This is a comprehensive summary of the book Principles: Life and Work by Ray Dalio. Covering the key ideas and proposing practical ways for achieving what’s mentioned in the text. Written by book fanatic and online librarian Ivaylo Durmonski.
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The Book In Three Or More Sentences:
The 210 management principles Ray Dalio – one of the world’s most successful investors and entrepreneurs – uses to run his company: Bridgewater. Why it’s important to have principles in general and how these rules can be applied in our daily lives. This book will help you figure out what you want in life, what is generally true in life, and what you can do about all of this.
The Core Idea:
Ray Dalio’s attempt is to identify the specific habits and behaviors that his company uses to be and to stay successful. By doing so, he wants to help us get what we want from life for us and for our business. He believes the results of a company are primarily determined by its people and its culture. And if you manage to create a great culture, get the right people together, you’ll achieve excellence in what you do.
- Your ability to spot your weaknesses and improve upon them will help you succeed.
- The quality of your daily decisions determines the overall quality of your life.
- Achieving success doesn’t require complicated to-dos, you simply need to be persistent.
5 Key Lessons from Principles: Life and Work:
- Lesson #1: Be a Hyperrealist
- Lesson #2: The Desire To Evolve And To Get Better Is Humanity’s Driving Force
- Lesson #3: Reflecting On Your Weaknesses Will Help You Improve
- Lesson #4: The Quality Of Our Lives Depends On The Quality Of The Decisions We Make
- Lesson #5: Achieving Success Can be Described in 5 Steps
Lesson #1: Be a Hyperrealist
Hope and dreams are both good things but by themselves, these two won’t get you closer to your goals. You need something more than just being overly optimistic. You need a sense of true realism.
The best way to solve big problems and increase your odds of success is to understand what is true and what is real.
Or in other words, as the author states in the book, to be hyperrealist.
The people who really make a change in the world are those who understand what’s possible and find a way to make that happen. Yes, they have dreams and fantasies but everything they do is something that can actually happen.
True success is only achieved by people who deeply understand reality and know how to use it to get what they want out of life. The opposite is only going to cost you time and money without any real results.
Yes, there are quotes like, “if your dreams don’t scare you they aren’t big enough.” But these things shouldn’t be taken so seriously.
If your goals are not well-grounded, and if you don’t take into account the physical laws you’re only wasting your time. An essential foundation for producing good outcomes is an accurate understanding of reality. To be a hyperrealist.
“When I say I’m a hyperrealist, people sometimes think I don’t believe in making dreams happen. This couldn’t be further from the truth. In fact, I believe that without pursuing dreams, life is mundane. I am just saying that I believe hyperrealism is the best way to choose and achieve one’s dreams. The people who really change the world are the ones who see what’s possible and figure out how to make that happen.” Ray Dalio
Lesson #2: The Desire To Evolve And To Get Better Is Humanity’s Driving Force
Though we think that we’re striving to get more things (e.g., toys, cars, better houses, more money, status, etc.) to be happier. This is not usually the case.
We want to get our hands on more things because deep down inside we want to get better. To look better. To smell better. To feel better.
And since there are a lot of products that will supposedly make us better, smarter, prettier, we consume like crazy.
At its core, what we strive to do is get better as fast as possible, and buying things is the fastest possible way. That’s why people buy weight loss pills, “genuine” productivity courses, self-help books like crazy. That’s why we go to conferences and we purchase expensive clothes. We want to get better but we don’t want to do the hard work. We want to take a shortcut.
As you probably already heard, however, there isn’t a direct way to success. Meaningful things take time to be achieved. If you want to get in shape, weight loss pills will definitely help. But in the long run, they will be only harmful.
So, don’t look for shortcuts to improve your life. Push yourself to do the difficult things. Over time you’ll surely improve and it will feel much better knowing you did it with your own efforts.
“In other words, the sequence of 1) seeking new things (goals); 2) working and learning in the process of pursuing these goals; 3) obtaining these goals; and 4) then doing this over and over again is the personal evolutionary process that fulfills most of us and moves society forward.” Ray Dalio
Lesson #3: Reflecting On Your Weaknesses Will Help You Improve
The prefrontal cortex is the part of our brain that helps us reflect on ourselves and the things around us. This way, we can learn and adapt in order to improve.
Thanks to this ability we were able to fight beasts larger than us. Also, thanks to this cognitive thinking we can figure out how to get around our weaknesses so we can evolve faster and come closer to realizing our true potential. This is how we evolved and how we end up here, surrounded by technology and big buildings.
This feature in our brains sounds kick-ass but there is one slight downside: Generally, people don’t like talking about their weaknesses, or admitting they have such, even though recognizing them is an essential step towards obtaining better results.
The ego has a huge role here. Talking about your weak spots interferes with your idea and opinion of yourself, especially your feeling of importance and ability to do stuff.
