Principles: Life and Work

by Ray Dalio

None of us is born knowing what is true; we either have to discover what’s true for ourselves or believe and follow others.

While mankind is very intelligent in relation to other species, we have the intelligence of moss growing on a rock compared to nature as a whole. We are incapable of designing and building a mosquito, let alone all the species and most of the other things in the universe. So I start from the premise that nature is smarter than I am and try to let nature teach me how reality works.

I now realize that nature optimizes for the whole, not for the individual, but most people judge good and bad based only on how it affects them.

Most people call something bad if it is bad for them or bad for those they empathize with, ignoring the greater good.

To be “good” something must operate consistently with the laws of reality and contribute to the evolution of the whole; that is what is most rewarded.

You will have to decide to what extent you will put the interests of others above your own, and which others you will choose to do so for.

Though most people think that they are striving to get the things (toys, bigger houses, money, status, etc.) that will make them happy, for most people those things don’t supply anywhere near the long-term satisfaction that getting better at something does.

This is why many people who have endured setbacks that seemed devastating at the time ended up as happy as (or even happier than) they originally were after they successfully adapted to them. The quality of your life will depend on the choices you make at those painful moments. The faster one appropriately adapts, the better.24 No matter what you want out of life, your ability to adapt and move quickly and efficiently through the process of personal evolution will determine your success and your happiness. If you do it well, you can change your psychological reaction to it so that what was painful can become something you crave.

This kind of relates to my "without pain there can be no pleasure" theory, but it feels like he would would think your baseline could be above/below your average? perhaps this is the beauty off continual evolution? Or the crashes do in fact balance the highs. Is my principle that human emotion auto-calibrates based on past pain and pleasure?

Whatever circumstances life brings you, you will be more likely to succeed and find happiness if you take responsibility for making your decisions well instead of complaining about things being beyond your control.

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 between those roles and that it is much more important that you are a good designer/manager of your life than a good worker in it, you will be on the right path. 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.

Asking other believable people about the root causes of your pain in order to enhance your reflections is also typically very helpful—especially others who have opposing views but who share your interest in finding the truth rather than being proven right.

c. Think about accuracy, not implications. It’s often the case that someone receiving critical feedback gets preoccupied with the implications of that feedback instead of whether it’s true. This is a mistake. As I’ll explain later, conflating the “what is” with the “what to do about it” typically leads to bad decision making. Help others through this by giving feedback in a way that makes it clear that you’re just trying to understand what’s true. Figuring out what to do about it is a separate discussion.