Principles: Life and Work

by Ray Dalio

Think for yourself to decide 1) what you want, 2) what is true, and 3) what you should do to achieve #1 in light of #2 . .

My painful mistakes shifted me from having a perspective of “I know I’m right” to having one of “How do I know I’m right?”

Successful people change in ways that allow them to continue to take advantage of their strengths while compensating for their weaknesses and unsuccessful people don’t.

I urge you to be curious enough to want to understand how the people who see things differently from you came to see them that way.

we can see that much of what we call human nature is really animal nature. That’s because the human brain is programmed with millions of years of genetic learning that we share with other species.

perfection doesn’t exist; it is a goal that fuels a never-ending process of adaptation.

One of the hardest things for people to do is to objectively look down on themselves within their circumstances (i.e., their machine) so that they can act as the machine’s designer and manager. Most people remain stuck in the perspective of being a worker within the machine. If you can recognize the differences

To be successful, the “designer/manager you” has to be objective about what the “worker you” is really like, not believing in him more than he deserves, or putting him in jobs he shouldn’t be in.

When encountering your weaknesses you have four choices: 1. You can deny them (which is what most people do). 2. You can accept them and work at them in order to try to convert them into strengths (which might or might not work depending on your ability to change). 3. You can accept your weaknesses and find ways around them. 4. Or, you can change what you are going after.

When a problem stems from your own lack of talent or skill, most people feel shame. Get over it. I cannot emphasize this enough: Acknowledging your weaknesses is not the same as surrendering to them. It’s the first step toward overcoming them. The pains you are feeling are “growing pains” that will test your character and reward you as you push through them.

You need to develop a fierce intolerance of badness of any kind, regardless of its severity.

The two biggest barriers to good decision making are your ego and your blind spots.

Sincerely believe that you might not know the best possible path and recognize that your ability to deal well with “not knowing” is more important than whatever it is you do know.

people seem to think that considering opposing views will somehow threaten their ability to decide what they want to do. Nothing could be further from the truth. Taking in others’ perspectives in order to consider them in no way reduces your freedom to think independently and make your own decisions.

People interested in making the best possible decisions are rarely confident that they have the best answers.

In thoughtful disagreement, both parties are motivated by the genuine fear of missing important perspectives. Exchanges in which you really see what the other person is seeing and they really see what you are seeing—with both your “higher-level yous” trying to get to the truth—are immensely helpful and a giant source of untapped potential.

Closed-minded people focus much more on being understood than on understanding others. When people disagree, they tend to be quicker to assume that they aren’t being understood than to consider whether they’re the ones who are not understanding the other person’s perspective. Open-minded people always feel compelled to see things through others’ eyes.

to crowd out those of others. 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.

Most people do not look thoughtfully at the facts and draw their conclusions by objectively weighing the evidence. Instead, they make their decisions based on what their deep-seated subconscious mind wants and then they filter the evidence to make it consistent with those desires.

This!

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

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.

Find out who is responsible for whatever you are seeking to understand and then ask them. Listening to uninformed people is worse than having no answers at all.

Perfectionists spend too much time on little differences at the margins at the expense of the important things.

c. Don’t mistake possibilities for probabilities. Anything is possible. It’s the probabilities that matter. Everything must be weighed in terms of its likelihood and prioritized. People who can accurately sort probabilities from possibilities are generally strong at “practical thinking”; they’re the opposite of the “philosopher” types who tend to get lost in clouds of possibilities.

• Think for yourself to decide 1) what you want, 2) what is true, and 3) what you should do to achieve #1 in light of #2, and do that with humility and open-mindedness so that you consider the best thinking available to you. LIFE

Power should lie in the reasoning, not the position, of the individual. The best ideas win no matter who they come from.

Each person at Bridgewater should act like an owner, responsible for operating in this way and for holding others accountable to operate in this way.

I believe that great cultures, like great people, recognize that making mistakes is part of the process of learning, and that continuous learning is what allows an organization to evolve successfully over time. In

Realize that you have nothing to fear from knowing the truth.

Never say anything about someone that you wouldn’t say to them directly and don’t try people without accusing them to their faces.

At Bridgewater, we expect people to behave in a manner that is consistent with how people in high-quality, long-term relationships behave—

It is more inconsiderate to prevent people from exercising their rights because you are offended by them than it is for them to do whatever it is that offends you.

understanding how