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Principles Summary

About Principles Book

#1 New York Times Bestseller

“Significant...The book is both instructive and surprisingly moving.” —The New York Times

Ray Dalio, one of the world’s most successful investors and entrepreneurs, shares the unconventional principles that he’s developed, refined, and used over the past forty years to create unique results in both life and business—and which any person or organization can adopt to help achieve their goals.

In 1975, Ray Dalio founded an investment firm, Bridgewater Associates, out of his two-bedroom apartment in New York City. Forty years later, Bridgewater has made more money for its clients than any other hedge fund in history and grown into the fifth most important private company in the United States, according to Fortune magazine. 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.

In Principles, Dalio shares what he’s learned over the course of his remarkable career. He argues that life, management, economics, and investing can all be systemized into rules and understood like machines. The book’s hundreds of practical lessons, which are built around his cornerstones of “radical truth” and “radical transparency,” include Dalio laying out the most effective ways for individuals and organizations to make decisions, approach challenges, and build strong teams. He also describes the innovative tools the firm uses to bring an idea meritocracy to life, such as creating “baseball cards” for all employees that distill their strengths and weaknesses, and employing computerized decision-making systems to make believability-weighted decisions. While the book brims with novel ideas for organizations and institutions, Principles also offers a clear, straightforward approach to decision-making that Dalio believes anyone can apply, no matter what they’re seeking to achieve.

Here, from a man who has been called both “the Steve Jobs of investing” and “the philosopher king of the financial universe” (CIO magazine), is a rare opportunity to gain proven advice unlike anything you’ll find in the conventional business press.

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Principles by Ray Dalio

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Ray Dalio’s Principles

Ray Dalio’s Principles

Ray Dalio, the founder of the largest hedge fund in the world, lays down his rules and frameworks he uses to navigate his life. He calls them principles. Principles are fundamental for decision making and allow you to live a life according to your values. 

Ray Dalio uses principles to guide his personal life, his relationships or to build businesses.

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Principles = Fundamental Truths

Principles = Fundamental Truths

All principles come from a set of values.

Your values are what you consider important and they define who you want to be. However, they are not practical to use when you are faced with tough decisions.

For example: You may value to “live a healthy lifestyle”. What does “being healthy” mean in practice? What are the daily decisions you are going to make?

Instead of using your values to make decisions, you should defer to principles.

To “live a healthy lifestyle”, you need to create a set of principles to guide you: like “I do not eat fast food during the week” and “I exercise 3 times / week”.

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Ray Dalio

“Principles connect your values to your actions; they are beacons that guide your actions, and help you successfully deal with the laws of reality. It is to your principles that you turn when you face hard choices.”

RAY DALIO

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Goal Setting

Goal Setting

Everyone sets goals but yet only a little percentage of them completely achieve them cause most of us dont have a system to get to those goals. Anyone can achieve their goals once they implement this 5 step system by Ray Dalio.

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Mindset

Mindset

Most of us are limited by our mindset rather than abilities. Mostly we dont pursue bigger and harder goals cause we like to stay in our comfort zone and pursue something that is relatively easy to do and takes less time. That is why there is only one Steve Jobs, Bill Gates, or Elon musk. They did something that people with mediocre minds can't even dare to do.

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Problems

Problems

The next step is identifying the problems that limit you from achieving the selected goals. Most of us are afraid to highlight our weaknesses due to ego barriers and we like to blame instead of admitting. We find having weaknesses painful because society has taught us having weaknesses is a bad thing.

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1. When encountering your weakness, you have four choices:

a.      You can deny them (which is what most people do.)

b.      You can accept them and work at them in order to try to convert them into strengths (which might or might not work depending on your ability to change).

c.      You can accept your weakness and find ways around them.

d.      Or, you can change what you are going after.

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View yourself from a higher level

You need to try and view your problems with an objective perspective. The best way to do this is by looking at the problem and yourself from a higher level.

Achieving this is possible by writing down what your diagnosis of the problem is, what issues arise from the problem and your design of the solution. Only then can you properly attack your problem

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Technology

I feel that in the pursuit of technological development, what we are essentially is doing is, reducing the latency in every known process.

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Time.

Time.

Time is like a river that carries us forward into encounters with reality that require us to make decisions.We can't stop our movement down this river and we can't avoid those encounters.We can only approach them in the best possible way.

-Ray Dalio

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