Book Report - Principles: Life and Work by Ray Dalio

Before I read Principles: Life and Work, I knew next to nothing about Ray Dalio or Bridgewater Capital. A few key recommendations in the past couple of years finally nudged the book to the top of my stack.

The timing to wrestle with the contents of his book couldn’t have been more relevant to me especially over the last four months. I finished reading it the first time a few days before the US woke up to the pandemic in March. Key points from it have been top of mind in helping me process everything that has been happening in the world and my personal life since then.

I spend a lot of time doing my best to be intentional. Ray’s approach, mindset, and the principles he shares are a great example of how a person can take that to the Nth degree in all facets of life.

Part 1: Life Story

Dalio explicitly writes that he doesn’t mind if readers skip this part, but it sets up the heart of the book well. For me, books meant to teach something don’t sink in as well without enough of the experience needed to drive the lesson home.

The story of 12 year old Ray reading free annual reports from Fortune magazine jumped out. It reminded me of being around the same age and reading the MS-DOS 5.0 manual cover to cover.

The arc of this section weaves his life story through all the major financial events of the last 50 years as of the book's publishing in 2017. Ray explains in context how his and Bridgewater’s approach developed and adapted over time. The narrative is as good as most autobiographies I've read. It sparked my interest in how “the economic machine” as he refers to it works.¹

Dalio had a very public, humbling failure in the early 80s. But, he adjusted, rebuilt, and improved. Bridgewater navigated the 2008 financial crisis well for themselves and clients. He became a billionaire many times over. His team even ended up informing financial policy in the US and EU in recent years.

He also details his struggles to leave Bridgewater in a place that is not dependent on him after he leaves the company for good. This was especially interesting to me as someone who thinks a lot about organizations and how to build and run them well for the long term.

Two lines that stuck with me at the conclusion of this section were:

"In time, I realized that the satisfaction of success doesn’t come from achieving your goals, but from struggling well."

And the big one:

"What I have seen is that the happiest people discover their own nature and match their life to it."

Part 2: Life Principles

This section distills Dalio’s life principles that he has refined over time via experience, reflection and intentional thinking. It pairs the theory well with the prior section on the experience that led to the material. I enjoyed considering alongside my own experience and how I plan to apply a similar framework to see where it might match up.

Someone trying to get the gist by reading the bullet points in this section may not think they’re too special. But, to me they match one of my own adapted mantras: simple, not easy.

One thing that resonated with me is the idea of organizing around “meaningful work and meaningful relationships”. It's a very effective way of clarifying what matters most in day to day life. It's helpful when reflecting on what you’re investing time in and whether it is leading towards those two things.

As of this posting, I'm finding the concepts of radical open-mindedness and embracing reality and dealing with it to be essential as I'm doing the work to make sense of what's happening all around us, how to think about it, and what to do about it.

Part 3: Work Principles

This part of the book is likely more interesting to those of us who lead organizations of people or aspire to do so. The principles in this section are very different from how most organizations operate in my experience.

It’s meant more as a reference, but it does read well cover to cover. There’s lots of thought provoking and new or improved (to me at least) concepts in here.

To me, the idea of a meritocracy is for the most part a fantasy people use to explain their privileged position in life. Dalio’s concept of an idea meritocracy meant to bring the best ideas to the top regardless of where they come from is something that is compelling. The framework he lays out for how they try to foster an idea meritocracy is worth diving into.

He also details how they use the concept of “believability”. This is a measure of much weight you should put behind an individual’s opinions based on their demonstrated track record in the subject at hand, while leaving room to consider ideas from others with less experience too. That seems obvious, but how they gauge and use it is what's interesting. This is something that I can see trying to cultivate myself in the future.

This only scratches the surface of what’s in this section. But, I recommend digging in if you are growing or influencing organizations of people or plan to in the future.

Conclusion / TL;DR

If you are wired anything like me and interested in living an intentional life, there’s lots to consider and learn from here.

All three parts of the book stand on their own and do what they set out to do.

The autobiography is entertaining and thought provoking.

The guide to a life philosophy and how to apply it is among the best I've encountered.

The roadmap to running organizations in an examined and principled way is radical, different, and worth trying to carry out.

I found the whole book extremely valuable. Highly recommended.

(This post includes affiliate links.)

It has been fascinating and at times nerve wracking to read his writing about what is happening now during Covid-19 times after processing this book.
↩

Join My Mailing List

New Posts in your inbox.
Interesting things I want to share.
Not too frequent.