Principles: Life and Work

by Ray Dalio

Closed-minded people have trouble holding two thoughts simultaneously in their minds.

Open-minded people can take in the thoughts of others without losing their ability to think well—they can hold two or more conflicting concepts in their mind and go back and forth between them to assess their relative merits.

Closed-minded people lack a deep sense of humility. Humility typically comes from an experience of crashing, which leads to an enlightened focus on knowing what one doesn’t know.

Open-minded people approach everything with a deep-seated fear that they may be wrong.

Understand how you can become radically open-minded.

Regularly use pain as your guide toward quality reflection.

Make being open-minded a habit. The life that you will live is most simply the result of habits you develop. If you consistently use feelings of anger/frustration as cues to calm down, slow down, and approach the subject at hand thoughtfully, over time you’ll experience negative emotions much less frequently and go directly to the open-minded practices I just described.

Get to know your blind spots. When you are closed-minded and form an opinion in an area where you have a blind spot, it can be deadly. So take some time to record the circumstances in which you’ve consistently made bad decisions because you failed to see what others saw.

If a number of different believable people say you are doing something wrong and you are the only one who doesn’t see it that way, assume that you are probably biased.

Meditate. I practice Transcendental Meditation and believe that it has enhanced my open-mindedness, higher-level perspective, equanimity, and creativity.

Be evidence-based and encourage others to be the same.

It is possible to become aware of this subconscious process happening and to catch yourself, or to allow others to catch you going down this path. When you’re approaching a decision, ask yourself: Can you point to clear facts (i.e., facts believable people wouldn’t dispute) leading to your view? If not, chances are you’re not being evidence-based.

Do everything in your power to help others also be open-minded.

Use evidence-based decision-making tools.

What if you could unplug that lower part of your brain entirely and instead connect with a decision-making computer that gives you logically derived instructions, as we do with our investment systems?

Because of the different ways that our brains are wired, we all experience reality in different ways and any single way is essentially distorted. This is something that we need to acknowledge and deal with.

For example, those who were “conceptual” and imprecise spoke one language while those who were literal and precise spoke another. At the time, we chalked this up to “communication problems,” but the differences were much deeper than that—and they were painful for all of us, particularly when we were trying to achieve big things together.

Which of these forces (self-interest or collective interest) wins out in any organization is a function of that organization’s culture, which is a function of the people who shape it.

As I’ll explain in Work Principles, the rewards of working together to make the pie bigger are greater than the rewards of self-interest, not only in terms of how much “pie” one gets but also in the psychic rewards wired into our brains that make us happier and healthier.

value the whole that we are part of even more than ourselves.

In imagining what the future of our thinking will be like, it’s also interesting to consider how man himself might change how the brain works.

Our subconscious fears and desires drive our motivations and actions through emotions such as love, fear, and inspiration.

But a note of caution is in order too: When thoughts and instructions come to me from my subconscious, rather than acting on them immediately, I have gotten into the habit of examining them with my conscious, logical mind. I have found that in addition to helping me figure out which thoughts are valid and why I am reacting to them as I do, doing this opens further communication between my conscious and subconscious minds.

be aware of your subconscious—of how it can both harm you and help you, and how by consciously reflecting on what comes out of it, perhaps with the help of others, you can become happier and more effective.

Habit is probably the most powerful tool in your brain’s toolbox.

Good habits are those that get you to do what your “upper-level you” wants, and bad habits are those that are controlled by your “lower-level you” and stand in the way of your getting what your “upper-level you” wants. You can create a better set of habits if you understand how this part of your brain works. For example, you can develop a habit that will make you “need” to work out at the gym.

Habits put your brain on “automatic pilot.” In neuroscientific terms, the basal ganglia takes over from your cortex, so that you can execute activities without even thinking about them.

The most valuable habit I’ve acquired is using pain to trigger quality reflections. If you can acquire this habit yourself, you will learn what causes your pain and what you can do about it, and it will have an enormous impact on your effectiveness.

Train your “lower-level you” with kindness and persistence to build the right habits.

Understand the differences between right-brained and left-brained thinking.

Our experience has been that left-brained folks tend to see right-brained folks as “spacey” or “abstract,” while right-brained thinkers tend to find left-brained thinkers “literal” or “narrow.” I have seen wonderful results occur when people know where their own and others’ inclinations lie, realize that both ways of thinking are invaluable, and assign responsibilities accordingly.

Understand how much the brain can and cannot change.

We can all learn new facts and skills, but can we also learn to change how we are inclined to think? The answer is a qualified yes.

But recent research has suggested that a wide variety of practices—from physical exercise to studying to meditation—can lead to physical and physiological changes in our brains that affect our abilities to think and form memories.

There are coping techniques that we can use—for example, the creative, disorganized person who is likely to lose track of time can develop the habit of using alarms; the person who isn’t good at some type of thinking can train himself to rely on the thinking of others who are better at it. The best way to change is through doing mental exercises.

The four main assessments we use are the Myers-Briggs Type Indicator (MBTI), the Workplace Personality Inventory, the Team Dimensions Profile, and Stratified Systems Theory.33

Introverts focus on the inner world and get their energy from ideas, memories, and experiences while extroverts are externally focused and get their energy from being with people.

Perceivers work from the outside in; they see things happening and work backward to understand the cause and how to respond; they also see many possibilities that they compare and choose from—often so many that they are confused by them. In contrast, planners work from the inside out, first figuring out what they want to achieve and then how things should unfold.

Creators generate new ideas and original concepts. They prefer unstructured and abstract activities and thrive on innovation and unconventional practices.

Advancers communicate these new ideas and carry them forward. They relish feelings and relationships and manage the human factors. They are excellent at generating enthusiasm for work.

Refiners challenge ideas. They analyze projects for flaws, then refine them with a focus on objectivity and analysis. They love facts and theorie...

Executors can also be thought of as Implementers. They ensure that important activities are carried out and goals accomplished; they are ...

Flexors are a combination of all four types. They can adapt their styles to fit certain needs and are able to look at a prob...

Those who tend to focus on goals and “visualize” best can see the big pictures over time and are also more likely to make meaningful changes and anticipate future events.

Task-oriented people tend to make incremental changes that reference what already exists. They are slower to depart from the status quo and more likely to be blindsided by sudden events. On the other hand, they’re typically more reliable. Although it may seem that their focus is narrower than higher-level thinkers, the roles they play are no less critical. I would never have gotten this book out or accomplished hardly anything else worthwhile if I didn’t work with people who are wonderful at taking care of details.

Certain attributes combine frequently to produce recognizable archetypes.

the spacey, impractical Artist; the tidy Perfectionist; the Crusher who runs through brick walls to get things done; the Visionary who pulls amazing big ideas seemingly out of the air. Over time I came up with a list of others, including Shaper, Chirper, Tweaker, and Open-Minded Learner, as well as Advancer, Creator, Cat-Herder, Gossiper, Loyal Doer, Wise Judge, and others.

Individual people will always be more complex than the archetypes that describe them, and they may well match up with more than one.

Perhaps even more importantly, they can hold conflicting thoughts simultaneously and look at them from different angles. They typically love to knock things around with other really smart people and can easily navigate back and forth between the big picture and the granular details, counting both as equally important.

Knowing how one is wired is a necessary first step on any life journey. It doesn’t matter what you do with your life, as long as you are doing what is consistent with your nature and your aspirations.