A Primer on Ray Dalio’s Principles For Success

Don’t know who Ray Dalio is? Here’s a brief bio from a related web site:

Ray Dalio founded Bridgewater Associates, an investment firm, out of his two-bedroom apartment in New York City in 1975. Over forty years later, Bridgewater has grown into the fifth most important private company in the United States, according to Fortune magazine, and Dalio himself has been named to Time magazine’s list of the 100 most influential people in the world. Along the way, Dalio discovered a set of unique principles that have led to Bridgewater’s exceptionally effective culture, which he describes as “an idea meritocracy that strives to achieve meaningful work and meaningful relationships through radical transparency.” It is these principles, and not anything special about Dalio—who grew up an ordinary kid in a middle-class Long Island neighborhood—that he believes are the reason behind his success.

Several years ago Dalio put all of these principles into a 106-page PDF and made it freely available. The principles are split between life principles and work principles. Then in September of last year, he decided to publish these principles in a 593 page book, which can be found at places like Amazon and Barnes&Noble. While the PDF is no longer available directly from the Bridgewater web site, it can still be found here.

There is no doubt that Dalio has achieved great success, at least measured in traditional terms, and thus I believe there is value in learning from such an individual. As an alternative to learning the basics of Dalio’s philosophy, there are a few video options available if you don’t have time to read the book or PDF.

First, Dalio has created a series of eight short animated videos (that total just 30 minutes) which distills the 593 page book down to its essential concepts. These videos were just released today!

I have included the videos here, as well randon notes I took while watching each video so I could remember the key points. I’d highly recommend watching the videos. It’s only 30 minutes of your time, and you may learn some valuable ideas.

Episode 1: The Call to Adventure

  1. decide what to do
  2. have the courage to do it

Episode 2: Embrace Reality and Deal With It

truth is the essential foundation for producing good outcomes

a hyperrealist – work with reality the way it is , not the way you wish it was

need to learn to confront and deal with your problems, weaknesses, and mistakes

dreams + reality + determination = successful life

pain + reflection = progress (meditation is a big help here)

Episode 3: The Five-Step Process

  1. Goals: know your goals
  2. Problems: encounter the problems that stand in the way
  3. Diagnosis: diagnose the problems to get to the root causes
  4. Design: design a plan to eliminate the problems
  5. Do It: execute those designs

Episode 4: The Abyss

You will lose something or someone you think you can’t live without, or suffer an illness or injury, or your career will fall apart before your eyes, but it will pass. There is always a best path forward, you just may not see it yet.

Episode 5: Everything Is a Machine

  • galaxies, our solar system, the makeup of earth’s geography and ecosystems, our economies and markets, and our bodies are all “machines”, and we can learn how they work
  • some things happen over and over (easy to deal with); some things happen infrequently (and we’re shocked when they do); some things we believe happen for the first time and treat them as unique (when they are not) – you can study them to learn their cause and effect
  • to get the most out of life, one has to take more risk
  • knowing how to balance risk and reward is essential
  • you can have a safe boring life if you stay where you are or a fabulous life if you take the risk of crossing a dangerous path

Episode 6: Your Two Biggest Barriers

  1. our ego – parts of your brain that prevent you from acknowledging your weaknesses objectively so that you can learn to deal with them
  2. our blind spots – when a person believes he or she can see everything, but no one can; can’t appreciate what we can’t see

these get in the way of good decision making

Episode 7: Be Radically Open-Minded

  • replace the joy of being proven right with the joy of learning what’s true
  • look for thoughtful disagreement
  • be open-minded to the views of others
  • seek out the strongest independent thinkers
  • be on a shared mission with extraordinary people who can be radically truthful and transparent
  • idea meritocracy – gets the best of everybody; first let them think independently then work through the differences to get at what’s best
  • not every opinion is equally valuable – need to distinguish between good and bad ideas to get the best decisions

Episode 8: Struggle Well

  • surround yourself with others who can do things better than you – most effective way to make great decisions
  • Dalio discovered that other successful people have struggled and all have weaknesses
  • work with others who see risks and opportunities that you might miss
  • most people’s greatest strengths are connected to their greatest weaknesses
  • success is not matter of attaining one’s goals – they are just the bait, struggling to achieve them is the reward
  • seek greater challenges surrounded by great people working together on a  shared journey
  • you may reach the point where you care more about other’s successes and well-being than yours
  • want others to be successful when you are no longer here
  • how will you evolve – assess whether these principles are useful and evolve them to suit your own needs; what you do with them is up to you
  • Dalio’s hope is that we all have the courage to struggle and evolve well to make your life as great as it can be

A second video option is Dalio’s 2017 TED talk, which focuses on his ideas of radical transparency in the workplace. The video shows a fascinating tool that Bridgewater uses at its meetings to get the best ideas and feedback. No one is safe!


Third, there is a video of a 2018 talk Dalio gave at Google where he discusses the principles in his book in more detail:


And finally, here is a video of an interview Dalio did with Tony Robbins on the day his book was released.

2 thoughts on “A Primer on Ray Dalio’s Principles For Success

    1. I have not read the book, but have browsed through the pdf. the video series was well done. I also look forward to seeing his investing principles. welcome home!

      Like

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