Stop Following The Many And Focus On The Few
You crave connection and community just like me and everyone else. Most of us want to be liked and accepted by many. School, clicks, and social media all perpetuate and exploit this concept.
With the proliferation of the internet and social media, the constant need for acceptance and to be part of a community has led to unforeseen consequences – with many suffering from depression and anxiety trying to live up to the unrealistic expectations projected online.
The problem is, people have become so obsessed with the masses and mass approval from a global online community – who doesn’t care about them – that they’re missing out on their connections with that small group of family and friends who do care about them and who enrich them.
People addicted to social media who suffer from depression and anxiety need to start ignoring the masses and focus on the few – the few who are interested in building them up instead of tearing them down.
Through all my life’s experiences, I have discovered one simple secret. If you’re seeking to accelerate your success in business and relationships and your goal is to live the good life, ignore the masses and focus on the vital few vs. trivial many.
You may think I’m being a little harsh by calling people trivial but think about the word trivial for a second. Trivial means something of little value or importance. Am I saying that most people we associate with, hang around, and desire attention from are trivial? YES! That’s what I’m saying. All your so-called “friends” in cyberspace offer little value to you. Maybe you crave the constant “likes” on your social media posts, but are they benefiting you in any way personally?
Years ago, one of my mentors shared with me the concept of separating the vital few from the trivial many to enrich my life. He shared with me the 80-20 rule concept, coined by American management consultant Joseph M. Juran in the 1940s, which posits that in business and other areas of our lives, 20 percent of the causes drive 80 percent of the results. He also referred to this rule as the principle of the “vital few, and trivial many” and the “Pareto Principle” after an Italian economist named Vilfredo Pareto observed that 20 percent of the people owned 80 percent of the wealth in his country.
In a 2013 Inc. article, author and business owner Victor Ho analyzed real-world business data to find evidence of the 80-20 rule. What he found followed the 80-20 rule nearly to a T – concluding that, for most businesses, 20 percent of customers drive 80 percent of sales. The implication is that if you want to grow your business, it’s more important to focus on the vital 20% of repeat customers instead of the other trivial 80%.
The 80-20 rule has application in the world of investments as well. Most investors are focused on that big pool of public equities available in the stock market. There are many reasons for Main Street investor interest in public equities vs. offerings in the private markets. It has to do with indoctrination to go along with the masses from multiple sources, including family, friends, school, work, and mass media. The preference for stocks also has to do with convenience and availability. You can start trading stocks within a matter of minutes after downloading a trading app. One trading app, Robinhood, even makes trading free. What’s more convenient than that?
Public equities are many, but the returns are trivial. The average retail investor loses money when factoring in inflation. If you’re invested in a professionally traded fund like a mutual fund or ETF, the returns are no less trivial since over 90% of active managers fail to beat the market.
The ultra-wealthy avoid the triviality of the many and focus on the vitality of the few. Instead of casting a wide net on the public markets, the rich prefer to focus on a smaller market – the private markets where returns are anything but trivial. Returns on private assets like commercial real estate (CRE) and investments in private businesses (PE) outpace public returns by no small margin.
When investing, it’s best to ignore the masses’ noise and turn your attention to the few individuals who can lift you and build your wealth instead of taking from it. But, how can you find the vital few who can build you up?
I have found that networking out in public and online and putting myself out there has attracted people into my circle of influence with similar interests and aspirations. It’s these intimate connections and relationships that have contributed to most of my investment success.
Focusing on private investments that pale in numbers to public options and nurturing investing relationships with the few instead of the many have resulted in substantial investment returns that the masses who invest in Wall Street can only dream of.
The 80-20 rule has taught me that the stock market will not make you rich – the number of private investments in the few that will account for 80% or more of your wealth. Work on your relationships within this arena if you want more of these opportunities to fall in your lap.
If you’re spending more time nurturing relationships with the masses on social media instead of nurturing close interactions with a few valuable relationships, you’re wasting your time.
Remember the principle of the vital few and trivial many. It’s the few that will build you up.