The KEY PRINCIPLES For Building A Life Of WEALTH & SUCCESS | Ray Dalio | Transcription

Transcription for the video titled "The KEY PRINCIPLES For Building A Life Of WEALTH & SUCCESS | Ray Dalio".


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Intro (00:00)

My son in 2014 gave me a book by Joseph Campbell called "Hero of Thousand Faces" and basically he described that, you know, "I'm ready to crash this" and then you're faced with that crash. And you either have an epiphany or you don't. Now you either walk off the field and say, "Hey, I don't want to do this anymore." And you give up on that going after your audacious goals. Also, I'm in investment management business that you have to bet against the consensus and you have to bet against the consensus and be right. Or as an entrepreneur, I'm an entrepreneur. I had to bet against the consensus and be right. And so to gain that humility was the thing. So you either get off the field or you learn. Hey everybody, today's episode is brought to you by our very own Impact Theory University. Enjoy the episode. Hey everyone, welcome to Impact Theory. Today's guest is a number one New York Times best-selling author and the founder of the most successful hedge fund of all time. He's returned more to his investors than anyone else in his space, which would be amazing under any circumstance, but becomes even more dazzling when you consider the fact that he started out as just another middle-class kid from Long Island. He struggled in high school, barely gotten to college, but over the course of one of the most storied investment careers in history, he turned himself into one of the 100 wealthiest people on planet Earth. With roughly $160 billion under management, Fortune Magazine named his company Bridgewater, one of the top five most influential private companies in the US, and Time Magazine named him personally as one of the 100 most influential people alive. He's been called the "divinci of investing" and given his accurate prediction of the 2008 financial crisis, it is not hard to understand why. Using principles that he'd established over decades, he and his team were able to recognize the coming implosion and position his clients to not only weather the storm, but to come out far better because of it. Now, in a new phase in his life and armed with the conviction that there's nothing inherently special about him, and that his methods can be adopted by anyone, he has embarked on a mission of both financial and ideological philanthropy that has made him one of the most sought-after voices in business leadership.

Ray Dalio'S Philosophies And Principles

Ray Dalio (02:16)

So please help me in welcoming the author of Principles and Big Debt Crisis, The Legendary Ray Dalio. Thank you so much for being here. Thanks for the... Dude, your book... We stalked you. So that thinks is definitely not necessary, man. What you have done with your ideas and the fact that you're taking the time to put them out there is absolutely transformative in the way that I think you were hoping they would be. And as somebody who, when your book came out, I was in the middle of building my first big company, and we had raced to 3,000 employees over the span of five years, and it was dizzying to say the least. And when I read the book, it made me realize that for the first time in my life, I'd really had a failure of imagination. It simply didn't cross my mind that you could expect a group that large to be radically transparent with each other and to have radical candor as a core part of the company. And so reading the book, it was sort of my Roger Banister in the four-minute mile, it was like until you know that it can happen, you just fail to even consider it as an option. And so reading what you've done and the kind of culture that you've built and the different questions that you ask was really transformative. So thank you for all of that. I'd say back at you because like you have your journey, we're just talking about your journey and the same things happen over and over again, right? And so if we go back to the themes, and that's really cool, and what's also very cool for me is the fact that, you know, like we're moving ahead and we're playing with literally the tools and how to do that. And it's so great because, you know, I'm 70 years old and the thing that I want more than anything is to pass along with those things that have been helpful. And so it's cool. Thank you for having me here. Dude, absolutely. So talk me briefly. You've talked about this, so we don't have to go into a lot of detail. But if you can't just super fast, give us the thumbnail of how you realize that you couldn't trust that you were always right, which was I think a pretty powerful insight. Yeah, well, I guess like you, you know, you come along and how do you find out? You get whacked in the head. You get whacked in the head enough times and you say, I could be wrong.

How Do You Know I'm Right (04:54)

And how do you know I'm right? In my case, the really big case was that in 1980, 81, I had calculated that American banks had lent a lot more money to countries that would not be able to pay the debt back, a lot of money, banking crisis. And that was very controversial point of view. So I'm talking about, wow, a big thing happening. And then so it got reported. And then Mexico defaulted on its desk in August 1982. And I thought that we're now going to go into an economic crisis because a number of the other countries followed and that was transpiring in that way. And I saw my business in '75, by the way. And at 82, I think we had like eight people and we loved each other and we were doing that thing. But I couldn't have been more wrong. It was the exact bottom in the stock market. So I was very publicly wrong and even more painfully, I had to let go of those people. And I was so broke that I had to borrow $4,000 from my dad to help to pay for family bills. I mean, it was so painful. But you know, okay, now you got a baseball bat to the head and to how many does it take? And then you think, okay, how do I know I'm right? How do I know I'm right? So I was very audacious, you know, going after my goals and whatever my opinion. I didn't want to lose that. But you know, now you're faced with the choice. You know, like the way I look at it is, I want a great life. How do I have the greatest life? But I can have the risk of being wrong.

How Do I Have The Greatest Life? (06:28)

And then everything changed because I figured it out. You talk about the two use, which I think is extraordinarily powerful. I'd love for you to define that. And then also knowing that one of those uses is the emotional sort of ego side of you. How did you get out of your own way? Like that, when you say there's nothing really extraordinary about you, I will say that that ability is rare in and of itself. And so that you could get, you self-identified saying, oh my God, even now when I look back on me testifying before Congress, I am shocked at how arrogant I was. So to go from that to actually welcome the humility and make the change, I'd love to know how you did that. You know, my son in 2014 gave me a book by Joseph Campbell called Hero of Thousand Faces. And basically he described that these things happen, you know, everybody crashes. And then you're faced with that crash. And you either have an epiphany or you don't. Now you either walk off the field and say, hey, I don't want to do this anymore. And you give up on that going after your audacious goals. Or you gain really humility. You know, how do you feel that you're going to be wrong? And so I think then that whole notion is, you know, to come back with the finding the smartest people I could find who disagree with me. Also, I'm in investment management business that you have to bet against the consensus.

