Principles: Life and Work

by Ray Dalio

the greatest success you can have as the person in charge is to orchestrate others to do things well without you. A step below that is doing things well yourself, and worst of all is doing things poorly yourself.

“Unattainable goals appeal to heroes,”

“Capable people are those who sit there worrying about the future. The unwise are those who worry about nothing. If conflicts got resolved before they became acute, there wouldn’t be any heroes.”

A hero is someone who “found or achieved or [did] something beyond the normal range of achievement,” and who “has given his life to something bigger than himself or other than himself.”

Figuring out how to best give away money is as complex an undertaking as figuring out how to make it.

We view our donations as investments and want to make sure that we have high philanthropic returns on our money.

what I didn’t know was much greater than what I did,

Simply put, governance is the system of checks and balances ensuring that an organization will be stronger than whoever happens to be leading it at any one time.

I had learned that it’s wrong to assume either that a person in one role will be successful in another role

I realized that the satisfaction of success doesn’t come from achieving your goals, but from struggling well.

I can say that being strong is better than being weak, and that struggling gives one strength.

Having good principles for dealing with the realities we encounter is the most important driver of how well we handle them.

Embrace Reality and Deal with It

reconcile my emotions with my logic and only act when they are aligned, I make better decisions.

Understanding, accepting, and working with reality is both practical and beautiful.

Dreams + Reality + Determination = A Successful Life.

Truth—or, more precisely, an accurate understanding of reality—is the essential foundation for any good outcome.

Be radically open-minded and radically transparent.

Learning is the product of a continuous real-time feedback loop in which we make decisions, see their outcomes, and improve our understanding of reality as a result.

Don’t let fears of what others think of you stand in your way.

Embracing radical truth and radical transparency will bring more meaningful work and more meaningful relationships.

Look to nature to learn how reality works.

I start from the premise that nature is smarter than I am and try to let nature teach me how reality works.

Don’t get hung up on your views of how things “should” be because you will miss out on learning how they really are.

Whenever I observe something in nature that I (or mankind) think is wrong, I assume that I’m wrong and try to figure out why what nature is doing makes sense.

nature optimizes for the whole, not for the individual, but most people judge good and bad based only on how it affects them.

To be “good” something must operate consistently with the laws of reality and contribute to the evolution of the whole; that is what is most rewarded.

Evolution is the single greatest force in the universe; it is the only thing that is permanent and it drives everything.

we can see that perfection doesn’t exist; it is a goal that fuels a never-ending process of adaptation. If nature, or anything, were perfect it wouldn’t be evolving.

Evolve or die.

The key is to fail, learn, and improve quickly.

Evolving is life’s greatest accomplishment and its greatest reward.

The individual’s incentives must be aligned with the group’s goals.To

Reality is optimizing for the whole—not for you.

Realize that you are simultaneously everything and nothing—and decide what you want to be.

we are unbelievably tiny and short-lived and no matter what we accomplish, our impact will be insignificant. At the same time, we instinctually want to matter and to evolve, and we can matter a tiny bit—and it’s all those tiny bits that add up to drive the evolution of the universe.

What you will be will depend on the perspective you have.

Understand nature’s practical lessons.

Once we get the things we are striving for, we rarely remain satisfied with them.

the need to have meaningful work is connected to man’s innate desire to improve.

It is a fundamental law of nature that in order to gain strength one has to push one’s limits, which is painful.

Pain + Reflection = Progress.

The challenges you face will test and strengthen you. If you’re not failing, you’re not pushing your limits, and if you’re not pushing your limits, you’re not maximizing your potential.

The higher you ascend, the more effective you become at working with reality to shape outcomes toward your goals. What once seemed impossibly complex becomes simple.

Go to the pain rather than avoid it.

you have the opportunity to choose healthy and painful truth or unhealthy but comfortable delusion.

Embrace tough love.

Own your outcomes.

Life doesn’t give a damn about what you like. It’s up to you to connect what you want with what you need to do to get it and then find the courage to carry it through.

Think of yourself as a machine operating within a machine and know that you have the ability to alter your machines to produce better outcomes.