Principles: Life and Work

by Ray Dalio

To me, it seems that Shaper = Visionary + Practical Thi...

I’ve found that shapers tend to share attributes such as intense curiosity and a compulsive need to make sense of things, independent thinking that verges on rebelliousness, a need to dream big and unconventionally, a practicality and determination to push through all obstacles to achieve their goals, and a knowledge of their own and others’ weaknesses and strengths so they can orchestrate teams to achieve them. Perhaps even more importantly, they can hold conflicting thoughts simultaneously and look at them from different angles. They typically love to knock things around with ...

never succeed without working with others who are more naturally suited for other things and whose ways of

thinking and acting are also essential.

4.5 Getting the right people in the right roles in support of your goal is the key to succeeding at whatever you choose to accomplish.

a. Manage yourself and orchestrate others to get what you want.

Your greatest challenge will be having your thoughtful higher-level you manage your emotional lower-level you. The best way to do that is to consciously develop habits that will make doing the things that are good for you habitual.

Each must not only perform at their personal best but work together so the orchestra becomes more than the sum of its parts.

While Bob was a great intellectual partner to me in understanding the big-picture problem we wanted to solve, he was much weaker at visualizing the process required to get us from where we were to the solution.

Comparing the new deputy’s Baseball Card to the original deputy’s, she excelled in independent and systematic thinking, which were essential for having a clear picture of what to do with Bob’s big ideas.

Some decisions you should make yourself and some you should delegate to someone more believable. Using self-knowledge to know which are which is the key to success—no matter what it is you are trying to do.

29 Lots of data show that relationships are the greatest reward—that they’re more important to your health and happiness than anything else.

Harvard’s seventy-five-year Grant and

Glueck study of adult males from a variety of socioeconomic backgrounds, puts it, “You could have all the money you’ve ever wanted, a successful career, and be in good physical health, but without loving relationships, you won’t be happy . . . The good life is built with g...

34 If you’d like to experience some of these assessments for yourself and see your own results, visit assessments.principles.com.

I prefer to use “Planning” as judging

5 Learn How to Make Decisions Effectively

the processes that go into everyday decision making are subconscious and more complex than is widely understood.

Now think about the challenge of making all of your decisions well, in a systematic, repeatable way, and then being able to describe the processes so clearly and precisely that anyone else can make the same quality decisions under the same circumstances. That is what I aspire to do and have found to be invaluable, even when highly imperfect.

5.1 Recognize that 1) the biggest threat to good decision making is harmful emotions, and 2) decision making is a two-step process (first learning and then deciding).

Learning must come before deciding. As

explained in Chapter One, your brain stores different types of learning in your subconscious, your rote...

But no matter how you acquire your knowledge or where you store it, what’s most important is that what you know paints a true and rich picture of the...

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

Deciding is the process of choosing which knowledge should be drawn upon

the facts of this particular “what is” and your broader understanding of the cause-effect machinery that underlies it—and then weighing them to determine a c...

This involves playing different scenarios through time to visualize how to get an outcome con...

used to literally ask myself questions: Am I learning? Have I learned enough yet that it’s time for deciding? 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. But how does one learn well?

LEARNING WELL For me, getting an accurate picture of reality ultimately comes down to two things: being able to synthesize accurately and knowing how to navigate levels.

Synthesis is the process of converting a lot of data into an accurate picture. The quality of your synthesis will determine the quality of your decision making. This is why it always pays to triangulat...

To synthesize well, you must 1) synthesize

the situation at hand, 2) synthesize the situation through time, and 3) navigate levels effectively.

5.2 Synthesize the situati...

To be effective, you need to be able to tell which dots are important and which dots are not.

a. One of the most important decisions you can make is who you ask questions of.

Make sure they’re fully informed and believable. Find

Listening to uninformed people is worse than having n...

b. Don’t believe everythin...

Don’t mistake opinions for facts.

c. Everything looks bigger up close.

what’s happening today seems like a much bigger deal than it will ...

d. New is overvalued relative to great.

are you drawn to proven classics or the newest big thing? In my opinion, it is smarter to choose the great over the new.

e. Don’t oversqueeze dots. A dot is just one piece of data from one moment in time; keep that in p...

5.3 Synthesize the situation through time.

see how the dots connect through time you must collect, analyze, and sort different types of information, which isn’t easy.

i was doing this to decide my timetable for uni

People who are good at pulling out such patterns of events are rare and essential, but as with most abilities, synthesizing through time is only partially innate; even if you’re not good at it, you can get better through practice.

a. Keep in mind both the rates of change and the levels of things, and the relationships between them. When determining an acceptable rate of improvement for something, it is its level in relation to the rate of change that matters.

improvement should be relative to the bar that is set

often see people lose sight of this. They say “it’s getting better” without noticing how far below the bar it is and whether the rate of change will get it above the bar in an acceptable amount of time.