3 Lessons From Dalio’s Life Principles

Ray Dalio spent 40 years of his life building Bridgewater Associates from his dorm room into a huge success managing over $100 billion. Then he wrote a book cataloguing all the lessons he learned from his mistakes along the way: Principles: Life & Work.

1. Maximise your evolution

Once we get the things we are striving for, we rarely ever remain satisfied with them. The things are just the bait. Chasing after them forces us to evolve, and it is the evolution and not the rewards themselves that matter to us and to those around us. — Principles, p. 151

So it’s important to keep in mind, as we work towards a career goal for example, that the real objective is to grow and learn. This should inform our process: if something went badly, dwell on it to understand why so you learn to never repeat this mistake. If you’re hesitating between a difficult option and an easier one, go towards the pain of the difficult option and view it as a learning experience.

Go to the pain rather than avoid it. If you don’t let up on yourself and instead become comfortable always operating with some level of pain you will evolve at a faster pace. — Principles, p.152

Another way to think of this is as: pain+reflection=progress.

One practical way to increase your evolution is to be radically open-minded and radically transparent.

2. Be radically open-minded and radically transparent

Learning is the product of a continuous real-time feedback loop in which we make decisions, see their outcomes, and improve our understanding of reality as a result. — Principles, p.136

Dalio encourages us to show others what we do (transparency) and ask them how we could do it better (open-mindedness). If we put ourselves in a position to look silly, we’re also in a position to learn.

It can also be difficult because being radically transparent rather than more guarded exposes one to criticism. It’s natural to fear that. Yet if you don’t put yourself out there with your radical transparency, you won’t learn. — Principles, p.137

The difference between open-mindedness and radical open-mindedness is how proactive you are about it. It’s one thing to accept criticism, it’s another to go out of your way to seek it. And that’s what we should be doing.

I started doing this in my previous job and it worked way better than I expected. I reached out to successful CEOs in and around Cambridge and asked them to take a look at our business and tell us what they’d do in our shoes and how they thought we were being idiots. By the time I’d spoken to three, one of them had some very clever insights and led us to make some big changes which increased our profits and made our lives nicer!

3. Remember that weaknesses don’t matter if you find solutions

Everyone has at least one big thing that stands in the way of their success; find yours and deal with it. […] While you and most people probably have more than one major impediment, if you can remove it or get around that really big one, you will hugely improve your life. — Principles, p.179

We all have very big weaknesses. But with humility and open-mindedness we can be honest about what we are bad at (I’m terrible at planning things and finishing them for example) and look for ways around this. Often the best way is to team up with someone who complements us well.

Humility can even be more valuable than having good mental maps if it leads you to seek out better answers than you could come up with on your own. — Principles, p.180

…

In summary:

Maximise your evolution: if ever you’re unsure, go towards the pain.
Be radically open-minded and transparent: pro-actively get people to explain to you in what ways you are being an idiot, expose yourself to criticism and learn from it.
We all have big weaknesses, identify yours and work towards fixing just that.

If you liked this article you might also enjoy 5 Lessons from Seneca’s letters.

—

This post was previously published on medium.com.

***