Principles by Ray Dalio

Think for yourself to decide, 1. What you want 2. What is true 3. What you should do to achieve 1 in the light of 2.

Shifting the perspective from “I know I’m right” to “how do i know I’m right”

Seek out the smartest people who disagree with you to understand their reasoning.

Develop, test and systemize timeless and universal principles

Balance risks so that big upside while reducing downside

Partnering your brain with a computer, to dive deeper into a field and make predictions based on the historical data provided along with assumptions.

All organizations have 2 types of people : those who work to be a part of a mission, and those who work for a paycheck.

Proper diversification - reduce risks without reducing returns

Having a process that ensures problems are brought to the surface, and their root cause diagnosed, assures that continual improvements occur.

When faced with a choice between 2 things you need that are seemingly at odds, go slowly to figure out how you can have as much of both as possible.

Look at the patterns of things that affect you in order to understand the cause-effect relationships that drive them and to learn principles for dealing with them effectively.

Embrace reality and deal with it Be a hyperrealist : 1. Dreams + Reality + Determination = Successful life ( the pursuit of dream gives life flavour, being hyperrealist will let you choose your dreams wisely and then achieve them) 2. Truth (accurate understanding of reality) is the essential foundation for any good outcome. 3. Be radically open-minded and radically transparent ( we either have to discover what’s true for ourselves or believe and follow others) 4. Look to nature to learn how reality works ( we are the only species that can go above yourself and look at yourself within your circumstances and within time including before and after your existence. Our brain is more evolved but that means it can cause more confusion too as compared to animals. While looking at a situation follow 2 approaches : 5. 1. Top down (bigger picture first), 2. Bottom up (smaller details first) 6. Don’t get hung up on your views of how things should be because you will miss out on learning how they really are. ( most people call something bad if it is bad for them or for those they empathize with, ignoring the greater good. Nature does not do that, it seems to define good as what’s good for the whole and optimizes for it) 7. To be good something must operate consistently with the laws of reality and contribute to the evolution of the whole, that is what is most rewarded. 8. Evolve or die ( evolutionary cycle is for everything - countries, economy, companies. Fail, learn and improve quickly) 9. Evolving is life’s greatest accomplishment and it’s greatest reward 10. Individual’s incentives must be aligned with the group’s goals. ptimizing for the whole - not just for you. 11. Adaptation through rapid trial and error is invaluable 12. Realize that you are simultaneously everything and nothing - and decide what you want to be. ( how do we matter and evolve? Do we matter to others who also don’t matter in the grand scope of things? Or does it not matter if we matter so we should forget about the question and just enjoy our lives while they last? ) 13. What you will be will depend on the perspective you have. 14. It is a fundamental law of nature that in order to gain strength one has to push their limits, which is painful. 15. Pain + Reflection = Progress 16. No matter what you want from life, your ability to adapt and move quickly and efficiently through the process of personal evolution will determine your success and your happiness. If you do it well, you can change your psych reaction to it so that what was painful can become a craving. 17. Weigh second and third order consequences 18. Own your outcomes ( have an internal locus of control, connect what you want with what you need to do to get it and find courage to carry it through) 19. Look at the machine from a higher level 20. Think of yourself as a machine operating within a machine and know that you have the ability to alter your machines to produce better outcomes. 21. By comparing your outcomes with your goals, determine how to modify your machine 22. Distinguish between you as the designer and you as a worker with your machine 23. Look at yourself and others objectively, to avoid bumping into your and their weaknesses again and again 24. Ask others who are strong in areas you are weak in 25. It’s difficult to see yourself objectively, so you need to rely on the input of others and the whole body of evidence.

Use the 5 step process to get what you want in life ( 5 step loop ) ( → Have clear goals, → Identify and don't tolerate the problems that stand in your way, → Accurate root cause analysis, → Design plans to get around the problems, → Do the necessary things to push the designs through to results)

Have Clear Goals 1. Prioritize, Don’t confuse goals with desires ( desires are first order consequences ) 2. Decide what you really want by reconciling your goals and desires 3. Don't mistake trappings of success for success itself 4. Never rule out a goal because you think it’s unattainable 5. Nothing can stop you if you have flexibility and self accountability 6. Knowing how to deal with setbacks is as important as knowing how to move forward 7. Identify and don’t tolerate problems 8. View painful problems as potential improvements that are screaming at you 9. Don’t avoid confronting problems because they are rooted in harsh realities that are unpleasant to look at 10. Be specific in identifying you problems and prioritize them(precise RCA) 11. Diagnose problems to get to root cause (RCA) 12. Focus on “what is” before “what to do about it” 13. Distinguish between proximate cause and root cause 14. Design a plan 15. Reflect on where you have been and how you reached the current point before designing how to move forward 16. Problems = combined outcomes of your machine 17. Imagine creating a movie, who will do what at what time for planning 18. Measure against your plan’s progress (written) 19. Push to Completion 20. Establish clear metrics to make certain you are following the plan 21. Weaknesses don’t matter if you find solutions 22. Find your biggest flaw in the above mentioned 5 step process ! 23. Find your biggest roadblock and deal with it 24. Take help when required, everyone needs it some time 25. Understand your’s and other’s mental maps and humility

Be Radically open minded 1. - Recognize your 2 barriers - ego and blindspot 2. - Understand your ego barrier, subliminal defense mechanisms that make it hard to accept mistakes and weaknesses. Find your deepest seated needs and fears which are not accessible to your conscious awareness 3. - Your 2 types of you fight to control you. Higher level you (logical/conscious) - lower level you (emotional/subconscious). If you feel anger embarrassment after doing something - the lower level you won vs the thoughtful higher level you 4. - Understand your blindspot barrier . where you don’t see things accurately. 5. - Gather the relevant information first, then decide. Considering opposing views to make decisions will only broaden your perspective. 6. - Suspend judgement and empathize to really gain someone else’s perspective 7. - Be open minded and assertive at the same time - hold and explore conflicting possibilities in your mind while moving fluidly towards whatever is likely to be true based on what you learn