Finance
by Ray Dalio
How do you keep getting better?
Ray Dalio built Bridgewater into one of the world's biggest hedge funds. He credits a set of rules he wrote down over decades, most of them learned from painful mistakes. The book shares his principles, and argues you should work out and write down your own.
Hear a sample · read by Laura
Dalio's formula for learning. A mistake hurts, and the hurt is a sign that something is worth studying. Stop and work out what caused it, and the pain turns into a lesson. Look away, and the same mistake comes back in a new form.
Dalio breaks getting what you want into five steps. Set clear goals. Find the problems in the way and refuse to tolerate them. Diagnose them down to their root causes. Design a plan to get round them. Then push it through. Few people, he says, are good at all five.
Dalio names the ego barrier, which makes it painful to hear you're wrong, and the blind spot barrier, which hides what your mind can't see. His answer is radical open-mindedness. Seek out thoughtful people who disagree with you and try hard to understand their reasoning.
At Bridgewater, Dalio wanted the best ideas to win, whoever had them. That meant saying what you really think, recording nearly every meeting so anyone could check, and giving more weight to people with proven records in the matter at hand. He admits many new staff found it hard.
1982
Dalio bet heavily on an economic collapse in 1982, was badly wrong and had to let his whole staff go.
Humility
Dalio learned to ask what he might be missing, instead of assuming he was right.
Pain
Painful mistakes lead to progress, but only if you stop and reflect on them.
Five steps
Set goals, find the problems in the way, work out their root causes, plan a fix and carry it out.
Radical truth
At Bridgewater, people say what they really think, and meetings are recorded so anyone can see them.
A story from the book
In 1982 Dalio was sure a debt crisis would cause a depression. He told Congress so, and bet on it. The market took off instead. He let every employee go and borrowed from his dad. Then he stopped asking 'Am I right?' and asked 'How do I know I'm right?'
One thing to try
Think of a mistake from the past month that still stings. Write down what happened, what caused it, and one rule that would stop it happening again. Dalio built his whole book this way, one painful lesson at a time.
Knotd has the key ideas from 250+ non-fiction books, each in a few minutes, in plain words. Principles: Life and Work comes with a Name That Idea round and a Your Move story to make it stick.
Get the whole book on KnotdOpen in the appHow do you keep getting better? Ray Dalio built Bridgewater into one of the world's biggest hedge funds. He credits a set of rules he wrote down over decades, most of them learned from painful mistakes. The book shares his principles, and argues you should work out and write down your own.
Pain + Reflection = Progress; The five-step process; Two barriers in your head; An idea meritocracy.
Think of a mistake from the past month that still stings. Write down what happened, what caused it, and one rule that would stop it happening again. Dalio built his whole book this way, one painful lesson at a time.
Yes. Knotd has the key ideas from Principles: Life and Work in a few minutes, in plain words, plus a Name That Idea round and a Your Move story to test them. It's one of 250+ non-fiction books in the app.
