out of something from 20 percent of the information or effort. (It’s also true that you’re likely to exert 80 percent of your effort getting the final 20 percent of value.)

– Ray Dalio

Illustration of the 80/20 Rule

Ray Dalio’s 80/20 Rule Post

Ray Dalio’s Key Takeaways About the 80/20 Rule

Understanding this rule saves you from getting bogged down in unnecessary detail once you’ve gotten most of the learning you need to make a good decision. Remember the 80/20 Rule and remember what the key 20% is.
– Ray Dalio

If you like this Life and Business advice, look at the Valuables Principles by Ray Dalio for more insights.

The 80/20 Rule: Theory and Applications

The 80/20 Rule Theory

All the theory about the 80/20 rule or Pareto Principle can be found in details in our FAQ.

Applications of the 80/20 Rule in Microsoft Excel

Below are 3 Excel examples showing how you can apply the 80/20 Rule in  Microsoft Excel:

Excel Pareto  Chart - Tutorial
Automated Excel Pareto Analysis - Example
Manual Excel Pareto Analysis - Tutorial

Applications of the 80/20 Rule in Google Sheets

To highlight an 80/20 Pareto Distribution in Google Sheets via a Pareto Chart, follow this tutorial to build a Pareto Diagram in Google Sheets.

The 20 / 80 Rule Applied to Your Life to Maximise Well-Being

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