Nano Summary of the book Principles by Ray Dalio

Last year I managed to finish reading a dense book called Principles by Ray Dalio.

In the book, Ray is basically documenting his life experience, specifically how to succeed in life and in business. After reading the book I can confidently say that he shared everything I have personally learned in life so far, while other things I have yet to learn - it seems

I am sharing this post today to 1) Share knowledge 2) To make sure I understand the book by trying to explain it

Note: this is not a thorough summary of the whole book, it is a 500+ pages book and it is not easy to summarize in one post

Let's start

The book is has two main sections:

1- Life principles: list of principles to succeed in whatever you are doing in life

2- Work principles: principles to create a successful organisation

Life principles:

The author suggests that we should:

Decide what do we really want, what is true (Reality), and what we can do to achieve what we want in light of what is true. The key is to do that with humility and open-mindedness

Look for patterns (things affecting you), cause-effect relationship (what drives things that are affecting you), then learn principles for dealing with them.

You should embrace reality and deal with the above patterns

He claims that Dreams + Reality + Determination = Successful life

Some other quotes here:

Pain + Reflection = Progress

No pain = No gain

Evolve or Die

Successful people are those who can go above themselves and see things objectively

He also claims that since the above is hard to do, one need to rely on input of others and the whole body of evidence to see yourself objectively

Ray then suggests the following 5 step process to get what you want in life

1- Have clear goals

2- Identify and don't tolerate problems

View problems are potential improvement opportunities

3-Diagnose your problems to get to the root cause

Here he talks about how people are different, and that you need to deeply understand yourself and others to have the right expectations

4-Design a plan (to fix the problem)

Think about your problem as a set of outcomes produced by a machine, think of your plan as a movie script visualised through time

5- Push though completion

Establish clear metrics

Weakness doesn't matter if you find a solution

Look at patterns of your mistakes and look at which step in the process you fail

Find the one big thing that stands in the way of your success and deal with it

Be radically open-minded

Know your barriers: usually Ego, Blindspots, rational vs irrational brain

Believe that you might not know the best possible path, how you deal with it is important

In decision making, you take all relevant info first then you decide

Don't worry about looking good, worry about achieving your goals

Triangulate your views with believable people who are willing to disagree

believable people = people who did the things you are asking about 3 times successfully and can explain how they did it

Understand that people are wired differently

Important of personality tests

Find out what you and other people are like

Putting the right people in the right role in support of your goal is key to success

Learn how to make decision effectively

Biggest threat=harmful emotions

Think who you should ask a question of (not everyone)

Synthesise the situation through time -> make decisions as expected value calculations

Raise the probability of being right

Knowing when not to bet is more important than what bets are worth making

Decide on the value of additional information vs the cost of not deciding

Believability weight your decision making

Convert your principles into algorithms to get computer support

The work principles will follow in a different post