Oftentimes, we get inspired by rags to riches stories. And sometimes, we end up trying to take a similar path with the hopes of making it big too. We have the usual suspects Warren Buffett, Elon Musk, Jeff Bezos, Bill Gates, and Steve Jobs.
But, we seldom see people idolize Ray Dalio. Ray Dalio is currently rank #88 (September 2021) of the World’s Richest Men by Forbes magazine. He’s the founder of Bridgewater Associates which manages a whopping $150 billion fund. Dalio came from a middle-class family but started his knack in the stock market when he was just 12 years old. He was a caddy for businessmen whom he overheard talking about stocks. He got interested in stocks and plotted his career (at that young age) in finance.
Straight from Harvard Business School, Ray Dalio went to work in finance, learned the ropes of investing, and then started his own management fund.
Ray Dalio credits his success from losing a lot of his client’s money in the 70s. He then started taking note of the things that worked (and didn’t work) from all of his trades. He kept creating mental models of his trades until he made a workable set where he had an almost certain chance of success. He wrote this book and now we have “Principles.”
The book is organized into several sections. Ray Dalio talks about and gives tips on personal life, investing, and work-related stuff.
Bits and pieces we love about the book:
Hypothesis > Write down the criteria > Test > Use in real-time > Stress test > Adjust hypothesis
- Create a repeatable process in order to test a hunch or an observation.
- Problems are meant to be solved. If you solve one problem, you get to write it on your principles.
- If possible, use computers to automate everything.
- Look for people who disagree with you and then understand their reasoning.
- Look for opinionated people but are willing to shift opinions as they learn new things.
- Have an agreed-upon way of doing things. (voting, veto, etc.)
- Balance risks. Go for trades that will make the most upside with very minimal risk.
- The world is governed by nature. There is order in things that work not on what you think should work.
- Evolve or die. This applies in everything from an individual point of view (career, relationships, personality, etc.), companies (Kodak, Tesla, Amazon, Starbucks), countries (Brazil, Greece, Spain) and industries (financial vs cryptocurrencies). If you fail, learn and then quickly improve.
- Be open minded because if you’re not, you’ll be a slave of your biased views and won’t be able to adapt to an ever changing environment
- Progress can be had through reflection from pain. Instead of sulking yourself in pain, go through it. Don’t avoid pain. It will lead to rapid learning and transformation. Keep doing this and you’ll always be better today than yesterday.
- The 5-Step Process to get what you want out of life.
- Have clear goals.
- Identify and don’t tolerate the problems that stand in the way of you achieving those goals.
- Accurately diagnose the problems to get at their root causes.
- Design plans that will get you around them.
- Do what’s necessary to push these designs through to results.
There is actually too much from the book to write about. We recommend that you have a copy of your own. You can personalize each principles Ray Dalio has written if you want. As he said, evolve or die. One day, these principles might need to change but for now, these are still relevant.
Who knows? You might be writing a new book titled “The New Principles” but for now, grab your own copy and evolve!
Who is this book for?
It’s for someone feeling stagnant in their career.
It’s for that person undergoing rapid transformation but is unsure how to go about with his life.
It’s for that founder or manager who wants a bit more philosophy (and practical advice) for their business.
It’s for politicians wanting a better country.
It’s for everyone who doesn’t want to get extinct and be replaceable.
It’s for everyone who wants to evolve.
Buy it here
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