Principles: Life and Work

by Ray Dalio

I’m passing along these principles because I am now at the stage in my life in which I want to help others be successful rather than to be more successful myself.

Principles are fundamental truths that serve as the foundations for behavior that gets you what you want out of life. They can be applied again and again in similar situations to help you achieve your goals.

If you can think for yourself while being open-minded in a clearheaded way to find out what is best for you to do, and if you can summon up the courage to do it, you will make the most of your life.

I learned my principles over a lifetime of making a lot of mistakes and spending a lot of time reflecting on them.

Since I was a kid, I’ve been a curious, independent thinker who ran after audacious goals. I got excited about visualizing things to go after, had some painful failures going after them, learned principles that would prevent me from making the same sort of mistakes again, and changed and improved, which allowed me to imagine and go after even more audacious goals and do that rapidly and repeatedly for a long time.

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?” They gave me the humility I needed to balance my audacity.

We believe that thoughtful, unemotional disagreement by independent thinkers can be converted into believability-weighted decision making that is smarter and more effective than the sum of its parts.

Learning how reality works, visualizing the things I want to create, and then building them out is incredibly exciting to me.

Being hyperrealistic will help you choose your dreams wisely and then achieve them.

People who achieve success and drive progress deeply understand the cause-effect relationships that govern reality and have principles for using them to get what they want.

Being radically transparent and radically open-minded accelerates this learning process.

So whenever I’m faced with the choice, my instinct is to be transparent.

In contrast with animals, most people struggle to reconcile their emotions and their instincts (which come from the animal parts of their brains) with their reasoning (which comes from parts of the brain more developed in humans).

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

Everything from the smallest subatomic particle to the entire galaxy is evolving. While everything apparently dies or disappears in time, the truth is that it all just gets reconfigured in evolving forms. Remember that energy can’t be destroyed—it can only be reconfigured. So the same stuff is continuously falling apart and coalescing in different forms. The force behind that is evolution.

Evolution is good because it is the process of adaptation that generally moves things toward improvement. All things such as products, organizations, and human capabilities evolve through time in a similar way. It is simply the process by which things either adapt and improve or die.

world is littered with once-great things that deteriorated and failed; only a rare few have kept reinventing themselves to go on to new heights of greatness.

From this perspective, 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. Organisms, organizations, and individual people are always highly imperfect but capable of improving.

For me personally, I now find it thrilling to embrace reality, to look down on myself through nature’s perspective, and to be an infinitesimally small part of the whole. My instinctual and intellectual goal is simply to evolve and contribute to evolution in some tiny way while I’m here and while I am what I am.

reality is built to optimize for the whole rather than for me.

Maximize your evolution.

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

1.7 Pain + Reflection = Progress.

You need to get over all that and stop seeing struggling as something negative. Most of life’s greatest opportunities come out of moments of struggle;

Once you identify a problem, don’t tolerate it. Tolerating a problem has the same consequences as failing to identify it.

if you don’t have the will to succeed, then your situation is hopeless. You need to develop a fierce intolerance of badness of any kind, regardless of its severity.

Too many people make the mistake of spending virtually no time on designing because they are preoccupied with execution. Remember: Designing precedes doing!

There are many successful, creative people who aren’t good at execution. They succeed because they forge symbiotic relationships with highly reliable task-doers.

Everyone has weaknesses. They are generally revealed in the patterns of mistakes they make. Knowing what your weaknesses are and staring hard at them is the first step on the path to success.

Having both open-mindedness and good mental maps is most powerful of all.

Your deepest-seated needs and fears—such as the need to be loved and the fear of losing love, the need to survive and the fear of not surviving, the need to be important and the fear of not mattering—reside in primitive parts of your brain such as the amygdala, which are structures in your temporal lobe that process emotions.

For me, there is really only one big choice to make in life: Are you willing to fight to find out what’s true? Do you deeply believe that finding out what is true is essential to your well-being? Do you have a genuine need to find out if you or others are doing something wrong that is standing in the way of achieving your goals?

To help you, I recommend that you write down your three most harmful habits. Do that right now. Now pick one of those habits and be committed to breaking it. Can you do that? That would be extraordinarily impactful. If you break all three, you will radically improve the trajectory of your life.

The most valuable habit I’ve acquired is using pain to trigger quality reflections.

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. Having spent time with some of the richest, most powerful, most admired people in the world, as well as some of the poorest, most disadvantaged people in the most obscure corners of the globe, I can assure you that, beyond a basic level, there is no correlation between happiness levels and conventional markers of success. A carpenter who derives his deepest satisfaction from working with wood can easily have a life as good or better than the president of the United States. If you’ve learned anything from this book I hope it’s that everyone has strengths and weaknesses, and everyone has an important role to play in life. Nature made everything and everyone for a purpose. The courage that’s needed the most isn’t the kind that drives you to prevail over others, but the kind that allows you to be true to your truest self, no matter what other people want you to be.