Principles: Life and Work

by Ray Dalio

Use “double-do” rather than “double-check” to make sure mission-critical tasks are done correctly.

Don’t put the expedient ahead of the strategic.

Remember that almost everything will take more time and cost more money than you expect.

By great character, I mean they are radically truthful, radically transparent, and deeply committed to the mission of the organization. By great capabilities, I mean they have the abilities and skills to do their jobs excellently. People who have one without the other are dangerous and should be removed from the organization. People who have both are rare and should be

the more caring we gave each other, the tougher we could be on each other, and the tougher we were on each other, the better we performed and the more rewards there were for us to share.

Each person at Bridgewater should act like an owner,

Radical transparency reduces harmful office politics and the risks of bad behavior because bad behavior is more likely to take place behind closed doors than out in the open.

Some people have called this way of operating radical straightforwardness.

in most companies people are doing two jobs: their actual job and the job of managing others’ impressions of how they’re doing their job. For us, that’s terrible.

If you are outside Bridgewater and thinking about how these principles might apply to your organization, this book is meant to prompt your thinking, not to give you an exact formula to follow. You don’t have to adopt all or any of these principles, though I do recommend that you consider them all.

Work is either 1) a job you do to earn the money to pay for the life you want to have or 2) what you do to achieve your mission, or some mix of the two. I urge you to make it as much 2) as possible, recognizing the value of 1). If you do that, most everything will go better than if you don’t.

To give you an idea of what radical truth and transparency look like, I’ll share a difficult situation we faced a few years ago when our Management Committee began thinking about reorganizing our back office. Our back office provides the services we need to support our trading in the markets, including trade confirmations, settlements, record maintenance, and accounting.

not telling people what’s really going on so as to protect them from the worries of life is like letting your kids grow into adulthood believing in the Tooth Fairy or Santa Claus.

While concealing the truth might make people happier in the short run, it won’t make them smarter or more trusting in the long run.

Integrity comes from the Latin word integritas, meaning “one” or “whole.” People who are one way on the inside and another way on the outside—i.e., not “whole”—lack integrity; they have “duality” instead.

Criticism is welcomed and encouraged at Bridgewater, but there is never a good reason to bad-mouth people behind their backs. It is counterproductive and shows a serious lack of integrity, it doesn’t yield any beneficial change, and it subverts both the person being badmouthed and the environment as a whole. Next to being dishonest, it is the worst thing you can do in our community.

Don’t get me wrong: Radical transparency isn’t the same as total transparency.

when I started taping all our meetings our lawyers told us we were crazy because we were creating evidence that could be used against us in court or by regulators such as the SEC. In response, I theorized that radical transparency would reduce the risk of our doing anything wrong—and of not dealing appropriately with our mistakes—and that the tapes would in fact protect

punitive.

Jeff Bezos described it well when he said, “You have to have a willingness to repeatedly fail. If you don’t have a willingness to fail, you’re going to have to be very careful not to invent.”

And everyone must understand the most fundamental principle for getting in sync, which is that people must be open-minded and assertive at the same time.

Many complaints either fail to take into account the full picture or reflect a closed-minded point of view.

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 person responsible for a decision must be able to explain the thinking behind it openly and transparently so that everyone can understand and assess it.

If either party to a disagreement is too emotional to be logical, the conversation should be deferred.

Debating takes time, and that time increases exponentially depending on the number of people participating in the discussion, so you have

to carefully choose the right people in the right numbers to suit the decision that needs to be made.

Watch out for assertive “fast talkers.”

Fast talkers are people who articulately and assertively say things faster than they can be assessed as a way of pushing their agenda past other people’s examination or objections.

to 5 is more than 20. Three to five smart, conceptual people seeking the right answers in an open-minded way will generally lead to the best answers.

It is far better to weight the opinions of more capable decision makers more heavily than those of less capable decision makers.

all views should be considered in an open-minded way, though placed in the proper context of the experiences and track records of the people expressing them.

intransigence.

Remember that everyone has opinions and they are often bad.

Opinions are easy to produce; everyone has plenty of them and most people are eager to share them—even to fight for them. Unfortunately many are worthless or even harmful, including a lot of your own.

If you ask someone a question, they will probably give you an answer, so think through to whom you should address your questions.

There will come a point in all processes of thinking things through when you are faced with the choice of requiring the person who sees things differently from you to slowly work things through until you see things the same way, or going along with the other person, even though their thinking still doesn’t seem to make sense. I recommend the first path when you are disagreeing about something important and the latter when it’s unimportant.

Don’t hold opinions about things you don’t know anything about.

It’s critical that conflicts actually get resolved—not through superficial compromise, but through seeking the important, accurate conclusions.

6.4 Once a decision is made, everyone should get behind it even though individuals may still disagree.

What I am saying is that in order to be effective, all groups that work together have to operate with protocols that allow time for disagreements to be explored, but in which dissenting minority parties recognize that group cohesion supersedes their individual desires once they have been overruled.

While all individuals have the right to have their own opinions, they do not have the right to render verdicts.

You know that there are a lot of incompetent people in the world trying to do things they’re not good at, so the chances are good that you are one of them.

At a high level, we look for people who think independently, argue open-mindedly and assertively, and above all else value the intense pursuit of truth and excellence, and through it, the rapid improvement of themselves and the organization.

Don’t design jobs to fit people; over time, this almost always turns out to be a mistake. This often happens when someone you are reluctant to let go doesn’t work out, and there is an inclination to try to find out what else that person can do. Frequently managers fail to be objective about their own strengths and weaknesses, and put themselves into roles that they’re not a click for.

the three C’s: character, common sense, and creativity.

Don’t use your pull to get someone a job.

They are like the parable of the blind men touching different parts of an elephant and arguing about what it is. Just think about how much better it would be if people were open-minded enough to realize that none of them have the complete picture.

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

If you’re looking for a visionary, pick a visionary