80-20 Rule (Pareto Principle) for high-income earners
Core Principle
Once you can identify factors that are critical to you or your family, they should give those factors the most focus.
Can the 80/20 rule apply to high-income earners for building wealth?
1st factor:
The easiest 80/20 way is to simply invest with either a TFSA or an RRSP account.
High-income earners who find themselves in a higher tax bracket, contributing as much as you can to an RRSP and then getting that amount back in the form of a tax refund might be an appealing solution, since that tax refund can then be re-invested in either a TFSA or an RRSP or a non-registered account, and you can later benefit from your RRSP when you’re in a lower tax bracket in retirement.
RRSP and TFSA are both keys for building wealth for you and your family.
An ugly truth or one key takeaway is that you may have no choice but to learn how to invest properly as you may have a large amount of money that needs to be managed.
2nd factor:
The other part of the equation is about wealth building, or more importantly, whether you can successfully identify investing assets which are safe and use them efficiently to create maximum value. For example, a student should try to identify which parts of a textbook will create the most benefit for an upcoming exam and focus on those first.
Is there any 80-20 rule for investing ?
investing does or does not have to be difficult, time-consuming, or highly risky?
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