The Smallest People Who Disagree With Me (07:58)

Otherwise you can't make money because it's in the price. And you have to bet against the consensus and be right. Or as an entrepreneur, I'm an entrepreneur. I had to bet against the consensus and be right. And so to gain that humility was the thing. So you either get off the field or you learn, right? And so that was the process that I went through. So I want to get back to the two years in a second. But were you already meditating by this point? Yeah. And do you think that meditation gave you the ability to get out from under the control of your emotions? Yes. Meditation was fantastic. Meditation is the biggest gift that I can give anyone.

It Is the Biggest Gift of Meditation That I Can Give Anyone (08:42)

And I would say more than anything, it is whatever reason for success I've had. Because it allows one back to the two years. I'll clarify. What I mean is that in your mind, we think, what do you want? And the reality is when you look at the neuroscience and psychology, that there are different parts of your brain that want different things. And so in the simplest sense, there is the logical part of your brain that you're conscious of. It's called the conscious. And you think you're being logical and you want to make those decisions. And then there's the subliminal below the limbic system, part of the brain, which is the emotional.

Going Beyond Your Ego (09:30)

And it's not as conscious to you. But it has more of an influence on you than really the logical one. And so they're not aligned. And so when you're experiencing that pain or, let's say, the ego, right, there were two main things. You got an ego barrier and a blind spot barrier. If you can get past your ego barrier and you get past your blind spot barrier, you can accomplish anything because you also know that you don't have to do everything to, you don't have to figure it out yourself. You can take in from other people the different ways to approach things in the best possible way. And so the realization that we all are really struggling with ourselves and to think which is in control. Meditation helps to deal with the alignment of those two things because both are valuable. In other words, intuition, imagination, the things we really love come from our subliminal usses, our needs, whatever they may be. They come from here, that subliminal. They may be valuable. They may be scare damaging. You don't know the difference. And so when they come up and you're looking at those with your logical mind and you can align those things, you're probably in good shape. If you can do that, that alignment between the subliminal and the logical, and you can do that with other people so that you can triangulate with other people and say, does that make sense? And get alignment. That alignment is the path to the future because you only have to know what the best things to do are. You don't have to have them all come up from your head. And for God's sakes, don't be overly opinionated because just because you have that opinion, it doesn't mean it's true. So that's where the two use and the alignment really is so important.

Meditation Accelerates the Process (11:27)

I want to talk about the process of getting those two things aligned, tying this into meditation. So in my own experience, meditation is a stillness. It's a quiet from the chatter of the mind and more maybe profoundly than that. I can feel my brain shifts into a different gear. So maybe it's less linear thinking. It's more lateral. I'm making connections that I might not otherwise make. So is it in that still in that quiet where you're able to look at your what's bubbling up from beneath the limbic system, your emotional life, you're able to look at that without judgment and then able to say, okay, but this is what I'm trying to do sort of consciously. These are my plans and all of that. And now how do I, are you altering either of them or are you beginning to say, I need to understand if this is a useful emotional driver or a destructive emotional driver, like what is that process? I think you describe it very well. And when you go deeper, by the way, you go literally into your subconscious. So you're creating a connection when you transcend, I do transcendental meditation. When you transcend, I am not conscious and I'm not unconscious. I am in the subconscious. I'm not aware. But if somebody want to make a little noise like that, oh, I would, so it's not like being asleep. And that's also, by the way, where creativity comes from. It's like you go take a hot shower and a great idea comes not because you're muscling it. So when you're having that, then you're calm and your natural state. And then these things bubble up and it helps that alignment. So you say, okay, let me look, go above myself. Let me, let me go above myself and look at myself within the context of my circumstances. What is around me? How does that work? How does reality work? Okay, if I do this, what are the consequences? And so the going above it and just saying, I'm responsible for my decisions, my life. And how do I navigate the things there that I can pull the levers of? Who do I get? How do I do? How do I deal with those? And going above it in that calm way is really what it's about. And when you do it well with others, so you triangulate. That's why I have the radical truthfulness and the radical transparency. When you have that radical truthfulness and the radical transparency, you're triangulating with others. You're going above it with them and you're just looking at that circumstance and you say, okay, well, we're in the same goal or are we? And then how do I navigate those so that we get to where we want to go? Because if you're forming your company, you've got your company, we're on the same mission together, right? So now let's all go above ourselves. What are your strengths and weaknesses? How do we get at what's true? And how do we do that with transparency?

