5 Important Lessons from Ray Dalio's Life Principles
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5 Important Takeaways From Ray Dalio’s Life Principles

Every once in a while, there’s a book that comes along and absolutely short-circuits the chain between knowledge and experience.

Ray Dalio’s Principles: Life and Work is that book.

In a hefty 500+ page tome, the second richest hedge fund manager in America and the founder of Bridgewater Associates shares the key principles that allowed a middle class kid from Long Island to become one of the world’s most influential people.

There are lessons in the book, that if taken to heart, can change your view of and how you operate in the world.

Overall Theme: Become incredibly clear on who/what you want to be

“Realize that you are simultaneously everything and nothing – and decide what you want to be.” – Ray Dalio, Principles: Life and Work

Everyone is born with a blank slate (with some added intrinsic abilities). From birth, all potentials lay open to us.

Unfortunately, circumstances give some people a greater advantage than others.

However, anyone can be anybody – within reason. If you’re 120 pounds, you’re probably not going to be drafted to the NFL.

That still doesn’t shut the door in your face. You can find something fulfilling to do with your work and personal life. Your job is to identify what that is as soon as you can and align everything you can to being that person.

The lessons in Principles give you specific tactics you can use to help you in your quest to achieve your personal goals.

The following lessons derived from the book relate to the overall theme of personal self-actualization.

Lesson # 1: Get real

“There is nothing more important than understanding how reality works and how to deal with it.”

Interestingly enough, this is the first principle that opens up the “Life” section!

Understanding how reality works and operates will allow you to see cause and effect more clearly. This means you can literally shape reality to how you want it to turn out.

Here’s three ways to help you do that:

  1. Understand that you operate within a larger matrix called “reality”/ the universe/ the world
  2. Take inventory of where you are right now and where you want to be
  3. Realize that there are certain things you are better/worse at than others

It may hurt, it may shatter your ego, but once you adjust yourself to how reality is instead of how you want it to be – you open yourself up to change. You start to work with what you have instead of wishing and complaining.

This is how you develop a super-strong locus of control.

Lesson # 2: Always be evolving

“Evolution is the single greatest force in the universe; it is the only thing that is permanent and it drives everything.”

Change is the only constant in the universe. Without it, human beings (Homo Sapiens) would not exist.

Everything in the universe is steadily moving towards “perfection”.

Since you are part of the universe (lesson #1), you too must evolve. You have to continually push yourself to new levels of growth and achievement day by day.

Dalio makes a really important point in the book when he says that money, status, and all other sorts of artifacts of outward material gain are merely the bait. It’s the pursuit after these things that forces us to evolve and become greater people.

This is why when a guy chases after a girl, he ends up doing everything he can to attract that girl. He starts dressing better, going to the gym, making more money…everything he can do to get with her.

Sexual stimulation/passing on our DNA (our highest drive) is the bait – evolution is the goal.

Being cognizant of this quirk allows you to operate more effectively and with more autonomy in this seemingly chaotic world.

In Dalio’s view, you are a machine operating within a machine. This means you need to adapt to the rules. Evolution is one of the rules.

Evolution propels the universe and everything in it to higher levels of optimization. Click To Tweet

Lesson # 3: Understand your/everyone else’s motives

“Everyone is like a Lego set of attributes, with each piece reflecting the workings of a different part of their brain.”

Continuing this thread from evolution, you need to understand that everyone is looking out for Numero Uno for the most part, most of the time.

Many people are in a continuous “fight-or-flight” state for most of the day due to all of the stressors and stimulation (like social media) we experience on a daily basis.

When a human is in a fight-or-flight state, they are primarily “me” focused.

This isn’t something that should depress you, it should excite you. Why?

Because if you know how to appeal to people’s motives, you can get them on your side.

Since we are all wired differently, we all have differing motives with a good amount of overlap.

Some people want to be actors, others want to be programmers.

Some people want to be monogamous, others want to be polyamorous.

