In this section, the author first takes his time to discuss his background information. He talks about Long Island, his home and the experiences he had early in life. The choices he made as a young boy seem to have affected his entire life since he always seeks to get what he wants and not what other people expect of him (Dalio 10). Dalio talks about his participation in the stock market while explaining how he gained substantial knowledge of the venture at such a tender age. He also traded commodities futures while in college, a venture that benefited him adversely. The author mentions his experience while at Harvard Business School (Dalio 11). He also claims that the Bretton Woods system lead to him understanding the currency markets.  Dalio asserts that his success follows the simple rules he followed when he was 12 years old and trying to beat the stock markets. Ideally, the rules guided him into working for what he wanted and not what others wanted him to do. In addition, he would come up with the best independent opinions that would help him move towards his goals (Dalio 12). Apart from that, he would stress test his opinions by seeking advice from the smartest people he could find thus being able to figure out where he went wrong. Besides, he was wary about overconfidence and good at not knowing. Lastly, he would wrestle with reality, experience the results of his decisions and reflect on what he did to produce them so that he could improve (Dalio 12).

Further, Dalio talks about expectation in life. On this particular subject, he shares his experience following an international currency devaluation. He claims that he expected the stock market to drop thus taking a position he thought was appropriate. However, his expectations backfired and almost left him bankrupt (Dalio 10). Following those events, Dalio set out to identify the principles he needed to put in place and studied past currency devaluations from the beginning of time to the present. This research was his way of finding out any lessons he could learn from history since every mistake made must have occurred previously to other people. Therefore, he was able to equip himself with the necessary information that would help him fix his mistakes in the future.

Apart from that, Dalio also emphasizes on the importance of writing down the principles that an individual uses since they may need further reflection and refinement to ensure that they work out perfectly. Ideally, Dalio always writes down the criteria used in making his decision whenever he makes an investment. Later, he is able to assess the success of the criteria thus identifying any mistakes made easily. Dalio claims that all successful people operate on principles although they may not realize it (Dalio 7). Ideally, principles allow for proactive planning and decision-making. Therefore, Dalio likens a good set of principles to a collection of recipes for success. In fact, he claims that his life principles are the primary principles that guide his approach to everything in his life. He says that they apply in all scenarios including his personal life, nature, business, and policy.  Due to this, Dalio says that learning effective principles requires one to understand the cause-effect relationships and patterns (Dalio 43). In addition, one has to understand reality, embrace it and deal with it effectively.  He also claims that for one to create, use and improve such principles, they should do the following:

1. Slow down and note the criteria used to make a decision.
2. Write the criteria down in the form of a principle.
3. Think about those criteria the next time there is an outcome to assess, and refine them before “another one of those” moments come along.

Self-evaluation comes as the first principle for Dalio. Ideally, he practices transcendental meditation where he replays past events, identifies the lessons he needs to gain truths from experience, and implements actions that can guarantee that the next time the same scenario happens, he will perform better. He thinks that everyone should ask him/herself the following:

1. What do you want?
2. What is true?
3. What are you going to do about it?

Further, Dalio outlines various principles needed to embrace reality. First, he urges his readers to be hyperrealists, which involves balancing dreams with reality and a determination to achieve success. Apart from that, Dalio thinks that truth is the essential foundation for any good outcome. He says that ignoring reality when it does not reflect what a person wants is foolish. Another principle involves being radically open-minded and radically transparent (Dalio 44). This principle entails being appreciative of the art of thoughtful disagreement while triangulating one’s own views with believable people who are willing to disagree. Additionally, Dalio mentions learning from nature, continuing evolving, and being a good person. On this point, he claims that many people tend to overemphasize of short-term consequences while forgetting about the long-term goals. Therefore, many give up early before achieving their intended goals. To expound on the principle, the author uses fitness as an example. He says that an individual must endure pain before achieving the intended fitness. However, some individuals give up after they feel pain and thus they never reach their fitness goals (Dalio 28).

Besides, Dalio says that Pain + Reflection = Progress. He says that pain serves a valuable purpose as it keeps people alert and moving in the right direction (Dalio 33). In addition, he claims that developing the habit of reflecting on pain is essential to making progress. Apart from that, Dalio wants people to own their outcomes by taking responsibility for the decisions made instead of complaining about the things beyond one's control. Lastly, he says that people should confront their weakness for prosperity to prevail (Dalio 31).

Above all, Dalio sees truth as his most fundamental principle since it is an accurate understanding of reality while being the essential foundation for producing good outcomes (Dalio 15). He explains this principle using evolution and different aspects of the universe. For instance, Dalio believes that evolution is the greatest single force in the universe and that it is good (Dalio 16). Ideally, he says that evolution is the process of adaptation that leads to improvement. To him, understanding the reality is the most effective way of gaining what an individual wants. However, one has to be in harmony with the laws of the universe if he or she is to achieve good outcomes (Dalio 16).

The author also covers his 5-step process of getting what one wants in life. According to the writer, one has to set goals of what he or she wants in life (Dalio 28). The second step is to identify and not to tolerate any problems that may arise (Dalio 30). One has to diagnose the problems effectively without giving up easily (Dalio 32). The fourth step is designing the plan while determining the effective solutions to any possible challenges (Dalio 34). Lastly is doing the required tasks for one to reach the set goals. Nonetheless, one has to know what he or she needs to do each day and must have the discipline to do so effectively (Dalio 35).