Principles: Life and Work

by Ray Dalio

For example, one of my kids was struggling with arithmetic. Because he tested well in mathematical reasoning, she correctly told him that if he pushed through the boredom of rote memorization required in elementary school, he would love the higher-level concepts he would be exposed to when he got older. These insights opened my eyes to new possibilities. I turned to her and others years later when I was trying to figure out the different thinking styles of my employees and colleagues.

but why creative genius often exists at the edge of insanity.

Similarly, a task-oriented person who is great with details might undervalue creativity—and worse still, may squelch it in the interests of efficiency.

Baseball Cards,

By recording these qualities in people’s Baseball Cards, others who’d never worked with them before could know what to expect from them.

Naturally when I introduced this tool, people were skeptical or scared of it for various reasons.

Brain plasticity is what allows your brain to change its “softwiring.”

Buddhist monks who had practiced more than ten thousand hours of meditation,

measured significantly higher levels of gamma waves in their brains;

train yourself to be more creative, but if you’re not naturally creative, there’s likely a limit to what you can do.

would choose the assessments. Fortunately, we don’t have to make that choice.

They typically make the most visionary leaders because of their

ability to take a broad view and see the whole picture.

Shapers get both the big picture and the details right. To me, it seems that Shaper = Visionary + Practical Thinker + Determined.

They typically love to knock things around with other really smart people and can easily navigate back and forth between the big picture and the granular details, counting both as equally important.

Knowing how one is wired is a necessary first step on any life journey.

it’s that everyone has strengths and weaknesses, and everyone has an important role to play in life.

but the kind that allows you to be true to your truest self, no matter what other people want you to be.

including a project manager who was less engaged with the concepts and much more focused on the details of specific tasks and deadlines.

planful, concrete, and driving things to completion, which were areas of weakness for Bob.

Learning must come before deciding.

Remind yourself that it’s never harmful to at least hear an opposing point of view.

After a while, you will just naturally and open-mindedly gather all the relevant info, but in doing so you will have avoided the first pitfall of bad decision making, which is to subconsciously make the decision first and then cherry-pick the data that supports it.

being able to synthesize accurately and knowing how to navigate levels.

triangulate your views with people who you know synthesize well. This raises your chances of having a good synthesis,

without great fear of being wrong.

The key is having the higher-level perspective to make fast and accurate judgments on what the real risks are without getting bogged down in details.

Listening to uninformed people is worse than having no answers at all.

Many will state them as if they are facts. Don’t mistake opinions for facts.

That’s why it helps to step back to gain perspective and sometimes defer a decision until some time passes.

In my opinion, it is smarter to choose the great over the new.

Understand the concept of “by-and-large” and use approximations.

This impedes conceptual thinking.

Understanding this rule saves you from getting bogged down in unnecessary detail once you’ve gotten most of the learning you need to make a good decision.

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

We are constantly seeing things at different levels and navigating between them,

An above-the-line

line conversation addresses the main points and a below-the-line conversation focuses on the sub-points.

4. Diagram the flow of your thought processes using the outline template shown on the previous page.

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

Successful

organizations have cultures in which evidence-based decision making is the norm rather than the exception.

“It never hurts to ask.”

As it turned out, not only was he willing to sell, he was willing to give me a loan!

That’s why it pays to stress-test your thinking, even when you’re pretty sure you’re right.

making. You can significantly improve your track record if you only make the bets that you are most confident will pay off.

Some decisions are best made after acquiring more information; some are best made immediately.

You can use your own principles, or you can use others’; you just want to use the best ones possible well. If you think that way constantly, you will become an excellent principled thinker.

If you disagree on the principles, try to work through your disagreement based on your respective believabilities.

But it’s almost certainly true that you’d do it a lot better if you gave more thought to it.