Your Life is a Loop (14:32)

And that's it. Yeah, man, so, so powerful. I'm putting into action. I'm really seeing exactly how it begins to allow. And I think truth is probably what you call hyperrealism, the getting to such an objective look at what is true. And going back to sort of an objective look at that emotional state, which I think is where a lot of people struggle, one of the biggest and most profound, probably the only lightning rod moment in my life where it's like, whoa, my life can be divided into before that literal, like instantaneous recognition. And after everything is completely different. And that was the first time where I realized that I was being driven by something that I had not yet recognized, which was I was telling everybody that I wanted to generate wealth in my life, but I was acting like I just wanted people to tell me that I was smart. And so the, like, friction between those, like, hit this collision. And so at the time I was just a copywriter, and the guys who had later become my partners at the time were my employers. And we got this huge fight over something stupid. And I was arguing and arguing and arguing for my idea. I needed my idea to win because I had, they were just so much farther ahead than me. They were smarter than me in that they can process data faster. And that that's just true. Like they could think through things more rapidly than I could. So I was like, I have an inferiority complex over how fast they think. And they're like 15 years ahead of me as entrepreneurs. So I just always feel like a buffoon. And so I'm starting to really feel badly about myself. And so I'm arguing for this dumb idea, arguing, arguing, arguing. And then finally I wear them down and they agree. And I was like, shit, I know it's the wrong idea. Like there's a voice in my head screaming. You know this is a stupid idea. Stop arguing for it. But I needed to win. And so when they left, I thought, okay, whoa, what's real? I just need to know what's real. No judgment on me. If what you want is to get rich, you have to change the way that you're acting immediately. But if what you really want is to just feel smart, you need to leave this company. Because budding heads with them every day and feeling inferior is never going to get you there. And so in that I realized, wait, there's actually a third option where I could value myself entirely for learning. And if I switched my identity over from being smart, being right, being good, being worthy to just, I learned, that's what I do. Then everything will change. And it did literally like that. Like I remember that day so clearly.

Principles in Action: Example of Debt Crisis in 1982 (16:55)

So to me, what you're describing is just another one of those, right? Go deeper on that concept. The notion that everything loops that history repeats. Because I think people get it from like a US history class, but they don't necessarily understand it in their own life. There's practically nothing that hasn't happened before really if you look at the theme. So when I take your particular case, I can digress into it. But I won't. I won't. I'll come back to that in a second. Almost everything that happens has happened many, many times before. And just like I described, there's the hero's journey and there's this and that. There's that particular path. And the whole thing happens over and over again. So my reaction to what you're saying is, yeah, that's absolutely right. That's a winning strategy. So if you step back from that and you write, okay, what happened to you? What happened to you is what we're talking about. You went above yourself. Okay. So you exemplify it. Okay, here are the things. You went above yourself. Now you could have had the ego thing, the big old barrier. Okay. The ego barrier is going to be the thing that's sort of going to kill you. Then by reconciling what your subliminal desires were, okay, I want to be judged as smart and then connecting that with your intellect and saying, okay, now intellect, what is really going on here? Okay. And then to be able to step out of that, now you just did it alone, but you could do it with others and it's even better. And so you figure out, oh, okay, this is that. Here's what the choices are. Here's what how reality works. And so I'm just saying, you did what we were talking about, right? And if everybody gets that and really understands how to go do that, the number, the two big things is, how do you get your alignment of your lower level, you with your upper level, you, how do you get past your ego and your blind spot? And we know what the ego barrier is. Like, I got to be right or whatever it is, or I'm not good at this, the blind spot barrier is the realization that people actually see things different. They see different things. Like somebody will see the big picture, somebody will see the detail. They'll focus on different things, almost like a color spectrum type of thing. And if you realize that you will see a part of that spectrum and other people will see the other part of the spectrum and so that you really need to, when you go above yourself, you really need to orchestrate all those ways of seeing because you are not just one of those people that's got to do it yourself, your way of being the success is to go above it and be the orchestrator and know what you're good at and what you're not good at. So it's almost like if you want your life to be successful, you will not let yourself do certain things because you're just no good at them. Once you get that picture down, then you can find the past wherever the paths are. You're open-minded because you, now you've given up your ego barrier and your blind spot barrier. So your particular case just was another one of those. Yeah, the concept of just another one of those, I think is it's bizarrely easy to miss in your book. And so I want to linger on this point for a second. And it's funny because people ask you this question all the time and you give the same answer. You're so consistent. And yet people don't spend the time that you spend. So let me encapsulate. You've done so well as an investor. It's kind of crazy. And so needless to say, people are like, all right, what's the strategy? And your answer is actually usually not specific. Your answer is understand the historical context. Understand the historical context and get smart people around you so you're not making decisions by yourself. So the notion of it's another one of those is looking at investing, looking at the human condition, looking at your own life as this thing that has these repeating elements. Every dimension of everything, the way is another one of those. And so that's how you could, if I can get people to think what I want to convey what that means. And then I want to then understand how to think at the principal level. Because then life becomes so much easier. Because if you have the principal, and what I mean by that is like you could look at all the things that are coming at you. And they're just the things coming at you. If you instead think of each thing as being like a type of species, think of that as an like an animal species or something. Okay, what one of those is it? And how do I deal with those? And you have your principal for dealing with those. So you have the species coming in, you have a principal that lines up with the species. So now there's no guesswork or refiguring it out. I figure it's like, I don't know, it's a type of snake that's coming at you. But everything is another one of those. So when you start to think about how do I deal with that? How does reality work? And how do I deal with those? So the way it looks to me, I'll speak figuratively to help convey the image of what I mean by that. Maybe there is something like 50 different personality types. I don't know what the exact number is. And they are all living out the same scripts hop and maybe they're just 50 different scripts. And then through those, maybe there's certain X hundred things through time. And it seems all confusing because we're looking at them bit by bit. It's like you're in a blizzard, a snowstorm, and each of these bits come at you and so on. If you kind of step back and just say, okay, okay, what one of those is it? And it's happened before and it's happened to different people. So let's say, for example, you have a kid and you think, okay, now I'm a kid and you could just sort of say, okay, now you're parenting. But whatever it is, you can sort of say, hey, it's happened before a million times. And in that particular circumstances, so when you realize everything happens over and over again, pretty much for the same kind of reasons, okay, and you understand that. And you can almost look at who's been through it before, who knows how it works, how do I just navigate that thing, what are my principles for that? Then it's great. The reason I discovered it accidentally, I discovered this accidentally, is because I got in the habit that I suggest you get into and other people get into.

