The Ray Dalio Formula: Pain + Reflection = Progress

On August 30th, 2018 I lost my job.

Just before lunch, in a matter of minutes, I was stripped of my laptop and sent down the elevator by the CTO. I walked onto the streets of downtown Manhattan in a haze of shock.

Less than a year earlier, in October, I had moved to New York City with this job serving as my life boat for employment and financial stability. Now, it was over. I was cast overboard and forced to tread water until another boat came along.

Over the next few days, I experienced an entire spectrum of emotions that come with loss: anger, sadness, angst, worry, confusion, and regret. The pain of failure was nearly too much for me to handle.

Then, after about three days, these feelings started to subside. I realized it was really over and began to accept my new situation - I was an unemployed guy living in NYC. I was treading water in the middle of the ocean and had to figure out which boat to hop on next.

The next month was one of the greatest periods of self-discovery in my life. Free from a job or any agenda I was able to wander, ponder, and reflect.

I did a lot of reading during this time. One of the books I picked up was Principles by Ray Dalio. The book, if you haven't read it, provides useful frameworks for how to bounce back from failure and achieve success.

There is one key formula in the book that helped reframe the pain of losing my job and switch to solution-focused thinking. The simple formula goes like this:

The Ray Dalio Formula:

• Pain + Reflection = Progress

Ray's formula was developed from personal experience. Back in the early 80s he bet heavily on a bear market and lost everything. He had to lay off everyone at his company and had nothing left for himself. In Ray's own words: "I went broke and had to borrow $4,000 from my Dad."

But, this wasn't the end of Ray's story. As you probably know, Ray Dalio went on to become one of the richest people in the world - the founder of Bridgewater Associates and a billionaire.

For me personally, during this time of treading water, Ray's formula helped me reflect honestly on my experience at my former job to better understand how to pave a better path forward.

I realized through deep reflection and many journaling sessions that there were many things about the job that didn't align with my skillset, passions, or deeper purpose. With these key elements missing, how could I be successful?

By the end of September of that year, I stopped seeing my job loss as a failure and instead as a learning experience and stepping stone. I would take all the skills I gathered, of which there were many, and apply it to my next venture.

For me, the next venture ended up being my own business which I still run nearly five years later. I guess I never found another boat and have been swimming ever since.

And over the course of these years, there have been many other instances where I've needed Ray's formula. In fact, every week, there is a setback of one size or another that requires me to reflect and bounce back.

If you're experiencing a setback in your career or pain in your personal life, remember Ray's formula. We can reflect on the painful experience, learn what to do differently next time, and then apply it.

This is what progress looks like.

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