Principles (2017) by Ray Dalio is a hefty, intimidating book at first glance.  The first section, however, is a readable memoir where the billionaire hedge fund manager shares his life story in “Where I’m Coming From.”  It’s great to read about the successes and failures (I admit it, the failures were a little more enjoyable!) which have brought him to this point.  And the next two sections make a lot of sense.

The next section is “Life Principles.”  I enjoyed reading about them and a few really stood out.  “Look at the Machine from the Higher Level” contains great advice on encountering your own weaknesses.  When you do this, you have four choices according to Dalio:

  1. You can deny them (which is what most people do)
  2. You can accept them and work at them in order to try to convert them into strengths (which might or might not work depending on your ability to change)
  3. You can accept your weaknesses and find ways around them
  4. Or, you can change what you are going after (160)

Dalio’s advice (and his principles in general) are well thought-out and challenging.  Ultimately, Dalio’s advice is to be authentic, transparent, and willing to change.  A collection of great quotes which I pulled out of this section:

  • “If you’re not failing, you’re not pushing your limits, and if you’re not pushing your limits, you’re not maximizing your potential” (153)
  • “Whatever circumstances life brings you, you will be more likely to succeed and find happiness if you take responsibility for making your decisions well instead of complaining about things beyond your control” (156)
  • “A proper goal is something that you really need to achieve. Desires are things that you want that can prevent you from reaching your goals” (172)
  • “To be effective you must not let your need to be right be more important that your need to find out what’s true” (185)
  • “In my opinion these two barriers—ego and blind spots—are the fatal flaws that keep intelligent, hardworking people from living up to their potential” (187)
  • “When you’re approaching a decision, ask yourself: Can you point to clear facts (i.e., facts believable people wouldn’t dispute) leading to your view? If not, chances are you’re not being evidence-based” (200).

This section is founded on the belief that the better a leader knows him/herself, the better they can make decisions.  On page 272, Dalio lists the life principles.  Then he begins the next section with a list of the work principles which grow from the life principles.

This next section is founded on the belief that culture is created.  He suggests intentionally creating a work culture founded on data-based decisions where the best ideas win.  It should be a culture founded on authentic relationships where change can occur.  It’s a great outline and caused me to reflect on the culture of my work relationships.  Principles is a fruitful, thought-provoking book well worth the investment.

Other resources:

  1. This article in the Farnam Street blog was the reason I added Principles to my book queue.
  2. Dalio’s web page with resources and links to his TED talk.
  3. Forbes article about the book.
  4. New York Times book review.
  5. Another NYT article about Dalio.