The Importance of Writing Down Principles (23:27)

And that is whenever you're in a situation where you're making a decision, important decision, just pause and write down what type of decision was it and why did I make that decision that way? That's writing down your principles. It's kind of your recipe for success. And we could talk about it. And then every time I'm in a situation, I'll write down, why did I make that decision? And we could look at those criteria. Did that make sense to do that decision that way? Would you have different criteria and so on? And you do that over a period of time, okay? And then you have your principles. And then so they're just your reasons for making your decisions and what matters to you, right? When you do that, so that's why I'm encouraging you because you're going through these and then you have found a path in life. I viewed your story. What you just told me is just another one of those. Now you keep doing it, it'll become apparent to you how everything's another one of those because what will happen is the next time around, you're going to find, I don't know, let's say you're firing somebody, use that as an example, you would say, okay, now I'm firing somebody again. Okay, now let me just kind of reflect, would I modify that principle? And how would I do that? And then, okay, now maybe you're firing somebody who's been with you for 10 years and you love. And that's not the same as firing the son of a bitch who you want to get rid of. So then you refine that. How should I do with that one and that? And why does it make sense? Because that reflection, why does it make sense? Why does it make sense? And really wanting truthfulness, you know, not worried about being embarrassed, making mistakes, we're going on the struggle with all of you together is a good thing. Yeah, so the, how do you define a species? Like how do you begin to codify all this stuff and go because I think it's all too easy to get lost in the, well, this isn't another one of those. This isn't just firing somebody, this is firing somebody that I love. And so, no, there's, you know, this is all just so different. It's simple because all you have to do really is to sort to say, if you start to think everyone's another one and I was when I'm making the decision, I just got to write down why I made the decision. I don't care how you title it. Okay, just write down. Okay, okay. What do you criteria? Make it write it down. Well, you'll see that they're close cousins. You know, let's say if you're saying, is it a different one because it's a close relationship that you've had for a long time or somebody is new? Okay, well, you'll see those two things are close together. Okay, but it's another one of those things and it changes your way of seeing things. Okay, it changes your perspective. Again, I want to repeat because then life becomes easier because it's not all these bits and pieces. Okay, it's okay. It's another one of those. It gives you an equanimity and not like a ninja. Okay, it's none of these coming at me. Okay, and how do I approach this? And then you can have a conversation. It's just reality. How should you deal with that reality? And if you do that, then you think in a whole different way. Okay, you just want to get to the best way to deal with your realities. You've talked about how about 30% of the people cannot do radical candor.

Radical Transparency (26:50)

Be great for you to. I call radical transparency, but whatever it is. Perfect. So radical transparency. Define what that is exactly. And then what is it about that 30% like, are they they can't get rid of the ego or what is that? It's just what you're talking about. The struggle is between themselves as you go into a conversation and you're looking at that. They find all the radical transparency is saying super hard shit, really direct, nice and clear. They're not good at this. Yes, while simultaneously saying, I don't know if that's true. In other words, if I say that I don't think you're good at that, I'm being honest, but also who knows whether you're good at that. So how do we then go from you think you're good at it? I don't think you're good at it. And how do we go through a process to find out together whether you're good at it or not? How do we go through the process? Well, you're one of my key questions. Okay, the best way to do it is you do it in an agreed upon way. Okay, the idea is, okay, we say, okay, Tom, you're not so good at that, I don't think. Okay, and then we go through the, how would we judge? Can we ask other people? Do we go through this test or that test? How do we find out what's true? Because if you can find out what's true, your life will be better. Like, do you want to know what you're not good at? If you know what you're not good at, it's your life's no problem. Because you don't even have to get good at it. You just have to work with somebody who's good at what you're not good at, right? So there's a path forward when you get out of your head that you got to do that. So the only basic notion is if we were to have a relationship is, and by the way, it's non-hierarchical. You could say, hey, Ray, I don't think you're very good at that. And I'm going to be the same way. I put it in because I needed it. Because I'm worried that I'm going to be wrong. So then you come to me and you say, I don't think it's very good. Well, how do we find out in a non-ego-constrain, objective way, whether I'm good at that or not? Do you actually lay out criteria? Like, do you do? Yeah, we will do. Yeah. Absolutely. How do you come upon that criteria? Would you do this as a one-on-one? Would you do this in a group? How do you begin to tease that stuff out? First of all, in terms of the group, I like to make everything transparent so everybody could watch the same thing happening with anybody. Meaning you would do this in front of a large group of people? No, no. I would say taping. We do a lot of that radical transparency because that way people see is it fair? Is it a good process? So I like to do that discussion. But anybody can do it with anybody, right? But I would like to have that conversation. If I don't think you are good at something and I am relevant to your life or by subversive, we got to work it out. We've got to figure that out together. We're going to do this with your wife in all relationships. In one way or another, you have to find out how you're going to make decisions. There are going to be agreements and disagreements. You have to have the art of thoughtful disagreement. Now, people find their domains differently. Maybe somebody says, "Okay, I'll take care of these things and you take care of that." I don't know. Some people, you know, the traditional household might say, "Okay, I'll take care of making the money out of the man, goes out and he makes money in the world." And then one woman says, "I'll take care of the kids. We're not there anymore." But each role I'm trying to say, in some way, you have to find out how to do the art of thoughtful disagreement.

