Principles: Life and Work

by Ray Dalio

d. Choose your hab...

Research suggests that if you stick with a behavior for approximately eighteen months, you will build a strong tendency to stick to it nearly forever.

Then I read Charles Duhigg’s best-selling book The Power of Habit, which really opened my eyes. I recommend that you read

Repetition reinforces this loop until over time it becomes automatic. This anticipation and craving is

the key to what animal trainers call operant conditioning, which is a method of training that uses positive reinforcement. For example, dog trainers use a sound (typically a clicker) to reinforce behavior by pairing that sound with a more desirable reward (typically food) until the dog will perform the desired behavior when it merely hears the click.

Habits put your brain on “automatic pilot.” In neuroscientific terms, the basal ganglia takes over from your cortex, so that you can execute activities without even thinking about them.

Reading Duhigg’s book taught me that if you really want to change, the best thing you can do is choose which habits to acquire and which to get rid of and then go about doing that. 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. Or you can pick habits that you want to acquire and then acquire them.

The most valuable habit I’ve acquired is using pain to trigger quality reflections. If you can acquire this habit yourself, you will learn what causes your pain and what you can do about it, and i...

e. Train your “lower-level you” with kindness and persistence to build the right habits. I used to think that the upper-level you needed to fight with the lower-level you to gain control, but...

train that subconscious, emotional you the same way you would teach a child to behave the way you would like him or her to behave—with loving kindness and persis...

f. Understand the differences between right-brained and left-br...

1. The left hemisphere reasons sequentially, analyzes details, and excels at linear analysis. “Left-brained” or “linear” thinkers who are analytically strong are often called “bright.” 2. The right hemisphere thinks across categories, recognizes themes, and synthesizes the big picture. “Right-brained” or “lateral” thinkers with more street smarts are often called “smart.”

Our experience has been that left-brained folks tend to see right-brained folks as “spacey” or “abstract,” while right-brained thinkers tend to find left-brained thinkers “literal” or “narrow.” I have seen wonderful results occur when people know where their own and others’ inclinations lie, realize that both ways of thinking are invaluable, and assign responsibilities accordingly.

g. Understand how much the brain can and cannot change.

The best way to change is through doing

mental exercises. As with physical exercise, this can be painful unless you enlist the habit loop discussed earlier to connect the rewards to the actions, “rewiring” your brain to love learning and beneficial change.

Instead of expecting yourself or others to change, I’ve found that it’s often most effective to acknowledge one’s weaknesses and create explicit guardrails against them. This is typically a faster and higher-probability path to success.

4.4 Find out what you and others are like.

Psychometric assessments are much more reliable. They are important in helping explore how people think during the hiring process and throughout employment.

Fortunately, we don’t have to make that choice. The four main assessments we use are the Myers-Briggs Type Indicator (MBTI), the Workplace Personality Inventory, the Team Dimensions Profile, and Stratified Systems Theory.

a. Introversion vs. extroversion. Introverts focus on the inner world and get their energy from ideas, memories, and experiences while extroverts are externally focused and get their energy from being with people.

own. I’ve found that it is important to help each communicate in the way that they feel most comfortable. For example,

introverts often prefer communicating in writing (such as email) rather than speaking in group settings and tend to be less open with their critical thoughts.

b. Intuiting vs. ...

Some people see big pictures (forests) and others see...

person than an intuitor preparing your legal documents, where every “i” must be properly dotted and every “t” crossed

c. Thinking vs. feeling. Some people make decisions based on logical analysis of objective facts, considering all the known, provable factors important to a given situation and using logic to determine the best course of action. This approach is an indicator of a preference for thinking

Other people—who prefer feeling—focus on harmony between people. They are better suited to roles that require lots of empathy, interpersonal contact, and relationship ...

d. Planning vs. perceiving.

Planners (or “Judgers” in Myers-Briggs terms) like to focus on a plan and stick with it, while perceivers are prone to focus on what’s happening around them and adapt to it.

Perceivers work from the outside in; they see things happening and work backward to understand the cause and how to respond; they also see many

possibilities that they compare and choose from—often so many that they...

In contrast, planners work from the inside out, first figuring out what they want to achieve and then how things should unfold. Planners and perceivers have trouble appreciating each other. Perceivers see new things and change direction often. This is discomforting to planners, who weigh precedent much more heavily in their decision making, and assume if it was done in a certain way before, it should be done in t...

e. Creators vs. refiners vs. advancers vs. execut...

By identifying talents and preferences that lead people to feel a particular way, you can place them in jobs ...

Creators generate new ideas and original concepts. They prefer unstructured and abstract activities and thrive on innovation and unconventional practices. • Advancers communicate these new ideas and carry them forward. They relish feelings and relationships and manage the human factors. They are excellent at generating enthusiasm for work. • Refiners challenge ideas. They analyze projects for flaws, then refine them with a focus on objectivity and analysis. They love facts and theories and working with a systematic approach. • Executors can also be thought of as Implementers. They ensure that important activities are carried out and goals accomplished; they are focused on details and the bottom line. • Flexors are a combination of all four types. They

can adapt their styles to fit certain needs and are able to look at a problem from a variety of perspectives.

f. Focusing on tasks vs. focusing on goals. Some people are focused on daily tasks while others are focused on their goals and how to achieve them.

In contrast, those who tend to focus on daily tasks are better at managing things that don’t change much or that require processes to be completed reliably.

On the other hand, they’re typically more reliable.

g. Workplace Personality Inventory.

Another assessment we use is the Workplace Personality Inventory,

a test based on data from the U.S. Depart...

It anticipates behavior and predicts job fit and satisfaction, singling out certain key characteristics/qualities, including persistence, independence, stress tolerance, and analytical thinking. This test helps us understand what peopl...

someone with low Achievement Orientation and high Concern for Others might be unwilling to step on others’ toes in order to accomplish their goals. Likewise, someone who is bad at Rule F...

Individual people will always be more complex than the archetypes that describe them,

While I won’t go over all of them, I will describe Shapers—the one that best represents me—in some depth.

h. Shapers are people who can go from visualization to actualization.

I use the word to mean someone who comes up with unique and valuable visions and builds them out beautifully, typically over the doubts of others.

Shapers get both the big picture and the details right.