Posts Tagged ‘Add new tag’

Spending Time and Spending Money

Thursday, January 28th, 2010

Rather than have a personal finance post this week, I would like to give some link love to one of my favorite blogs: The Simple Dollar. Trent has written an interesting post asking readers how they spend their time and how they spend their money. The point is that there are some areas, like gym memberships, where we may spend a lot of money, but not very much time. There are others, like cooking, where we spend a lot of time but have not invested very much money.

The Simple Dollar is always a great place to look for realistic advice for saving money and using it wisely. If you want a good read, check it out.

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Finance: The Pareto Principle

Thursday, January 7th, 2010

Anybody studying economics, business, or many other areas has heard of The Pareto Principle: the law that states that 80% of results come from 20% of effort. It is a common rule used in businesses to express that 80% of business will come from 20% of clients, and 80% of clients will come from 20% of marketing effort, and so on.

While not necessarily and inherently accurate, it can be used in a variety of situations to some degree of truth and honesty. One such situation is that of a very important sector in personal finance: saving money.

If 80% of your savings will come from 20% of what you do to save, then it is important to identify the 20% and do more of it, while discontinuing ineffective areas.

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