Ray Dalio, the founder of the world's largest hedge fund, Bridgewater Associates, has openly shared the principles that have guided his success in both his professional and personal life. His book, "Principles: Life & Work," has become a cornerstone for individuals and organizations seeking to improve their decision-making and achieve their goals.
On Reality and Truth
Dalio's philosophy begins with a commitment to understanding and accepting reality as it is, not as one wishes it to be. This, he argues, is the essential foundation for any meaningful progress.
- "Truth—or, more precisely, an accurate understanding of reality—is the essential foundation for any good outcome." [1]
- "Embrace Reality and Deal With It." [2]
- "Successful people are those who can go above themselves to see things objectively and manage those things to shape change." [3]
- "The biggest mistake most people make is to not see themselves and others objectively, which leads them to bump into their own and others' weaknesses again and again." [3]
- "By and large, life will give you what you deserve and it doesn't give a damn what you like. So it is up to you to take full responsibility to connect what you want with what you need to do to get it, and then to do those things." [4][5]
- "He who lives by the crystal ball will eat shattered glass." [4][6]
- "Don't mistake possibilities for probabilities. Anything is possible. It's the probabilities that matter." [7]
On Mistakes and Learning
A central tenet of Dalio's approach is the idea that mistakes are not to be feared but rather embraced as valuable learning opportunities. His formula for progress is a direct reflection of this belief.
- "Pain + Reflection = Progress." [8][9]
- "If you're not failing, you're not pushing your limits, and if you're not pushing your limits, you're not maximizing your potential." [1][10]
- "I saw that to do exceptionally well you have to push your limits and that, if you push your limits, you will crash and it will hurt a lot. You will think you have failed—but that won't be true unless you give up." [1][10]
- "Create a culture in which it is OK to fail but unacceptable not to identify, analyze and learn from mistakes." [11]
- "For every mistake that you learn from you will save thousands of similar mistakes in the future, so if you treat mistakes as learning opportunities that yield rapid improvements you should be excited by them." [5]
- "If you don't look at yourself and think, 'Wow how stupid I was a year ago,' then you must not have learned much in the last year." [4][7]
- "Do not feel bad about your mistakes or those of others. Love them! Remember that one: they are to be expected; two: they're the first and most essential part of the learning process; and three: feeling bad about them will prevent you from getting better." [4]
- "Failures are just steps in the process of achieving your goals." [12]
On Decision Making and Principles
Dalio advocates for a systematic and principled approach to decision-making, moving beyond gut feelings to a more objective and effective methodology.
- "To be principled means to consistently operate with principles that can be clearly explained." [1]
- "Systematize Decision-Making. Rather than relying on emotions or gut instincts, Dalio advocates for creating principles-based systems to guide decisions." [8]
- "Decision-making is a two-step process: First, take in all the information; second, decide." [12]
- "The most important thing is that you develop your own principles and ideally write them down, especially if you are working with others." [13]
- "Maturity is the ability to reject good alternatives in order to pursue even better ones." [1][10]
- "It's more important to do big things well than to do the small things perfectly." [5][10]
- "Be an effective imperfectionist. Solutions that broadly work well are generally better than highly specialized solutions." [5]
On Open-Mindedness and Thoughtful Disagreement
"Radical open-mindedness" is a key concept in Dalio's framework, emphasizing the importance of seeking out and understanding different perspectives, especially from those who disagree with you.
- "Radical open-mindedness and radical transparency are invaluable for rapid learning and effective change." [6]
- "The more open-minded you are, the less likely you are to deceive yourself—and the more likely it is that others will give you honest feedback." [3]
- "Find the most believable people possible who disagree with you and try to understand their reasoning." [1]
- "Holding wrong opinions in one's head and making bad decisions based on them instead of having thoughtful disagreements is one of the greatest tragedies of mankind." [1]
- "Instead of saying 'I know I'm right,' one should ask, 'How do I know I'm right?'" [3]
- "Recognize that to gain the perspective that comes from seeing things through another's eyes, you must suspend judgment for a time—only by empathizing can you properly evaluate another point of view." [3]
- "Listening to uninformed people is worse than having no answers at all." [1][10]
On People and Relationships
Dalio stresses the importance of surrounding yourself with the right people and fostering a culture of meritocracy where the best ideas win out.
- "Build a Culture of Meritocracy. Dalio's concept of an “idea meritocracy” ensures that decisions are made based on merit, not hierarchy."
- " [8]Look for people who have lots of great questions. Smart people are the ones who ask the most thoughtful questions, as opposed to thinking they have all the answers." [1][10]
- "What matters most is that the people you work with share your values." [4]
- "Asking others who are strong in areas where you are weak to help you is a great skill that you should develop no matter what." [3]
- "Great people are hard to find so make sure you think about how to keep them." [7]
- "The greatest gift you can give someone is the power to be successful. Giving people the opportunity to struggle rather than giving them the things they are struggling for will make them stronger." [10]
On Life and Success
Ultimately, Dalio's principles are designed to help individuals lead more fulfilling and successful lives, defined by meaningful work and relationships.
- "I learned that if you work hard and creatively, you can have just about anything you want, but not everything you want." [10][14]
- "The happiest people discover their own nature and match their life to it." [1][10]
- "Meaningful work and meaningful relationships aren't just nice things we chose for ourselves – they are genetically programmed into us." [12]
- "It is a law of nature that you must do difficult things to gain strength and power." [4][5]
- "School typically doesn't prepare young people for real life – unless their lives are spent following instructions and pleasing others." [4][5]
- "Treat your life like a game." [4][5]
- "Constantly worry about what you are missing." [11][12]
- "The quality of your life depends on the quality of the decisions you make." [13]
- "Most of life's greatest opportunities come out of moments of struggle; it's up to you to make the most of these tests of creativity and character." [4][7]
- "To get the most out of life, you have to know what the best choices are, and then do what's necessary to achieve them." [12]
On Investing and the Economy
As a legendary investor, Dalio also offers specific wisdom on navigating the financial markets.
- "Diversifying well is the most important thing you need to do in order to invest well." [6]
- "To make money in the markets, you have to think independently and be humble." [5][7]
- "The biggest mistake investors make is to believe that what happened in the recent past is likely to persist." [5]
- "You should have a strategic asset allocation mix that assumes that you don't know what the future is going to hold." [4][5]
- "If you don't own Gold, you know neither history nor economics." [4][5]
Learn more:
- 13 Best Quotes from 'Principles: Life and Work' by Ray Dalio - Book Fave
- Principles by Ray Dalio - Marina Hernández
- My favorite Ray Dalio quotes - WisdomFromExperts
- Top 25 Ray Dalio Quotes to Inspire You in Life and Business - Dividend Power
- TOP 25 QUOTES BY RAY DALIO (of 162) | A-Z Quotes
- Ray Dalio Quotes | Sarwa
- 20 Best Ray Dalio Quotes - TraderLion
- 10 Lessons from Principles: Life and Work by Ray Dalio - Venture Book Club
- 5 Lessons from Principle | Ray Dalio | by Jack Yang - Medium
- Principles Quotes by Ray Dalio - Goodreads
- 17 Management Lessons from Ray Dalio - Farnam Street
- 50 Best Quotes from Principles: Life and Work with Images(Ray Dalio) - PopAi
- The Best Ray Dalio Podcast Episodes, Interviews, Quotes, Life Lessons and Advice that Will Change Your Life - Knowledge For Men
- Quotes by Ray Dalio (Author of Principles) - Goodreads