Above everything, we need to have a sense of high self-esteem in order to feel good. That’s why most people dislike others exploring their weaknesses because it makes them feel attacked.
But as the author puts it in the book, “that is the biggest single problem of mankind because it, more than anything else, impedes people’s abilities to address all other problems and it is probably the greatest source of pain for most people.”
If you don’t believe and you never admit that you have “problems”, weak spots, flaws, you will never do a good job of understanding yourself and adapting in order to get what you truly want out of life.
Lesson #4: The Quality Of Our Lives Depends On The Quality Of The Decisions We Make
We aren’t born with the ability to make good decisions, we learn it.
Initially, our parents make decisions for us and dictate what will happen in our lives. But, as we get older, we start making our own choices.
What to eat? What to wear? Who to date? We select the people we hang around with. What we should go after. Which path we should take…
For example, if you want to become a lawyer, you’ll go to law school. If you want to be a programmer, you’ll learn how to code; If you want to become an entrepreneur, you’ll read books and listen to Gary Vaynerchuk (apparently every entrepreneur wannabe is listening to him).
As we progress and move toward our goals, we encounter problems, make mistakes, and find our weak spots. The way we choose to approach these barriers determines how fast we move closer to our goals.
So, to make your dreams a reality, you should constantly engage with reality. Meaning, do some sort of work so you can later reflect on the things that you fail to achieve and make adjustments. This constant feedback loop: Do > fail > Adjust, will allow you to solve bigger problems and make better decisions over time.
“Regularly look at that list of assigned tasks to track progress and determine if any adjustments are needed. -Create transparency around the plan by posting it publicly and reviewing it regularly with the group. This helps people see the ways in which all of the problems are being addressed and reinforces accountability.” Ray Dalio
Lesson #5: Achieving Success Can be Described in 5 Steps
Success is a complicated term. At least, that’s what we think. That is what society wants us to believe.
But it shouldn’t be like that.
In reality, success is nothing more than getting what you want out of life. It’s up to you to decide what success feels like for you specifically.
To help us get what we want faster, Ray Dalio presents the following 5 short steps:
- Choose your goals. They will determine your direction.
- Design a plan to achieve your goals.
- Accurately diagnose the problems you encounter along the way.
- Come up with a plan that will get you around the problems you encounter.
- Implement these plans.
The process of encountering problems and later figuring out how to get around them will make you a progressively more capable person. Therefore, help you achieve your goals more easily.
After that, you will set bigger, more challenging goals.
Think about it like lifting weights. If you’re regularly going to the gym, you will naturally increase the weights you lift over time.
That’s it. This 5-step process is a way to evolve as a person. Nothing more, nothing less.
So, what are your goals?
“…treat your life like a game or a martial art. Your mission is to figure out how to get around your challenges to get to your goals. In the process of playing the game or practicing this martial art, you will become more skilled. As you get better, you will progress to ever-higher levels of the game that will require—and teach you—greater skills.” Ray Dalio
- Meaningful work: People need meaningful work and meaningful relationships in order to feel good and be fulfilled. In other words, you won’t be satisfied with your life until you start doing something that seems meaningful to you. Decide for yourself what you want and go after it.
- Be mindful about the choices you make: I mentioned this above, but it’s really important to repeat it again. The quality of our lives depends on the quality of the decisions we make. We literally make millions of decisions on a daily basis. But what we often fail to realize is that there are always consequences. Naturally, if the decisions you make suck, what comes after won’t be good for you. Think carefully about your decisions and improve your decision-making process.
- Set a goal as soon as possible: Nowadays, you can have virtually anything you want. However, you can’t have everything you want. That’s why you must decide what you want as soon as possible. Rejecting the “good to have” things over the bigger goal will help you focus and prioritize your time better.
Commentary And My Personal Takeaway
Even though the management principles mentioned inside the book are all true and part of what Ray Dalio explains is practical, a large portion of the text is quite revolutionary.
We read things like: Be 100% transparent, humble, know yourself, strive to understand others, seek the truth, do the difficult things first, fire people who suck.
Or in other words, most of the rules inside are quite basic. 100% accurate, but still lack that spark of authenticity.
Nevertheless, there is a lot you can learn from Principles: Life and Work by Ray Dalio. It’s a really good book for young managers or for people who are starting their first businesses.
My key takeaway is this:
The main difference between unsuccessful and successful people is that unsuccessful people don’t search and try to fix their weaknesses. In contrast, successful people do.
Spot your flaws and improve them. Don’t try to cover them.
“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.” Ray Dalio
In summary, I believe that you can probably get what you want out of life if you can suspend your ego and take a no-excuses approach to achieving your goals with open-mindedness, determination, and courage, especially if you rely on the help of people who are strong in areas that you are weak.” Ray Dalio
“So what is success? I believe that it is nothing more than getting what you want – and that it is up to you to decide what that is for you.” Ray Dalio
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