Ray Dalio remains one of the more level-headed and practically minded billionaire investors, demonstrated in how he applied his personal philosophy regarding principles in a company-based fashion to avoid the disastrous outcome of the 2008 subprime mortgage crisis and the ensuing recession. In his book “Principles - Life and Work,” Dalio seeks to engage readers in a two-part structure. First, how he developed his sense for principles through his experiences in life, and second, how to generalize those principles to the members of a team or even at scale. He writes that he had previously drafted versions of this for those seeking business advice and direction for him after his hedge fund, Bridgewater, miraculously made positive returns amid the 2008 financial crisis. Dalio shares his autobiography with the intention of helping readers relate in a way that might allow them to discover their own set of principles.
So, at the core of the issue, what are principles? According to Dalio, they can more or less be boiled down or discerned by prompting yourself with the following: (1) think for yourself to decide what you want, (2) what you believe to be true, and (3) what steps are necessary to take in order for you to accomplish (1) in light of (2). Speaking further on the topic, Dalio relays the fact that his setting of audacious goals and continuous learning and recognition of the reasons for his failure ultimately bred his success. This is considered somewhat of a platitude by most, but the emphasis on how one internalizes and adjusts one’s perspective to reflect the circumstances of reality more accurately is one of the key insights the book hammers home to readers. After achieving a personal set of behavioral patterns that work according to “believability-weighted decisions,” “operationalization by principle,” and “systematizing decision-making processes,” readers now possess a powerful tool set and logic for success. Read Dalio’s work to catch a glimpse in how he walks his talk in employing these practices.