Art of Thoughtful Disagreement (30:32)

It makes sense. And then also knowing what's good, what you're good at and what you're not good at, it's a good thing to know what you're good at and what you're not good at. What do you do though? When you, let's say you and your wife realize, "Oh, we actually have something that we disagree with how to do with the kids." And that's high stakes. If you do something wrong, you could have a material impact on their psyche and the way that they approach the world. So there's sort of elevated stakes and there's just two of you. Unless you guys had a way of appealing to other people, would it come down? Because you said, "Don't worry so much about what the person's saying. Think about the process by which they got there." Yeah, so I'm saying whenever there's a disagreement between two people that they can't get along on that, they should pause and they should go above it and they should say, "How should we deal with each other when that happens?" In other words, what are our protocols for working ourselves through that so that we can then move beyond that to make a decision? And would a specific protocol in a marriage be something like, "If it has to do with the kids, you have more believability than I do. So therefore, if we can't come to an agreement, we'll go with your decision." That could be one of the protocols. The main thing I'm trying to convey is when people are ordinarily in an argument, they just argue and they don't know the ground rules, they don't have a process in place. So if you look above it and you come up with whatever your rules are, it may be you could have domain, it may be that you have a mutually agreed party that you would say, "Okay, let's plead our cases to and have them mediate it." It could be a lot of different paths could exist to say, "Ah, I think that's a good path when we have a disagreement on how we plead our cases and then move beyond it." But you need to have the path. And that's what I mean by principle level thinking. Go above it. How should it be? Instead of, you know, this type of thing, right? We all need that in order to have successful relationships. It's fundamental, right? When you got this and you're not going above it and saying, "Why do you have this or how should this occur?" Then you've got trouble.

Life Management And Career Strategies

How Bridgewater hires, and fires (33:01)

Now my question becomes, "What is it?" And I know a lot of people watching are going to say, "Okay, I love this. This sounds amazing." But I work in an organization that doesn't do that. So the people who tap out is a two-part question, which is always dangerous. The people who tap out and say, "I can't work at Bridgewater. This whole radical transparency thing freaks me out. What is it that causes them to trip up?" Because that, I think, is the thing people will encounter in other companies where this isn't a thing. So how do people watch out for that? What should they watch out for in people? I can answer in the generals. I'm going to parse your question in a way that I think will answer your question. That'll give a little bit clarity because there are two things going on when you're describing that. Because Bridgewater is very much the opposite of a lot of companies, meaning you could talk about anything. You could talk about how we should be together. You could say, so that's a culture where the person who has this struggle with that, like where they can say, "Hey, I think you're a son of a bitch." They could say that to me. You could say anything you want. And then we try to find out, "Is it true?" And then we work ourselves through it. So their challenge is almost the opposite of the other kind of challenge, which is the case in which you're trying to put in all cases. There is the notion of how are we going to be with each other and reaching that agreement. So, let's say you want to be a certain way with the people you're with, like your wife. It's the same path. If you cannot sit down and have a conversation about how we're going to be with each other because they won't welcome it, and that way of being is an unacceptable way of being for you and your development, get the hell out of there. But you have to be able to sit down and say, "How are we going to be with each other? And will that be good for you? And that will that be good for me?" And you've got to be clear. That's why culture is so important. You know, what kind of culture? Do I have a culture in which I can have those conversations? Or am I going to be in a culture in which I can't? I hear so many cases because now because of I communicate with people on social media. I put the principle there, and we discuss each one of those principles. And I so often run into people who say, "But I can't talk to my boss that way, and I can't have this conversation, and I can't do this and that." And it's very simple thing, like, "Okay, so we're going to do about it." And if I can't talk to you and whatever, and I'm going to not be able to even know what's true because I can't have the conversation, I'm going to have a terrible life. I'm having the life that I don't want. I don't even know the direction. I can't be in the mission with you. And so I'm going to be in this terrible life. Now you have a choice. Do you want that terrible life to be smothered in that particular way? But realize there's a world out there. Don't feel so trapped unless you really are trapped, trapped, trapped, but most people aren't. It's like too many fish in the sea. There are a lot of people who marry. If the first one is not working outright and it really is fundamentally wrong, "Okay, move on." And then your job, it's the same thing. So decide, "Okay, where you want to go?" Because those are the path. Own it. What are you going to do about it? You have to move on. So either have a great relationship, like you and your wife, or the same at work, or move on. What are some of the most surprising principles that you've learned over the years, things that really take people aback?

First- and second-order consequences in life (36:43)

