Quick win: the problem with saying yes

When you say yes to doing something you’re not good at, you are also saying no to something you are.

Another way to think about it:

Because our lives are made up of finite resources, when you say yes to something that is not valuable, you are saying no to something that is.

It is easy to pile on activities that don’t move the needle and expend energy in areas of life that we associate with having little value. But completing tasks is not the same thing as being productive. This is especially true within investing, where virtually a limitless stream of information threatens to distract us from research that actually matters.

In 1906, economist Vilfredo Pareto noticed that 20% of the people in Italy owned 80% of the land. He went on to discover this phenomenon occurred in numerous areas of the natural and social world. The Pareto Principle, or the “80-20 Rule,” shows how a small but vital amount of action (roughly 20%) is responsible for a disproportionate amount (about 80%) of results.

Saying no to performing tasks that we know don’t add a lot of value allows us to say yes to the 20% of activities that drive big value. In investing, this focus can mean the difference between either beating the benchmark over time or impairing capital. In life, it often means the difference between mediocrity and something bigger.



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