Principles: Life and Work

by Ray Dalio

Establish clear metrics to make certain that you are following your plan.

There are many successful, creative people who aren’t good at execution. They succeed because they forge symbiotic relationships with highly reliable task-doers.

That’s all there is to it! Remember that all 5 Steps proceed from your values. Your values determine what you want, i.e., your goals.

You will need to synthesize and shape well. The first three steps—setting goals, identifying problems, and then diagnosing them—are synthesizing (by which I mean knowing where you want to go and what’s really going on). Designing solutions and making sure that the designs are implemented are shaping.

Remember that weaknesses don’t matter if you find solutions.

Identifying and not tolerating problems requires you to be perceptive and good at synthesis and maintaining high standards; diagnosis requires you to be logical, able to see multiple possibilities, and willing to have hard conversations with others; designing requires visualization and practicality; doing what you set out to do requires self-discipline, good work habits, and a results orientation.

have humility so you can get what you need from others!

Everyone has weaknesses. They are generally revealed in the patterns of mistakes they make. Knowing what your weaknesses are and staring hard at them is the first step on the path to success.

Look at the patterns of your mistakes and identify at which step in the 5-Step Pr...

Everyone has at least one big thing that stands in the way of their success; find yours and deal with it.

You can either fix it or you can get the help of others to deal with it well. There are two paths to success: 1) to have what you need yourself or 2) to get it from others.

Understand your own and others’ mental maps and humility.

To convey this simple concept, imagine rating from one to ten how good someone’s mental map is (in other words, what they know) on the Y-axis and how humble/open-minded they are on the X-axis,

Once you understand what you’re missing and gain open-mindedness that will allow you to get help from others, you’ll see that there’s virtually nothing you can’t accomplish.

The two biggest barriers to good decision making are your ego and your blind spots. Together, they make it difficult for you to objectively see what is true about you and your circumstances and to make the best possible decisions by getting the most out of others.

Understand your ego barrier. When I refer to your “ego barrier,” I’m referring to your subliminal defense mechanisms that make it hard for you to accept your mistakes and weaknesses.

the need to be important and the fear of not mattering—reside in primitive parts of your brain such as the amygdala, which are structures in your temporal lobe that process emotions. Because these areas of your brain are not accessible to your conscious awareness, it is virtually impossible for you to understand what they want and how they control you. They oversimplify things and react instinctively. They crave praise and respond to criticism as an attack, even when the higher-level parts of the brain understand that constructive criticism is good for you. They make you defensive, especially when it comes to the subject of how good you are.

Understand your blind spot barrier. In addition to your ego barrier, you (and everyone else) also have blind spots—areas where your way of thinking prevents you from seeing things accurately.

When you point out someone’s psychological weakness, it’s generally about as well received as if you pointed out a physical weakness.

Those who adapt do so by a) teaching their brains to work in a way that doesn’t come naturally (the creative person learns to become organized through discipline and practice, for instance), b) using compensating mechanisms (such as programmed reminders), and/or c) relying on the help of others who are strong where they are weak.

For example, the lateral approach to thinking common among creative people can lead them to be unreliable, while more linear thinkers are often more dependable; some people are more emotional while others are more logical, and so on.

Practice radical open-mindedness.

Radical open-mindedness allows you to escape from the control of your lower-level you and ensures your upper-level you sees and considers all the good choices and makes the best possible decisions.

Sincerely believe that you might not know the best possible path and recognize that your ability to deal well with “not knowing” is more important than whatever it is you do know.

Recognize that decision making is a two-step process: First take in all the relevant information, then decide.

Don’t worry about looking good; worry about achieving your goal.

Recognize that to gain the perspective that comes from seeing things through another’s eyes, you must suspend judgment for a time—only by empathizing can you properly evaluate another point of view.

Remember that you’re looking for the best answer, not simply the best answer that you can come up with yourself.

Be clear on whether you are arguing or seeking to understand, and think about which is most appropriate based on your and others’ believability.

If you have a different view than someone who is believable on the topic at hand—or at least more believable than you are (if, say, you are in a discussion with your doctor about your health)—you should make it clear that you are asking questions because you are seeking to understand their perspective.

Appreciate the art of thoughtful disagreement.

When two people believe opposite things, chances are that one of them is wrong. It pays to find out if that someone is you.

In thoughtful disagreement, your goal is not to convince the other party that you are right—it is to find out which view is true and decide what to do about it. In thoughtful disagreement, both parties are motivated by the genuine fear of missing important perspectives. Exchanges in which you really see what the other person is seeing and they really see what you are seeing—with both your “highe...

Use questions rather than make statements. Conduct the discussion in a calm and dispassionate manner, and encourage the other person to do that as well. Remember, you are not arguing; you are openly exploring what’s true.

People who change their minds because they learned something are the winners, whereas those who stubbornly refuse to learn are the losers. That doesn’t mean that you should blindly accept others’ conclusions. You should be what I call open-minded and assertive at the same time—you should hold and explore conflicting possibilities in your mind while moving fluidly toward whatever is likely to be true based on what you learn.

I also recommend that both parties observe a “two-minute rule” in which neither interrupts the other, so they both have time to get all their thoughts out.

It doesn’t pay to be open-minded with everyone. Instead, spend your time exploring ideas with the most believable people you have access to.

What’s really counterproductive is spinning in your own head about what’s going on, which most people are prone to do—or wasting time disagreeing past the point of diminishing returns. When that happens, move on to a more productive way of getting to a mutual understanding, which isn’t necessarily the same thing as agreement.

That’s why radical open-mindedness isn’t easy: You need to teach yourself the art of having exchanges in ways that don’t trigger such reactions in yourself or others.

Being able to thoughtfully disagree would so easily lead to radically improved decision making in all areas—public policy, politics, medicine, science, philanthropy, personal relationships, and more.

Plan for the worst-case scenario to make it as good as possible.

Closed-minded people don’t want their ideas challenged. They are typically frustrated that they can’t get the other person to agree with them instead of curious as to why the other person disagrees.

Open-minded people are more curious about why there is disagreement. They are not angry when someone disagrees.They understand that there is always the possibility that they might be wrong and that it’s worth the little bit of time it takes to consider the other person’s views in order to be sure they aren’t missing something or making a mistake.

Open-minded people genuinely believe they could be wrong; the questions that they ask are genuine.

Closed-minded people focus much more on being understood than on understanding others.

Open-minded people always feel compelled to see things through others’ eyes.

Closed-minded people say things like “I could be wrong . . . but here’s my opinion.”

Open-minded people know when to make statements and when to ask questions.

Closed-minded people block others from speaking.

Open-minded people are always more interested in listening than in speaking; they encourage others to voice their views.