I recently read a book that impacted me in a multitude of ways. This book was noneother than Ray Dalio's 'Principles'.
Ray Dalio is the creator of Bridgewater Associates, also known as one of the largest investment management firms in the world. At first, I was skeptical: what advice did a world-famous billionaire have that could truly impact me? His world is so far from my own that I wasn't sure that our experiences could relate at all.
Yet, after reading this book, I am sure that many of Dalio's principles are crucial to the way we interact with the world and each other. 'Principles' is not another financial advisory book in which it is believed that any amount of grind and hard work can result in you, too, being a billionaire - it is an almanac of rules that Dalio has developed to make successful decisions. And in order to do so, you must have a sound mind first. I have taken it upon myself to learn and practice his core principles, and I believe that you should as well.
Before diving into the principles themselves, there are a few pieces of groundwork that must be established to provide context. There are a few frameworks that Dalio bases his principles upon:
You must be okay with reality. Everyone comes from different backgrounds and different hardships, but in order to overcome our predisposed circumstances, we must accept them.
The truth outweighs everything. By 'the truth', Dalio does not mean unleashing all the gossip you've collected on someone or telling your sister to stop singing in the shower because it's horribly out of tune - the truth, in Dalio's standards, is the real way things are.
Life is about the pursuit of the truth. Any other way to live it is an illusion.
With the framework set, we can now discuss what Dalio’s specific principles are. All of his principles are in pursuit of the truth, which means that they are in pursuit of progression and growth. In this post, I will discuss the ones that have impacted me the most, but know that there are many other ones – too many to describe, in fact – that are all recorded in his book for your own viewing pleasure.
The pursuit of the truth is a hard one. It requires a lot of effort, pain, and perseverance. In this case, one might ask, why is doing so important? Why not live in the comforts of our ignorance? Why reach for more?
In Dalio’s words, we cannot live fully without the truth. Our world without the criticism of others is merely an illusion of ourselves that we have created. For example, I think that I am creative, cooperative, and a leader. However, is that the truth for everyone else? When I am in a collaborative setting, is that what my peers think of me as well? I will never know until I ask or they tell me.
Living without the knowledge of how things really are is like living in a dark world where you choose not to flick on the light switch. It is an acceptance of flaws that will not be corrected. That is why pursuing the truth is crucial to our self-development, so we may grow into the best people that we can be and thus make better decisions.
Pursuing the truth has a few steps. First, it requires you to be radically open-minded. Dalio writes,
“To be radically open-minded, you need to be so open to the possibility that you could be wrong that you encourage others to tell you so” (pg. 189)
You must be okay with the fact that you are an imperfect being with flaws and you must want to fix these flaws. Similarily, being radically open-minded means that you must decide whether your agree to Dalio's principles, and if not, you may make your own.
Being radically open-minded is easy on paper, but it is much harder to practice in real life. I’ve had a recent experience with this myself: yesterday was my last day of work, and I coincidentally had evaluations as well. My boss told me what I could improve upon (listening to other people’s ideas while I have my own, staying alert in every situation). Receiving criticism is never easy: for some reason, not being perfect doesn’t feel like it’s allowed, and it usually results in insecurities which makes your mind wander away from the issue at hand. In fact, you may notice that when initially receiving criticism, your first reaction is not a logical acceptance, but it’s a spike in your heart rate and a fear that you’re not enough. Fortunately, I’ve had a lot of practice in receiving criticism (especially from my experience in Mock Trial and AKPsi), so I made sure to remember her advice and practice improving on these traits.
Dalio describes this emotional response as the actions of the ‘lower you’, or your subconsciousness. In psychology, your subconsciousness is the collection of the feelings that usually do not bubble to the surface unless you are in a stressful or difficult situation. In situations like receiving criticism, it is easy to let your ‘lower you’ take control and fire back. I’ve met many people that take offense to issues that I’ve raised to them. However, to be successfully radically open-minded, you must control your ‘lower you’ with your ‘higher-level you’: the level of logic, understanding, and patience. With practice, anyone can receive criticism with gratitude instead of defensiveness.
There are other times, however, when the truth does not come through an evaluation, but from a catastrophic event. Perhaps it’s the death of a parent or a loss of a job; whatever it is, there are a plethora of bad situations in life that present us with new opportunities and lessons. As Dalio puts it,
"At some point in your life you will crash in a big way … at such times, you will be in pain and might think that you don’t have the strength to go on. You almost always do, however; your ultimate success will depend on you realizing that fact" (pg. 155)
The point is that life is full of so many struggles that it may seem to be one itself. Finding an internship for the next summer is highly stressful and draining. Starting a new business comes with fear, high expectations, and a chance for loss. Nothing that we desire comes easily and it never will. If it did, that means it was always there in the first place.
