Principles: Life and Work

by Ray Dalio

it’s smarter and ultimately better for you to be open-minded and have faith that the consensus of believable others is better than whatever you think.

A typical neuron makes about ten thousand connections to neighboring neurons. Given billions of neurons, this means that there are as many connections in a single cubic centimeter of brain tissue as there are stars in the Milky Way galaxy.

Dalai Lama’s book, Beyond Religion,

Research suggests that if you stick with a behavior for approximately eighteen months, you will build a strong tendency to stick to

In all aspects of life, what’s happening today seems like a much bigger deal than it will appear in retrospect.

our educational system is hung up on precision, the art of being good at approximations is insufficiently valued.

“When you ask someone whether something is true and they tell you that it’s not totally true, it’s probably by-and-large true.”

As Carl Jung put it, “Until you make the unconscious conscious, it will direct your life and you will call it fate.”

Anything is possible. It’s the probabilities that matter. Everything

(the term “artificial intelligence” was first introduced in 1956 at a conference at Dartmouth College).

the value of a widely known insight disappears over time.

it was when the number of people at Bridgewater passed sixty-seven. Up until then, I had personally chosen each employee’s holiday gift and written them a lengthy personalized card, but trying to do it that year broke my back.

many opinions are bad and virtually everyone is confident that theirs are good,

As Winston Churchill said, “There is no worse course in leadership than to hold out false hopes soon to be swept away.”

People need to face harsh and uncertain realities if they are going to learn how to deal with them—and you’ll learn a lot about the people around you by seeing how well they do.

build an error log (we now call it the Issue Log), in which traders recorded all their mistakes and bad outcomes so we could track them and address them

Anyone you see succeeding is only succeeding at the things you’re paying attention to—I guarantee they are also failing at lots of other things.

Get over “blame” and “credit” and get on with “accurate” and “inaccurate.” Worrying about “blame” and “credit” or “positive” and “negative” feedback impedes the iterative process that is essential to learning. Remember that what has already happened lies in the past and no longer matters except as a lesson for the future. The need for phony praise needs to be unlearned.

Because these moments of pain are so important, you shouldn’t rush through them.

is never acceptable to get upset if the idea meritocracy doesn’t produce the decision that you personally wanted.

those who change their minds are the biggest winners because they learned something, whereas those who stubbornly refuse to see the truth are losers.

The two-minute rule specifies that you have to give someone an uninterrupted two minutes to explain their thinking before jumping in with your own.

Having a hierarchy of merit is not only consistent with an idea meritocracy but essential for it. It’s simply not possible for everyone to debate everything all the time and still get their work done.

This phenomenon is called the narcissism of small differences. Take the Protestants and Catholics. Though both are followers of Christ, some of them have been fighting for hundreds of years, even though many of them are unable to articulate the differences that divide them,

long as you bear the consequences of failure, you are the ultimate Responsible Party. For example, while you might choose to delegate the responsibility of figuring out how to handle your illness to a doctor, it is your responsibility to pick the right one, since you will bear the consequences if he does a bad job.

Make sure that everyone has someone they report to. Even a company’s owners have bosses,

Remember that people tend to pick people like themselves, so choose interviewers who can identify what you are looking for.

You don’t want people to accept a job for the security of making a lot more money—you want them to come for the opportunity to earn it through hard and creative work.

the only purpose of money is to get you what you want, so think hard about what you value and put it above money.

It’s often the case that someone receiving critical feedback gets preoccupied with the implications of that feedback instead of whether it’s true.

Radical truth doesn’t require you to be negative all the time.

If you ask everybody in an organization what percentage of the organization’s success they’re personally responsible for, you’ll wind up with a total of about 300 percent.

puzzling that interviewers freely and confidently criticize job candidates without knowing them well but won’t criticize employees for similar weaknesses even though they have more evidence.

a great manager is essentially an organizational engineer.

the higher up you are in an organization, the more important vision and creativity become, but you still must have the skills required to manage/orchestrate well.

Remember that for every case you deal with, your approach should have two purposes . . . . . . 1) to move you closer to your goal, and 2) to train and test your machine (i.e., your people and your design). The

Managing the people who report to you should feel like skiing together.

there’s danger in thinking you’re delegating details when you’re actually being too distant from what’s important and essentially are not managing.

Job slip is when a job changes without being explicitly thought through and agreed to, generally because of changing circumstances or a temporary necessity. Job slip often leads to the wrong people handling the wrong responsibilities and confusion over who is supposed to do what.

If you ask a high-level question like “How is goal XYZ going?” a good answer will provide a synthesis up-front of how XYZ is going overall and, if needed, will support it by accounting for the tasks that were done to achieve it. People who see the tasks and lose sight of the goals will just describe the tasks that were done.

If you see something that seems unacceptable to you, don’t assume that the fact that others also know about it and aren’t screaming means it’s not a problem.

An organization is the opposite of a building: Its foundation is at the top, so make sure you hire managers before you hire their reports.

Double-checking has a much higher rate of errors than double-doing, which is having two different people do the same task so that they produce two independent answers.

a position is part-time and requires highly specialized knowledge, I would prefer to have it done by consultants or outsiders.

I typically work at about 50:1 leverage, meaning that for every hour I spend with each person who works for me, they spend about fifty hours working to move the project along. At

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Winston Churchill hit the nail on the head when he said, “Success consists of going from failure to failure without loss of enthusiasm.”

there’s a big difference between wanting to do something and actually being able to do it. Assuming people will do what they intellectually want to do is like assuming that people will lose weight simply because they understand why it’s beneficial for them to do