The Pareto or 80/20 Principle may also be applied to our Passive and Active Income.
Pareto or 80/20 Principle states that a small number or 20% of the causes are responsible for a large percentage or 80% of the effects.
It is suggested that we live within the 80% of our total income. Use this 80% to support all our basic needs such as food, shelter, clothing and all the necessary expenses to support our lifestyle and taxes.
We set aside the remaining 20% of our total income to fund in building our empire.
Tips!
This 20% may be invested in Treasury Bills or T-bills. T-Bills earn interest more than a bank offers. Maybe we roll them every 3 months or more.
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