The 95/5 Principle and How it Affects Our Lives

What is the 95/5 Principle? Well, I made it up.  It is something I observe in life.  I briefly explained the 95/5 principle in my previous blog post (it is below).  As a quick reminder, that is when we make a decision based on how we live in or use that item or space 5% of the time.  It is when we choose to do something because it is only inconvenient 5% of the time.  Or maybe we buy it because we love it despite the narrowness of the actual use.  Let me give you a simple example.  How many of you give 2 ft. of pantry space to a turkey roasting pan, and how often do you roast a turkey?  That is the 95/5 principle, (I know that is a 99/1 item but I am big picture thinker.).

I saw this in my own life recently.  My husband and I have traditionally entertained quite a bit and traveled several times a year.  As a result of that, we never had a dog.  We like dogs well enough, but I wear black too often to want to frequently play with other’s dogs who can’t look at me without shedding.  So, though I manage and enjoy dogs, they were never much part of my life.

As a speaker, I travel a lot, and my husband deals with some pain issues related to his back.  Being in pain alone is a challenging combination.  So after much consideration, we got a goldendoodle puppy (they don’t shed ?).  Now that we have had him for 8 months, we have observed a few things – we travel together less – we expected this, and when it comes to company, I have learned that some people like dogs less than I ever did.  I value those people.  So taking care of the dog with company requires a bit more work on our side.  And a bit of inconvenience and crate time on his part.

I realized that the 95/5 principle was intact here.  We got the dog for the 95% of the time it is just the one or two of us at home.  And we work through the adaptations we have made for the 5% of the time he is a challenge.  Cats are the same.  Some people are allergic to them.  So we made the decision for the majority of our life even though there is some inconvenience as well.  The benefits began to overrule the challenges.

How does this apply to your life?  Is it the right decision for the right dreams?  Are you putting off a good decision because of a small inconvenience?  Are you letting the 5% rule your life?  And is that okay with you?  Sometimes it will be and sometimes we should reconsider.  I wish you peace as you make decisions in your life.

The 95/5 Principle

I know you have heard of the 80/20 principle, “The Pareto Principle”, and I agree with that principle for the general work environment. 20% of the effort for 80% of the results.  And Pareto may have even found a scientific way to prove it.  

As a real estate agent, I watch lots of folks make decisions, and I get to watch others decision making processes. I have the pleasure of opportunity for observation.

And what I see often enough leads me to come to this principle –  that people often make decisions based on something that is actually a small part of their lives.

In general application, the 95/5 principle is in effect when people buy a house where a major focus of what they want is something they will seldom use.  For example, they have to have a dining room for 2 family gatherings per year.  They require a dining room for 60 hours out of the 8,760 hours they will live there in a year.  I know, that is less than 5%, but let’s go with it.  Maybe they will have a few dinner parties.  The result of this is that they rule out houses that may actually work well for them, or even better in other situations they use more often, but they hold out for the house with the large dining room.  I call that  95/5 decision.  It is neither wrong, nor right.  It is a consideration that I want my buyers to recognize.  Once they recognize it, they are then deciding it on purpose, rather than letting an emotional need drive the decision making process.

We frequently see this also as a factor for seldom-played grand pianos, extra bedrooms for unborn grandkids, and a large yard for kids who don’t play outside.  Again, if a buyer can afford it, they can, of course, buy for things they love and wish for.  If they cannot afford the larger home, it is my desire that they’d be realistic in their usage of their house.

Certainly, the choice is the buyer’s and they can and will buy for the 5%, and that is fine.  House buying is mostly emotional anyway.  But for those of you on a budget, do you want to buy for the 5%?

Happy Shopping! You can read about the personal side of this principle here.