Book Review: Principles by Ray Dalio

Posted on Fri 11 October 2019 in Book Reviews • 4 min read

I've just finished reading Ray Dalio's book Principles, and wanted to use this space to jot down some of my personal takeaways and thoughts. To give some background, Ray Dalio, founder of Bridgewater Assosciates, one of the largest hedge funds in the world, wrote this book around the unique principles that he discovered through his over forty year career that led to his and Bridgewater's success. Dalio believes that it is these principles, that are the reason behind whatever success he has had.

Before I get into the thick of it, I would recommend this book to anyone that is feeling they are lacking some direction in their life. One of the organizational techniques I've picked up lately is Bullet Journaling, and one of the takeaways I got from the book was to start prioritizing my to-dos, in comparison to what I do now which is just dump it all onto the paper.

The book is broken into two major sections: Life Principles and Work Principles, followed by descriptions of the tools developed to work alongside the principles to help keep the concept of an idea meritocracy intact. The concept of an idea meritocracy, is where you can have a community/company in which the best idea wins, no matter who/where it came from. This is in comparison to regular company structures where the decisions come from top down, which has its pros/cons as well.

Life Principles

On page 246, there is a summary of the life principles which are fully detailed in the preceding chapter. While I won't go into detail on Ray's perspective of the points, however I'll give a brief description on my personal takeaway. Please note the points are listed in no particular order.

  • 1.1 - Be a hyperrealist - you need to understand, accept and work with reality to be able to appreciate and move forward with things effectively
  • 1.3 - Radical transparency - while this can be a tough habit to develop, it pays itself off time and time again for both yourself and the people around you
  • 1.4 - Look to nature to learn how reality works - if you haven't noticed in my blog posts, I am extremely curious about the natural way of evolution and look to bring it's methods into my everyday life and projects. I believe that Dalio also appreciates the power of evolution and is integrating it into his work (as he later describes)
  • 2 - 5 Step process to get what you want out of life
    • Have clear goals
    • Identify and don't tolerate the problems that stand in the way of our achieving those goals
    • Accurately diagnose the problems to get at their root causes
    • Design plans that will get you around them
    • Do what's necessary to push these designs through to results
  • 3 - Radical open mind - something that I have blogged about in the past, open mindedness, you can find that post here:
  • 4.5 - Getting the right people in the right roles in support of your goal is the key to succeeding at whatever you choose to accomplish
  • 5.10 - Believability weight your decision making - I believe when gathering opinions and thoughts on something, you must weight the opinions based upon how 'believable' the source is

Work Principles

Dalio believes that culture is the most important part of any organization. I also share the same perspective that any company consists of two major components: culture and people. If the culture isn't right, the right people won't stay.

  • 1.1 - Realize you have nothing to fear from knowing the truth - while sometimes harsh, having more information can always be beneficial if looked at from the right perspective
  • 3.1 - Recognize that mistakes are a natural part of the evolutionary process - keeping with the theme of evolution is one of the greatest things in nature, it must be accepted that mistakes are apart of it all and are inevitable
  • 3.2 - Don't worry about looking good, worry about achieving your goals - this is one that I try to embrace more and more each time I do something, admittedly at times I will withhold from sharing with others from how much progress has been made, by not sharing, everyone is losing out from sharing the learning experience as well
  • 3.4 - Remember to reflect when you experience pain - it is always a good idea to look back on an experience that didn't go to plan or badly to make sure you adapt and evolve for next time
  • 5.2 - Find the most believable people possible to disagree with you and try to understand their reasoning - a great way at validating your reasoning behind something is to ask someone else to poke holes through it to see if it still stands

I believe that the way that you perceive the points in this book is dependent on the stage of life that you are at personally. However, even reading through them now, while I can't resonate with them at this point in time, I am glad that they have planted the seed for later on, which may be of great assistance. That is why I believe you should read this book.