Problems with the Pareto Principle and Outsourcing

If you’ve read enough about how to become rich, you’ve probably encountered two concepts:

1. Pareto Principle – 20% of the input is responsible for 80% of the output. In personal finance, people tout focusing on only doing that 20% responsible for the most return. That leads to principle number 2:
2. Outsourcing – For the parts of the 80% of the job that are still necessary, you outsource them.

Let me start by stating that I agree that the Pareto Principle is real and outsourcing can be useful in some regards. Let me also state that I agree that while frugality has limits, income potential does not. I agree that everyone is capable of earning more and the amount is potentially limitless.

I also know there is a natural progression in employment and money. Your first minimum wage job was awesome. You got money! Now, you couldn’t force me to do things I hate for minimum wage. The money isn’t worth it to me. At some point in that progression, you realize what you’re willing to do and for how much money.

So what’s my beef? These two concepts assume that I want to progress to the point where I am disconnected to the output. Steve over at Think Save Retire has talked about the awesomeness of being unimportant. For some of us, being the one solely responsible for the success or failure of a project sounds horrifying. There is benefit in being the one that is getting paid to do the 80%.

I’m clearly biased. Do you know what I do for work? I was literally hired to replace an outsourced Indian research team for my company. I get paid hourly to do all of the research that is now outsourced to me, in Alaska. Am I brokering million-dollar deals? Nope. Do I have to travel constantly for work? Nope. (I only go to the office when I CHOOSE to go!) Am I making six digits a year? Not even close! Do I love it? Yes! Yes I do! 

I spend all of my billable hours in the 80%. I read TONS of stuff, put together research briefs, and send over connections I’ve seen in my research. Do all of my thoughts/research turn into something amazing? No. The Parebo Principle is real here as well. Probably 20% of what I do accounts for 80% of the success. But in a situation like this, the other 80% of what I do is important. There’s no way to predict which ones will be awesome and which ones won’t without doing all of the research. And sometimes, a connection made with some of those 80% projects that went nowhere turns into an awesome 20% project with a missing piece later.

Everyone is different. Some people spend their holidays and after hours hustling because they can’t help themselves. These are the people that outsource things like research to people like me because they want to spend their time in the 20%. Then there are people like us. We have creative, entrepreneurial aspirations, but we enjoy spending our time in the 80%. My passion is research. I love reading, studying, making connections, and learning. In my free time, I’m compelled to read more and learn more.

People like us also enjoy living unimportant lives. As I type this, Lui and Mr. T are stacking pattern blocks on the table, Florin is building a domino tower, and Penny is designing doll outfits on paper with stencils. I grabbed my computer to type this after reading Lui a story. On days like this, we don’t have our minds preoccupied with hustles or to-dos or the potential of limitless income.

Not all of us have to move past the 80% jobs where someone else makes the big bucks while we focus on keeping things moving. That’s okay. If you read those things and feel guilty that you’re just an employee to someone else, ask yourself: Would I actually be happier in that higher position? Do I like what I do? 

Remember that the process is part of the product. Don’t give up enjoying the process for the sake of the product. And if you feel guilty for enjoying your lower income job, don’t. If you’re happy, that’s more than most people can say!