Well, that life works almost the opposite than the way you believe it works. That the things that you think are good are often bad for you. Can you give me an example? Oh, it happens all the time. Is this first order consequence versus second order? Yeah. Like it feels good. Almost always, or quite often, the first order consequences of things like, "I feel good. It makes me happy. I don't want to deal with the challenges. I want to avoid the pain." That whole litany of things that you would say, "Ah, that's going to bring you a happy life kind of thing." The second order consequences are more often the opposite than the first order consequences. I mean, just so I don't know. The foods you eat, the ones that taste good, are probably the ones that aren't the ones that you should be eating or something. So now when you start to realize that life is almost a trick, it's almost a trick. Are you going to go for the first order consequences or the second order consequences? Or I don't want to argue, or I don't want to, or the whole ego thing. I want to feel good because I want to feel good about myself because I don't want to discuss whether I have those weaknesses. On and on and on. Okay. Is radical truthfulness a good thing or a bad thing? I look at this. You know, like I say, "Look, all we're doing is being truthful and transparent." What's the problem with this? Like, okay, you're being truthful? But then people ask them, "What's the problem?" Or, "Do you want to know what your weaknesses are?" And you ask them, "What's the problem?" Okay. It's always that that's not healthy. So, so many aspects of life are more actually opposite convention. Like comfort, it's comfortable. Well, look, life teaches you over and over again. You want to get stronger? Okay, it's not comfortable. You want to get, okay? So, stronger does not go with necessarily comfortable. Pain, okay? Pain plus reflection equals progress. Pain is a teacher. You want to eliminate pain from your life? You're going to have a better life? No, no, no, because it's given you messages. Okay? So, so many different things are the opposite of what we're taught. And it goes down to even the education system. Okay? You failed. Hey, that's the beginning of a discovery process. That's a good thing. Okay? Okay. Now, how do I look at failure and learn from failure? No, you're stupid.

Radical self-discovery (39:41)

You failed. How do people find out like their nature? And do you think of us all as having a sort of true nature? And then from that, how do people decide on the paths of accomplishment or savoring? And what to define those for people? Yeah, there's a couple of concepts in there. So, I'll, and they're related and I'll, but I'll pause. First of all, on the nature, it's really a self discovery process. Discovering what you want, discovering what you're like, like you were describing your various cases where you're discovering what you like and that you go through that discovery. And, and the best way to do that is to want to do that, right? It takes an hour and it's a self discovery thing. Did you get it? You created it yourself? Yeah. And we've used others. We've used Myers Briggs team dimension workplace inventory and so other. And then we moved beyond that. The main thing like is if you want self discovery, then you, then you'll find your ways of getting the self discovery. They'll appear all around you. And yes, you have your nature. The thing that pulled, don't be around pagan square hole, find your nature, what's going to flourish and make your, you know, that's why I said when you were talking about your development, mine too, make your passion and your work the same thing. Know what your nature is. Yes. So, I believe in terms of that particular nature. Then we get to the particular of one of the big choices in life is save her life or accomplish. Like we have a lot of choices in our lives. And they're almost sort of mutually exclusive sometimes. Ah, you know, I just, I want to go to the ball game and I want to watch movie and I want to do that. And I just want to sit back and on a nice day and smell the roses. Okay, simultaneously, I want to change the world. Okay, I want to change the world and I've got this or the work life balance question and all of those. We face those types of choices, right? So, it's really important to go above oneself and to reflect on that. And also, by the way, to realize that the choices are not, you're approaching the choice wrong when you often see it as kind of that trade off because the truth is you can have a lot more life and you can have a lot more if you just know how to get more out of a minute. How much do I get per minute or how much do I get per hour? Do you have secrets on that?

Getting more out of every minute (42:36)

Because I will make them all. Well, there are a number of them in here and we can talk about them. But the capacity to, rather than we do all have to face our choices, but to also realize that you can expand how much life you're going to get out of life and how that range if you really do it well. So, there are those choices, which are those choices and we face them and then you have to decide how to do them well. Give me a couple things that I can do to get more out of a minute. First of all, if you do make your passion and you work the same thing, then it's great, right? Because you're a passion, whatever it might be, you're a painter or you're an entrepreneur or whatever that is, and you find that more enjoyable than going to a ball game, let's say, then that's becomes a passionate thing. That's one thing. Second, to know how to work with people who can do things really well to get the most leverage out of people. Third, how do you get yourself really one of the right work habits? Anyway, there's a whole bunch of those kinds of things where how do I just, what you say, how do I get it done without me doing it? Who's the best to do it and how do I get it? All of a sudden you open yourself up to all different possibilities of how you can do that, right? No time. I think Tim Ferris wrote what the four minute or the four hour work week or something. Okay, for our work week. Okay, there are approaches. All those ways of being able to do that. So I just gave you a few.

The elements of struggling well (44:30)