Some people want more wealth than King Solomon, others are fine with a modest amount of money.

Looping in Napoleon Hill’s Think and Grow Rich into this equation, all desires can be classified under one or more of the nine motives.

These are:

  1. Self-preservation
  2. Financial gain
  3. Love
  4. Sexual expression
  5. Desire for power and/or fame
  6. Fear
  7. Revenge
  8. Freedom
  9. Desire to create or build

Everyone, no matter rich or poor, old or young, black or white – is motivated by one (or more) of those motives at any given time for any given goals or objectives.

Here’s a really simple example: you start working for a company right out of college. You are paid X amount of money. You want to increase it to Y amount of money.

How do you do that?

Well, company is basically a hive mind of people working to achieve a common aim, a common motive.

Well, you need to ask yourself: what is the company’s main goal/motive?

For most companies it is:

  1. Financial gain
  2. Self-preservation
  3. The desire to create or build
  4. Desire for power and/or fame (not always, but in many cases)

In a company, the employees are merely the means to do so (this is why layoffs occur by the way, the attempt is to either preserve or expand the company).

Knowing this, you do everything you can to appeal to these motives. What action appeals to these motives?

More sales.

Every action you take from the time you step in the office to the time you leave is centered around this.

If you are responsible for driving sales, you’ll be seen as valuable to the company.

They’ll say:

Hey Jeff, we really like you. We think you’re a super-swell employee. We want you to stick around, so here’s an extra 5,000 in your pocket…keep it quiet, though. No one else got a raise this year.

This is very good.

This is positive reinforcement for you.

Since you know actions that will lead to this outcome, you increase your activity in this regard.

This in turn benefits your personal evolution (and your bank account + the company’s). It’s a win-win for everyone involved.

It doesn’t always work that smoothly, but that’s the basic gist.

An ideal working environment will allow you to use it to your advantage.

This give and take is at the core of social intelligence.

If you don’t know what motivates people, you can’t form effective personal and professional bonds with them.

If you can’t do that, you’re in for a really, really rough go in life.

Lesson # 4: Use pain to push you to greatness

5 Important Lessons from Ray Dalio's Principles

“If you don’t let up on yourself and instead become comfortable always operating with some level of pain, you will evolve at a faster pace. That’s just the way it is.”

Without pain, there is no progress.

This isn’t just physical pain, but mental pain and emotional pain as well. I’m not talking about the type of pain that’s detrimental, like a broken leg. Rather, it is the pain that indicates a strain, a break from inertia.

The type of pain that you get when you focus for long periods of time, push a weight you haven’t lifted in the gym, or play something an instrument that you never have mastered – that’s the type of pain you should aim for.

All of these are examples of deliberate practice.

In most cases, pain should be a sign that you are progressing in your life. If you’re not expericing some degree of pain, you are probably not pushing yourself the way you should.

Without pain, there is no progress. Click To Tweet

Lesson # 5: Understand your two selves

Your Two Selves


“If you do anything just about frequently enough over time, you will form a habit that will control you.”

Most people think they’re in control when in reality, they are a servant of their subconscious mind.

There are two “yous”.

The conscious, rational you; is governed by the prefrontal cortex.

Then there’s the subconscious, hidden you; this is governed by the amygdala, basal ganglia, hippocampus, and tons of other structures in the brain.

The subconscious determines 90 to 95% of your actions on any given day. It is where your predominant mental attitude and habits originate.

Your goal is to align your conscious and subconscious minds so you can achieve your goals with no resistance.

This is easier said than done but breaking your bad habits is a good start.

I personally think Principles: Life and Work is a must read for anyone. If I were to read this several years ago, it would have saved me a long period of trial and error. The lessons in it are invaluable. This book is a modern classic.

Have you read Principles? What do you think about it? Share your thoughts in the comments below!


  • Del

    October 19, 2017

    This was straight up knowledge, Sim.


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