Principles: Life and Work

by Ray Dalio

so it’s always best to assume you’re missing something. This lesson changed my approach to decision making in ways that will reverberate throughout this book—and

gave me the humility I needed to balance my aggressiveness. I learned a great fear of being wrong that shifted my mind-set from thinking “I’m right” to asking myself “How do I know I’m right?” And I saw clearly that the best way to answer this question is by finding other independent thinkers who are on the same mission as me and who see things differently from me. By engaging them in thoughtful disagreement, I’d be able to understand their reasoning and have them stress-test mine.

people’s greatest weaknesses are the flip sides of their greatest strengths. For example, some people are prone to take on too much risk while others are too risk averse; some are too focused on the details while others are too big-picture. Most are too much one way and not enough another.

Making a handful of good uncorrelated bets that are balanced and leveraged well is the surest way of having a lot of upside without being exposed to unacceptable downside.

There is almost always a good path that you just haven’t figured out yet, so look for it until you find it rather than settle for the choice that is then apparent to you.

When faced with a choice between achieving their goal or pleasing (or not disappointing) others, they would choose achieving their goal every time.

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.

reason I believe you must be radically open-minded. Our biggest barriers for doing this well are our ego barrier and our blind spot barrier. The ego barrier is our innate desire to be capable and have others recognize us as such. The blind spot barrier is the result of our seeing things through our own subjective lenses; both

being radically open-minded requires you to have an accurate self-assessment of your own and others’ strengths and weaknesses.

To have an Idea Meritocracy: 1) Put your honest thoughts on the table 2) Have thoughtful disagreement 3) Abide by agreed-upon ways of getting past disagreement

Integrity comes from the Latin word integritas, meaning “one” or “whole.” People who are one way on the inside and another way on the outside—i.e., not “whole”—lack integrity;

Remember to reflect when you experience pain. Remember this: The pain is all in your head. If you want to evolve, you need to go where the problems and the pain are. By confronting the pain, you will see more clearly the paradoxes and problems you face.

Recognize that conflicts are essential for great relationships . . . . . . because they are how people determine whether their principles are aligned and resolve their differences. Everyone has his or her own principles and values, so all relationships entail a certain amount of negotiation or debate over how people should be with each other.

Watch out for the “Frog in the Boiling Water Syndrome.”