If there is anything that I have observed, it is that humans are greedy. We always want more. It is very hard to satiate ourselves. We want more money, more recognition, more friends, more love, and more status. For many, a life without achieving anything is a boring life.
However, achieving all of these things will always come with hardships. Good friends are hard to find. A stable income usually comes with years of school and hard work. In reality, what we truly want will always be hard to achieve because we cannot want what we already have. And what I have failed to realize in the past is achieving these things has never been about the result … it has been about the struggle.
For example, when I think back to my years in high school debate, I never think about qualifying for the State Tournament or bringing home awards; I always think back to the hours of research I did and the breakthrough articles I found while walking from one class to the next. And during those moments, I was stressed, tired, and frustrated … but I was also incredibly happy. Looking back now, I loved the struggle. I loved the work I did because it produced the results I wanted. And when I eventually did win, it was the research I did into the wee hours of the early morning that would make it truly worthwhile.
Therefore, while finding the truth, Dalio tells us that our love for the struggle is what makes us pursue more. We cannot experience the sweet without the salty and we cannot appreciate a sunny day without the rain. Similarly, the happy moments in our life can only be valued with the pain that we endure.
And while you may not be happy during the pain, I can promise that you will be much better because of it. The pain is a wake-up call. It’s an opportunity for change. It exists because the way that we have been doing things is so wrong that we must crash and fail to do things better. Indeed, Dalio writes,
“Every time you confront something painful, you are at a potentially important juncture in your life – you have the opportunity to choose healthy and painful truth or unhealthy but comfortable delusion” (pg. 111)
So, the next time that you are confronted with a broken bridge that you think that you cannot mend, remind yourself that fixing it now will enable it to endure much more later.
When you practice radical open-mindedness, you will see that your life will considerably improve. You will interact with the world in a better way with your improved knowledge about yourself, and as a result, you will make better decisions.
In our journey to self-growth, we will also cross paths with many people. It is highly encouraged that these people live their lives in pursuit of the truth as well, so that we may all work and live together in harmony and efficiency. However, the Achilles’ heel of Dalio’s principles is that they are inherently idealistic in a realistic world. Humans are not machines that can control every emotion in pursuit of logic. We will never be able to execute every interaction and transaction in full control of our ‘lower-levels’. In fact, we are derived from our lower-levels – it was our flight-or-flight responses and defensiveness that originally allowed us to survive in the wild and evolve into what we are today. So, with that logic, we can never truly escape and control what we came from.
However, we can always try to be as radically open-minded as we can be. Think of the perfect person as one that solely relies on their ‘higher-levels’ to make decisions and reacts to every bad situation perfectly, and now imagine yourself as an asymptote to that person – never exactly reaching it, but not too far from it, either. With our origins and limits, all we can do is to be as good as we can be.
With this in mind, understand that we are all at different distances from this ‘perfect person’. On a graph, our ‘perfect person’ is a line that we will never touch. You’re probably not as close to that person as you think you are – I know that I’m certainly not. And many people will be much farther away from that person than you would like. It is not efficient to believe that every person can subscribe to these principles and furthermore execute them as well.
And when you encounter these types of people, it will be easy to want to change them. But you must understand that you cannot change everyone, and in most cases, people don’t change. On average, Dalio notes that a habit takes at least 10 months to change due to our brain plasticity. With these physical barriers in mind, know that it is also not your obligation to change others. Your advice might be beneficial for another person (and it may boost your savior complex), but you cannot expect people to change, and you cannot be mad at them when they do not. I have spent much of my life being frustrated about this concept until I realized that I should have not let those people in in the first place.
Consequentially, all of this might make you ask, “what’s the point then?” Is it to struggle? So, what, you have become the best version of yourself … what now?
Dalio sums it all up simply: the point is the relationships you’ve built and the work that you do. You must set high expectations and principles for yourself in order to be truly radically open-minded and successful, and as a result, you will seek out people with the same values as you do. This is the most important part of any relationship.
The goal of ‘Principles’ is not to make you into a millionaire or CEO. It’s to enable you to live life to its fullest, to make the best decisions, and as a result, build strong and meaningful relationships with other people and your work. Without those, life would truly be wasted.
There is no specific moment or time when everything comes together, and you understand what your purpose in this great, big world is. All you have is yourself, the people around you, and what you do. Life itself is a journey, so enjoy the struggle. And by practicing radical open-mindedness, perhaps we can all weather the storm a bit better.
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