Principles: Life and Work

by Ray Dalio

By comparing your outcomes with your goals, you can determine how to modify your machine.

The biggest mistake most people make is to not see themselves and others objectively, which leads them to bump into their own and others’ weaknesses again and again.

Successful people are those who can go above themselves to see things objectively and manage those things to shape change.

if you as the designer/manager discover that you as the worker can’t do something well, you need to fire yourself as the worker and get a good replacement, while staying in the role of designer/manager of your own life.

If you are disappointed because you can’t be the best person to do everything yourself, you are terribly naive.

Asking others who are strong in areas where you are weak to help you is a great skill that you should develop no matter what, as it will help you develop guardrails that will prevent you from doing what you shouldn’t be doing.

Because it is difficult to see oneself objectively, you need to rely on the input of others and the whole body of evidence.

If you are open-minded enough and determined, you can get virtually anything you want.

Don’t confuse what you wish were true with what is really true. 2. Don’t worry about looking good—worry instead about achieving your goals. 3. Don’t overweight first-order consequences relative to second- and third-order ones. 4. Don’t let pain stand in the way of progress. 5. Don’t blame bad outcomes on anyone but yourself.

Have clear goals. 2. Identify and don’t tolerate the problems that stand in the way of your achieving those goals. 3. Accurately diagnose the problems to get at their root causes. 4. Design plans that will get you around them. 5. Do what’s necessary to push these designs through to results.

Prioritize: While you can have virtually anything you want, you can’t have everything you want.

Decide what you really want in life by reconciling your goals and your desires.

If you limit your goals to what you know you can achieve, you are setting the bar way too low.

a. Great planners who don’t execute their plans go nowhere.

Your values determine what you want,

First and foremost, have humility so you can get what you need from others!

Humility can be even more valuable than having good mental maps if it leads you to seek out better answers than you could come up with on your own. Having both open-mindedness and good mental maps is most powerful of all.

To be effective you must not let your need to be right be more important than your need to find out what’s true.

Those who adapt do so by a) teaching their brains to work in a way that doesn’t come naturally

Open-mindedness doesn’t mean going along with what you don’t believe in; it means considering the reasoning of others instead of stubbornly and illogically holding on to your own point of view.

To be radically open-minded, you need to be so open to the possibility that you could be wrong that you encourage others to tell you so.

f. Remember that you’re looking for the best answer, not simply the best answer that you ...

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

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.

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.

Holding wrong opinions in one’s head and making bad decisions based on them instead of having thoughtful disagreements is one of the greatest tragedies of mankind.

1. Closed-minded people don’t want their ideas challenged.

2. Closed-minded people are more likely to make statements than ask questions.

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

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

5. Closed-minded people block others from speaking.

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

7. Closed-minded people lack a deep sense of humility.

The life that you will live is most simply the result of habits you develop.

I used to get angry and frustrated at people because of the choices they made, I came to realize that they weren’t intentionally acting in a way that seemed counterproductive; they were just living out things as they saw them, based on how their brains worked.

Having expectations for people (including yourself) without knowing what they are like is a sure way to get in trouble.

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.

The biggest difference between people who guide their own personal evolution and achieve their goals and those who don’t is that those who make progress reflect on what causes their amygdala hijackings.

Habit is probably the most powerful tool in your brain’s toolbox. It is driven by a golf-ball-sized lump of tissue called the basal ganglia at the base of the cerebrum. It is so deep-seated and instinctual that we are not conscious of it, though it controls our actions.

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.

if you stick with a behavior for approximately eighteen months, you will build a strong tendency to stick to it nearly forever.

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.

Brain plasticity is what allows your brain to change its “softwiring.”

The best way to change is through doing mental exercises.

Remember that accepting your weaknesses is contrary to the instincts of those parts of your brain that want to hold on to the illusion that you are perfect.

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.

Your greatest challenge will be having your thoughtful higher-level you manage your emotional lower-level you. The best way to do that is to consciously develop habits that will make doing the things that are good for you habitual.

Learning must come before deciding.

Listening to uninformed people is worse than having no answers at all.