What are the elements of struggling well? What does it mean to struggle well and how do we do it? Well, first that's why that phrase, I use the phrase, struggle well or tough love. Okay, I put those words together because that exemplifies the fact that people don't think they go together. And so if you start to realize struggling well is what your, will get you what you want. Okay, rather than avoiding struggle, that's what I'm trying to convey. And so if you realize that, then you will go to the struggle. You won't be averse to the struggle. And you will think and then under that in the book, I wrote all these different ways of what it means to struggle well. Okay, how you have thoughtful disagreement, how you listen to maybe or you're not good at that or not, how you learn, how you navigate all the ways through that so that you get stronger. Because if you don't struggle, you won't get stronger. Okay, so struggling well go above it. You know, okay, struggling well, a big element is to go above your struggle just like you did. And you look back and say, okay, am I struggling well rather than be in it and doing those things. So there are a lot of different ways of how to struggle well. But if you know, okay, that struggling is a good thing. Okay, if you want to be strong, it's a good thing. I'll give you another example. I have a saying, if you worry, you don't have to worry. And if you don't worry, you have to worry. Okay, because what I mean is, if you're worrying about what can go wrong, you chances are you will create the protections against that thing going wrong. And therefore, that's good. And if you're not worrying about the things that are going to go wrong, then they'll probably the things you never expect are going to come and hit you. Okay, and so it sounds counterintuitive. If you worry, you don't have to worry, if you don't worry, you better worry. But what it means is that process of, okay, go to the thing, go to it and enjoy it. View these things as puzzles. Your personality will change. You'll enjoy it. Okay, because life is a puzzle. It's a going through the jungle. Okay, it's like that. I'll tell you a story. Yeah. So I crash and I figure, oh, risk and reward go together. You want to have a great life. Okay, and you want to be safe at the same time, they sound almost like mutually exclusive. Okay, so I, so I viewed it as, okay, I'm like sitting on one side of a jungle, and that if I can get to the other side of a jungle safely, I'll have a great life. But okay, but if I cross the jungle, all sorts of things are going to happen. Now, what am I going to choose? Am I going to be on this side of the jungle and have just an ordinary life? Or am I going to have what I think is the best life possible, but oh, I can get bit and all those things. And that's just the nature of life. And then I, and I said, I have to, it's my nature. I have to have the best life I can have. So I've got to go into the jungle. Now the question is, how do I go into that jungle and be successful at that? And I could tell you the answer. The answer is first, by worrying about what I don't see that I might be wrong with, and to do it with people who see the things that I might not see, and we are all doing it as a mission to get through that jungle well together. And when I went through that jungle and we do with that together, the thing I found out which is so wonderful is I don't want to leave the jungle. I don't want to get to the other side because I want to be with those people on that mission, and that whole experience is becomes great. So I found my way to be successful in the jungle to get to the other side. And I found out what really is a great reward. Yeah, that's extraordinary. And that resonates with me so hard about really enjoying the struggle. And A, that's what's making you stronger. B, there's just something innate, certainly with a certain personality type, that that is what you're going to love. Is that fight and reaching your limits and pushing beyond them? Now I'm curious, is there going to be a struggle for you in the third phase? Is there a new jungle that you're going into? So you to quickly define that for people. You said in phase one, you're dependent on others, you're essentially a child and you're learning. Phase two, you go to work, other people become dependent on you. And then at the end of phase two, you pass it off to other people, you want them to thrive without you, you give them the knowledge and the wherewithal. And then in phase three, you save your life. What's that going to look like for you? It's the freedom to do whatever you want to do without obligations. It is the realization that you shouldn't and it's not good to control anybody, it's just savoring life. That you have, you can do anything you want. You go to freedom. If there's a life arc, there's a life arc and in, I put together, this book is a 600 page book.

How to determine the most and least happy phases in life (50:17)

I also then was asked by a lot of people to make a simpler version about principles for success into a little book. And I'll be out, we're putting it out on the newsstands, you actually could be pre-ordered on Amazon. And in that book, I show a life arc and I tracked through what are the various phases of life and what, what is the happiest phase? What is the least happy phase and how does it work? And I could take you through all that if you're interested. I'm very interested. Okay, well, it depends how much time we've got. But okay. Maybe the slightly nutshell version. Okay, the nutshell version is you start off and it is very, very, it's a really enjoyable phase in life. You start to have, start to experience responsibilities like junior year, okay, do I get into the school? I want to get into it or whatever, that's quite common. College is great. It's exploratory. Come out of college. There's the most amount of freedom you have. So that transition, end school, come into now the new phase of life is totally different than the first phase of life because what it means is you don't follow any track. All through there you are following track and the direction of others. And now you could live anywhere you want, you can pick any job you want, you could do anything you want, you have total freedom. There's no guide, you can do anything you want, you have that freedom. And you move forward with that and then you start to make decisions and you start to take on obligations. You might get married, you might have kids, you have jobs and you take on that. And the least happy period in life by surveys of happiness is 45 to 55, okay? Because then you have the work-life balance and the obligations and too many things to do. And then maybe it's not as idealistic, idyllic as you want. You know, ah, you get into the marriage and whatever it is and then maybe it's not the marriage that you expect or the things that you're having and all of those things. That's a difficult phase of life, that middle part of that phase in life, 45 to 55 and so on. And then people transition. It's interesting and opposite then when I would have expected that the happiest phase in life is between 1680. And you know, the funny thing about it, which is really funny, they ask people, how good do you look? And they rate it the highest at that age. Now that's not true, right? But what happens is people at that point feel more comfortable with themselves in various ways. When you make that transition, you're eliminating all of those obligations. You're eliminating all of those things you're giving yourself free. I don't have to take care of it. I savor on my family's well without me or whatever as ah, I've got the free time. I could do whatever I want to do. That doesn't mean life isn't exciting. I find life very exciting. I'm very vital. I like those types of things. But totally free of choice. And you also savor the life arc, you know, even as people approach their death, they approach the death in a whole different way than what death seems to be for people in their early years, right? Oh, you're terrible, terrible thing. No, it's just part of that particular process. And how do you do that life arc? And ah, the curtain goes down, you know, and that is a different phase in life. So, you know, my responsibility now is to pass along what I'm doing. Like, right, I got plenty of money. So I'm not working for money. I'm giving away plenty of money because of, because it helps and whatever. And I'm just passing along. I'll have that life arc. And then I'm going to go quiet. And I'm going, and I savor life. And yeah, I could just, I love nature. So I go out side in nature. Okay, that has a big effect on me. I love it. So that's what the third phase of my life looks like. Yeah, man, that the whole notion that you're living an arc, that there are phases, I think is really important. And I don't think enough people recognize that your frame of reference will change as you move from phase to phase. And what was important to you in one phase will not be important to you in the next. And to, because I was thinking as you were talking, I was like, I personally don't believe that you can skip a phase. I don't think that certainly not with my personality and probably not with yours, it's not like you can skip the accomplishment phase and go straight to the savor phase. And I thought about that. You know, my wife and I have made enough money, we could buy an island and retire and just be done with it. And when I really thought about how that would make me feel, didn't seem like it would make me feel the way that I want to feel, because I still want to be in the jungle.

