Applying Ray Dalio’s $140billion Principles To Your Normal Life

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Ray Dalio, the founder of Bridgewater Associates, one of the world’s largest hedge funds, has shared a wealth of wisdom about life, work, and success. His principles, as outlined in his book “Principles: Life and Work,” provide a roadmap for personal and professional growth.  But like all frameworks, the hardest part is putting them into reality.


 What do people like me have in common with a billionaire?

 Not that much, but the lens and framework through which we see and interact with the world can be the same.

1. Embrace Reality and Deal with It

Dalio emphasises the importance of accepting and dealing with reality. He suggests that we should not get stuck in our wishes or beliefs about how things should be. Instead, we should focus on understanding and adapting to how things really are. This principle can be applied in our personal lives by accepting our circumstances and making the best out of them. In our professional lives, it means making decisions based on facts and data, not on our assumptions or preferences.

2. Use the 5-Step Process to Get What You Want Out of Life

Dalio proposes a five-step process to achieve our goals: 

1. Set clear goals.

2. Identify and don’t tolerate the problems that stand in the way of achieving these goals.

3. Accurately diagnose these problems.

4. Design plans to get around them.

5. Implement these plans – do what’s necessary.

This process can be applied in any area of life where we have a goal we want to achieve. It’s a systematic approach that ensures we’re not just dreaming about our goals but actively working towards them.

For me, the hardest part for most of my generation (I was porn in 1995, so whatever that makes me these days!), is actually getting started. I believe this to be the biggest separator between those that reach greatness and those who do not. But taking action starts with clear goals. If you don’t know what you are aiming for you cannot create a clear, systematic approach to accomplishing your goals. You can control inputs, not outputs. 

Not tolerating problems is something I would struggle with. I often take the path of least resistance, to my own detriment. This has hurt me at moments in my career, and in life. But it is a skill I am working to address, dealing with problems rather than just “going with the flow”.

3. Be Radically Open-Minded

Dalio believes that being open-minded is crucial for personal growth and success. He suggests that we should be eager to seek out the best thinking available to us, and be willing to consider and learn from the perspectives of others, even if they contradict our own beliefs. This principle can be applied by actively seeking feedback, listening to others’ opinions, and being willing to change our minds when presented with new information.

4. Understand That People Are Wired Differently

Dalio emphasises that everyone is unique, with different strengths, weaknesses, and perspectives. Understanding and appreciating these differences can help us work more effectively with others and make better decisions. This principle can be applied by seeking to understand the people around us, appreciating their unique contributions, and leveraging their strengths.

5. Learn How to Make Decisions Effectively

Dalio provides a framework for effective decision-making, which includes synthesising the information at hand, weighing the pros and cons, and making a decision with conviction. This principle can be applied by taking a structured approach to decision-making, rather than making decisions based on emotions or gut feelings.

Applying the Principles: An Example

Let’s consider an example of how these principles can be applied. Suppose you’re a software developer with a goal of becoming a team lead. 

First, you would set this as your clear goal. Next, you would identify the problems standing in your way – perhaps you lack certain leadership skills or experience. Then, you would diagnose these problems accurately – maybe you need to improve your communication skills or gain experience leading projects. 

After that, you would design a plan to get around these problems – perhaps by taking a communication course or volunteering to lead a small project at work. Finally, you would implement this plan by enrolling in the course and stepping up to lead the project.

Throughout this process, you would remain open-minded, seeking feedback and learning from others. You would also appreciate the different strengths and perspectives of your team members, and use a structured approach to make decisions.

Ray Dalio’s principles provide a powerful framework for personal and professional growth. By embracing reality, using a systematic process to achieve our goals, being open-minded, understanding that people are wired differently, and learning how to make decisions effectively, we can improve our lives and achieve our goals. 


Remember, as Dalio says, “Pain plus reflection equals progress.” So don’t be afraid of challenges or setbacks – they’re just opportunities for learning and growth.