Warren Buffett 5/25 Rule And 80/20 Rule

Warren Buffett, as he is known, is an American businessman and the biggest stock investor. With an average fortune of 80 million dollars, he is one of today’s top investors. His biggest feature is continuity. He has been earning these earnings regularly for 60 years, not in a few years. This discipline shows that he is someone to be taken as an example.

Considering that Warren Buffett got to where he is today through discipline and good use of time, we should learn from this. Two of his biggest rules are known as the Warren Buffett 5/25 rule and the 80/20 rule. If you don’t know what these are, you will learn them now.

Warren Buffett 5/25 Rule

First, let’s learn about the 5/25 rule. Warren Buffett uses time better than other people. He is always ahead because he accomplishes in a very short time what others have done for years. He has his own strategies. The Warren Buffett 5/25 rule is a way to focus and prioritize.

Mike Flint was Warren Buffett’s private pilot for 10 years. They had a friendly relationship and were close enough to talk about their goals. Warren Buffett was uncomfortable with him being an employee and advised him to pursue his goals. So he asked him to write down 25 goals he had in mind. Thus, he anticipates Flint’s steps. He then tells him to choose the 5 most important and prioritized goals out of these 25. Flint is hesitant because every goal is important to him. However, he thinks carefully and chooses these 5.

Now the goals are divided into 2 groups. The 5 most important ones and the 20 less important ones. Flint thinks that he will focus on these 5 goals first and then move on to the remaining 20. But Buffet says that this will definitely not be the case and asks him to completely forget about those 20 goals. From now on, he says, you only have 5 goals.

Focusing on only 5 goals will lead to results much faster than having 25 goals. Even if you are not going to do the remaining 20 goals right now, even keeping it in the back of your mind creates a focus problem. So you have to put the rest completely out of your mind. If you want to achieve success, focus on one thing and try to get it done. If there are too many goals, focus becomes a problem. If you also have trouble focusing, Warren Buffett’s 5/25 rule is for you.

warren buffett 5/25 rule

Warren Buffett 80/20 Rule

The Warren Buffett 80/20 rule is similar to the 5/25 rule. It is sometimes referred to as the pareto principle or pareto rule. Because it is very similar to Wilfredo Pareto’s principle. Both rules are about focus. It’s about eliminating distractions. If you have trouble focusing and you don’t know why, this strategy is for you.

It is easy to eliminate visible problems. For example, if you can’t focus on your work because you are watching TV, you stop watching TV. If you spend time on social media, you stop. But if the real problem is that you can’t focus even when you stop, something insidious is going on.

If you want Warren Buffett 80/20 rule to be successful, you need to know how to say no. For example, if a 1-hour meeting is held for an issue that can be solved by talking for 2 minutes, and what is discussed is repeated over and over again, this is a waste of time. Wasting time creates a focus problem.

It is important to make the right choice. You need to stop time-wasting habits and meetings. But don’t give up what works for you. For example, if you read a book, this is not wasted time. On the contrary, it creates a diversity of ideas and makes you think more specifically. Warren Buffett spends an average of 6 hours a day reading.

The main idea of the 80/20 rule is that 80% of the results are due to 20% of the causes. The proportions may vary. But it is in this neighborhood.

Wilfredo Pareto exemplified it as follows. 80% of the people’s wealth belongs to 20% of the people. Nowadays, it has become very narrow, like 90-10. It is obvious that this applies to every country.

The main message is that 80% of what you do is 80% failure and 20% success. Not everything you do will be positive, but the more you do, the more benefits you will get.

Bir cevap yazın

E-posta hesabınız yayımlanmayacak. Gerekli alanlar * ile işaretlenmişlerdir