Balancing Emotion With Rationality And Impact Goals

Balancing emotions with logic (55:15)

But as I hear you describe the savoring, it's like, yeah, I get how my life could get to a point where that's what I would create. Yeah, you see, what I'm hearing you do well is you're looking down on yourself again, you're describing, I'm looking at how I feel, I'm looking at it. So you're connecting the feelings with the thinking. And so that's true. And in terms of, no, of course, there's a sequence to that life. What I did in the book, which would be fun for people to do, is I show all the different markers and all the different phases and little boxes next to them. And so what they can do is they can check where they are, they know exactly where they are. And then also by showing them what they can expect. Because if you're here on that arc, you can expect these things probably as you're going check, check, check, those are the things. Now you can start to imagine, where do I want to be in 10 years? And also, where are the people I love? Who I care about? Or what are their relationships? Where will they be? Where will my children be in 10 years? And what will they go through? Or what will my parents? Where will they be in 10 years? And how will that relate to how I want to have my life go? Because it, and it's the same thing that you'll see, the same things happen over and over again. All these lives are basically kind of the same things. And when you put that in perspective and you step back and you look at it, it's really great. Yeah, when you were saying that, I actually was getting a little emotional, the notion of it's another one of those. And I say that in a way designed to remove fear and uncertainty, which is something that paralyzes so many people. And I think one of the things you've really given certainly me and anybody who's really deeply come in contact with your work is that sense of, there is that higher perspective that shows that you're not the first person to have a child, you're not the first person to embarrass yourself publicly, you're not the first person to go through whatever heartbreak or heartache that you're going through. And when you can contextualize it, then you get to another thing that you've said, which of course, Buddhists have been saying for a long time, this too shall pass. Like whatever hardship you're in the middle of or whatever joy you're in the middle of, it's all part of a cycle. And so all of it will ease in the end. And so, yeah, your preferences will change. Realizing how it works is so great because like the thing you love at 10 is different than the thing you love at 20 or 30. We all can think, what is the thing you love at 20 or 30? That was fun. And then you go to 40 and you go to 50 and they change. And to realize how they will change and you move beyond, it's beautiful and it's helpful. That's incredible. Raya will be deeply saddened when you finish your time of getting all of this out into the world. But I am beyond grateful that you've taken the time to do it. Certainly, there was no obligation to do all this, but it's just beyond extraordinary, man.

Where to Find Ray (58:23)

Thank you for all of it. As somebody who uses your tools in this company, my gratitude knows no bounds. They really are the most profound business tools I've ever encountered in my life. I don't know how much you want us talking about exactly what we're using yet, but just know that we're insanely grateful. Where can people connect with you in the remaining time that we have with the public, Ray Dalio? I would recommend that if you're interested in what we're talking about, the best thing, if you have an iPhone, you can go on principles in action. There's a free app and it gives the book and it actually takes people into what the culture is like and all that and it's free. It's the book plus stuff. It also has an app there that helps you write down your own principles. The exercise that I was describing to you, in other words, you're in it. Now, what's one of those is it and what's my principle? It's provided there so that you can capture your principles and easily call them up anyway. That would, I think, find people helpful. Also on exchanging thoughts on social media, we have what we call the principles of the day. We talk about that particular principles of the day. We're doing that in places. I'll do that until I pass the tools along. The tools are coming in January. There'll be a number of those. I imagine they'll be pressed along, take something like a year and then I'll be done and we'll move past it. It's incredible, man. All right. Thank you, by the way. Thank you in the following way. It's such a joy to be passing these along. Really, it's a joy and a relief. To be able to do that and to see the impact that's happening on you and your company and all of that is, that's all I want, really. That is a joy. I reciprocate. I'm glad you are driving a lot of benefit and thank you for the joy in sharing with me that benefit that it's producing. Oh, yes. No problem. What is the impact that you want to have on the world?

What Impact Does Ray Want to Have on the World (01:00:37)

Well, right now, all I want to do is just pass along what's been good for me. For people who look at it, take it or leave it and that's it. I don't have a goal of making something different than it should be. It's like if you found a cure for cancer or you found something that was really valuable to you and you wouldn't want to have a die with you. So just like you're deriving the benefit, I just want to put it out there and let people decide for themselves whether it's valuable and that's all I want to do. And whatever happens is okay. So I don't have to change the world, whatever. It will naturally find its place. Evolution will decide its value. I love that. All right, guys. He would want me to tell you that he's just another one of those.


Outro (01:01:31)

That is definitely not how it feels. If you haven't read his books, read them, I assure you they are something completely unique and different. It's the way that he thinks and conceptualizes whether you want to be a better mom, whether you want to be a better entrepreneur. It's pretty irrelevant. The way that he gets you to think is the important part. So the actual specific principles are less powerful than the concept of another one of those and having principles and knowing how to categorize things and think through them. He is putting out some of the most life-altering material I have ever come across. You guys have seen enough of these episodes to know like I don't rave this highly about stuff very often. It is that transformational. It's had that kind of impact on me personally and the business. I can't encourage you to dive in enough if you haven't already. Be sure to subscribe and until next time my friends be legendary. Take care. If you go in and ask for a raise, you're not devaluing yourself. You're actually increasing your value because what type of person would go in and ask for a raise? A top performer. So the second thing is they believe that they have to kick down the door of their boss and say like give me.

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