❝The best is the enemy of the good.❞ -Voltaire
The printer is out of ink. Ugh! Now I have to replace it. I wonder how many people knew it was out of ink but let it sit, waiting for me. I pop in the replacement and my article prints. I'm fascinated by an article written by Tim Ferriss, called The Top 5 Reasons to Be a Jack of All Trades. I've often thought that I was pretty good at quite a few things, but the best at nothing. The gossip seems to be that everyone should specialize, though. That's where the money is, they say. Pick something and be the best at it. Not only does that go against my natural curiosity, but it doesn't sit right, but I don't know why.
The article is a bit of confirmation bias, because like everyone else, I want to be able to say, "that's exactly what I've been thinking...only articulated better!" In the article, Tim talks about how the phrase "jack of all trades, master of none" is nonsense. He talks about how people who know a little bit about a lot of things see relationships and the big picture better. Finally, he talks about his wide use of the 80/20 rule.
It gets me wondering about how the 80/20 rule could apply in personal finance.
The Pareto principle, or what I call the 80/20 rule, is the idea that 80% of outcomes come from 20% of the inputs. Some examples are that 80% of a company's productivity comes from 20% of their employees, 80% of language comes from 20% of the words, and 80% of the activities like sports or dance come from 20% of the moves. Effectively, 80% of the effect comes from 20% of the resources.