Inspiration: Ray Dalio

I’m now at a stage in my own life in which it is much more important to me to pass along what I’ve learned about how to be successful than to seek more success for myself”

A fantastic sentiment from the founder and leader of one of the world’s successful investment management firms, Ray Dalio. His perspective echoes that of many of the experienced professionals who join Protagion as mentors – a number tell us they benefit by passing on their knowledge and experience, and extending their success through others.

​His career and development
Ray Dalio founded Bridgewater Associates in 1975. While he describes it as a “global macro firm”, it is also a hedge fund which uses quantitative methods, focusing on allocating money to investment choices based on risk (“risk allocations”). The vast majority of their investors are reported to be institutional. Bridgewater describes itself as: “a community of people who are driven to achieve excellence in their work and their relationships through radical truth and radical transparency.”

As Ray himself learned and grew over his career, he wrote down principles which he “acquired over a lifetime of experiences, mostly from making mistakes and reflecting on them” i.e. adapting through trial and error. He is seen as a hyperrealist, preferring to work with reality as it is. He believes that a successful life is a result of three components: (i) big dreams, (ii) embracing reality, and (iii) lots of determination. 

In 2005, as Bridgewater was taking on hundreds of new employees, Ray decided to codify his principles into a handbook which was distributed to all employees. The New Yorker described it as “partly a self-help book, partly a management manual, and partly a treatise on the principles of natural selection as they apply to business”.

Interestingly, in 2011, Ray relinquished his CEO title to take on the role of “mentor” at Bridgewater. The New Yorker described how Ray compared himself to Lee Kuan Yew, the long-serving Prime Minister of Singapore who handed over to a successor in 1990 but retained great influence thereafter.

Recently Ray released a 30 minute animated video of his Principles – well worth a watch.​

More detail on Ray and his views
Ray is argued to have a ‘debater’ personality, implying that he’s big picture, extroverted, spontaneous and logical. Many of these elements show up in his view of the world – for example, he sees problems as puzzles, which when solved, give him principles for dealing with similar problems in the future. He says: “I learned to treat pain as a cue that a great learning opportunity is at hand”.

His mature humility is appealing, and he often references his arrogance when he was younger (including during his 2017 TED talk). He summarises one specific experience: “being so wrong, and especially being so publicly wrong, was painfully humbling”. After that experience he learnt to have a “healthy fear of being wrong” and speaks of his ongoing learning: “I still struggle to make the best decisions and I still make mistakes and learn new principles all the time [through reflection]”. His dispassionate ability to reflect on situations also points to his logical and big picture style, and he insists: “I don’t know much relative to what I need to know. Whatever success I’ve had in life has more to do with my knowing how to deal with my not knowing than anything I know”.

His steps to success (described in the video) are:

• Step 1: Know your goals and run after them - “you need to really understand yourself and know what you want to achieve”
• Step 2: Encounter problems that stand in the way - “to evolve you need to identify the problems”
• Step 3: Diagnose the problems to get at their root causes
• Step 4: Design a plan to eliminate the problems / get around them
• Step 5: Execute those designs

Risk and reward

• “Risk and reward naturally go together… to get the most out of life one has to take more risk, and... knowing how to appropriately balance risk and reward is essential to having the best life possible.” 
• “My struggling never became easier because the more capable I became, the greater the challenges I would take on.”
• “Striving hard for big things is bound to lead to you to painful falls. It’s just part of the process. Such setbacks will test you – they sort people.”
• “Some think hard about what caused their setbacks, learn lessons, and continue progressing towards their goals.”

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Personal barriers we face
Ray describes the “main impediments that get in the way of good decision-making” are our ego, and blindspot barriers. He’s a great believer in “acknowledging your weaknesses objectively”, recognising that others can help us to see things as they truly are.

​Learning from (and with) others
Over time, Ray learned to “seek out the most thoughtful people I could find who disagreed with me. I didn’t care about their conclusions, I just wanted to see things through their eyes, and to have them see things through my eyes, so that together we could hash things out to discover what’s true. In other words, what I wanted most from them was thoughtful disagreement.”

The value in alternative perspectives is that “you can get help from others who are good at what you are not, who are wired to perceive things you can’t. All you need to do is let go of your attachment to having the right answers yourself, and use your fear of being wrong to become open-minded to these other views.”

Ray also describes how he distinguishes between good ideas and bad ones by “believability-weighting peoples’ thinking”. His concept of an “idea meritocracy” is where everyone thinks independently, and then works through their differences to arrive at the best solution. He notes that “by nature, most people’s greatest strengths are also connected to their most significant weaknesses”, so having a team of independent thinkers allows you to benefit from the best of everyone.

As he worked longer and matured further, Ray began to realise that “Eventually the success of the mission and the wellbeing of the people alongside me became more important than my own success. I also started to see beyond myself, and wanted others to be successful when I’m no longer here. I realised that if I fail to do that, I will be a failure. I struggle with this now.” It’s likely this desire to leave a legacy beyond his successful investment firm motivated him to write the book*, and share his principles more widely through the video. Thank you Ray for sharing your insights with us and encouraging us to “struggle and evolve well”.

His book: Principles: Life and Work *
And a (free) summary of his principles at:  https://inside.bwater.com/publications/principles_excerpt

* Protagion is a participant in the Amazon EU Associates Programme, an affiliate advertising programme designed to provide a means for sites to earn advertising fees by advertising and linking to Amazon.co.uk. The links with * participate in this programme.