Principles: Life and Work

by Ray Dalio

All are able to see both big pictures and granular details (and levels in between) and synthesize the perspectives they gain at those different levels,

“For a long time,” he answered, “I’ve thought that it’s inevitable that something bad is going to happen on a planetary scale—

a plague, a meteor—that will require humanity to start over somewhere else,

At times, their extreme determination to achieve their goals can make them appear abrasive or inconsiderate, which was reflected in their test results.

Only true shapers consistently move from one success to another and sustain success over decades, and those are the people I want to bring to Bridgewater.

the same types of people in the same types of circumstances are going to produce the same types of results.

Their reluctance to probe hard to get at what people are like was making things more difficult.

Their understandings of how markets and economies work were oversimplified, like those of academics.

the nineteen countries of the European Union had to agree with each other before they could act—in many cases unanimously.

Luis de Guindos, a man I learned to admire for his forthrightness, intelligence, and heroic willingness to sacrifice himself for his country’s well-being.

at large numbers of “heroes” from different cultures—some real and some mythical—and describes their archetypal journeys through life. Campbell’s description of how heroes become heroes aligned with my thinking about shapers. And it gave me powerful insights about the heroes I know and the patterns of my own life.

A hero is someone who “found or achieved or [did] something beyond the normal range of achievement,” and who “has given his life to something bigger than himself

They typically start out leading ordinary lives in an ordinary world and are drawn by a “call to adventure.” This leads them down a “road of trials” filled with battles, temptations, successes, and failures. Along the way, they are helped by others, often by those who are further along the journey and serve as mentors, though those who are less far along also help in various ways. They also gain allies and enemies and learn how to fight, often against convention. Along the way, they encounter temptations and have

clashes and reconciliations with their fathers and their sons. They overcome their fear of fighting because of their great determination to achieve what they want, and they gain their “special powers” (i.e., skills) from both “battles” that test and teach them, and from gifts (such as advice) that they receive from others. Over time, they both succeed and fail, but they increasingly succeed more than they fail as they grow stronger and keep striving for more, which leads to ever-bigger and more challenging battles.

“belly of the whale” experience) that tests whether they have the resilience to come back and fight smarter and with more determination. If they do, they undergo a change (have a “metamorphosis”) in which they experience the fear that protects them, without losing the aggressiveness that propels them forward.

second phase in life to the third phase (in which one is free to savor life until one passes away).

being a hero is typically not all it’s cracked up to be—they get beat up a lot, and many are attacked, humiliated, or killed even after they triumph.

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students fall into one of these two categories, which was shocking because most will probably become adults who will suffer and be burdens on

in this case not knowing how to transition out of the founder-leader role.

which gave me a healthy

respect for history, a hunger to have a universal understanding of how reality works,

them. I came to understand that my encounters were tests of my character and

creativity.

I saw pain as nature’s reminder that there is something important for me to learn.

Even after they surpass their wildest dreams, they still experience more struggle than glory. This has certainly been true for me.

satisfaction of success doesn’t come from achieving your goals, but from struggling well.

struggling well doesn’t just make your ups better; it makes your downs less bad.

Having the basics—a good bed to sleep in, good relationships, good food, and good sex—is most important,

And the people one meets at the top aren’t necessarily more special than those one meets at the bottom or in between.

Being on top gives you a wider range of options, but it also requires more of you.

What I have seen is that the happiest people discover their own nature and match their life to it.

This is my attempt to help you succeed by passing along to you what I learned about how to struggle well—or, at the very least, to help you get the most out of each unit of effort you put in.

Reality, in turn, will send you loud signals about how well your principles are working by rewarding or punishing you, so you will learn to fine-tune them accordingly.

but you will also start to build a list of the things you need to think about and have principles for.

I suggest that you think through all the principles available to you from different sources and put together a collection of your own that you can turn to whenever reality sends “another one of those” your way.

If I can reconcile my emotions with my logic and only act when they are aligned, I make better decisions.

But I keep that pain in perspective, knowing that I will get through these setbacks and that most of my learning will come from reflecting on them.14

I believe that with practice you can change your habits and experience the same “mistake learner’s high.”

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

Dreams + Reality + Determination = A Successful

That’s bad, because it is more important to understand and deal with the bad stuff since the good stuff will take care of itself.

Learning is the product of a continuous real-time feedback loop in which we make decisions, see their outcomes, and improve our understanding of reality as a result.

Yet if you don’t put yourself out there with your radical transparency, you won’t learn.

Besides giving me the freedom to be me, it has allowed me to understand others and for them to understand me, which is much more efficient and much more enjoyable than not having this understanding.

have found that it typically takes about eighteen months, which is how

long it takes to change most habits.

So I start from the premise that nature is smarter than I am and try to let nature teach me how reality works.

I assume that I’m wrong and try to figure out why what nature is doing makes sense.

That perspective drove me to consider the second- and third-order consequences so that I could see that the world would be worse. I now realize that nature optimizes for the whole, not for the individual,