Ray Dalio, PRINCIPLES FOR SUCCESS
Zibby Owens: I’m speaking today to Ray Dalio who’s the founder, co-CIO, and co-chairman of Bridgewater Associates. He is the number-one New York Times best-selling author of Principles: Life & Work and the new younger readers edition, Principles for Success, an entertaining, illustrated format for readers of all ages. He also wrote Principles for Navigating Big Debt Crises, which I think I might skip. By following his own principles, Ray built the fifth most important private company in the US, was judged to be one of the one hundred most influential people in the world, and became one of the fifty largest philanthropists in the US. A graduate of Long Island University with an MBA from Harvard Business School, he currently lives with his wife in Greenwich, Connecticut.
Welcome, Ray. Thanks so much for coming on “Moms Don’t Have Time to Read Books.”
Ray Dalio: Glad to be here.
Zibby: Can you please tell listeners what Principles: Life & Work and then the offshoot of that, Principles for Success, are about? What made you write these books? What’s so important about principles?
Ray: I didn’t actually start out to write a book. Whenever I was making a decision through a large part of my life, I would write down the criteria that I would use to make the decision. Then I showed it to others. It gave me good reflections on why I made decisions. I realized everything happens over and over again. When that thing that I was making a decision about would happen again, I would pick up what I wrote and then figure, how did that principle apply to the next time? I developed these principles for operating in that way. Ten years ago, I started to get a lot of attention. Then I put that online because people were interested. They were wondering what the way of operating was. It got download by three and a half million people. Then when I decided to step out of the CIO job and pass it on to others, I took that compendium. I made a book of it called Principles: Life & Work. That sold two and a half million copies. It’s a six-hundred-page book.
A lot of people told me, “Wow, it changed my life.” It had an important effect on them. A number of parents said, “Can you make it a simpler version that I could read to my kids? I’d like to pass them along. It’s different from the regular principles that they’re learning.” Then also, other people wanted to get it in a distilled version rather than the six-hundred-page version. I decided to make it real short and real easy to read. It’s 125 pages with probably 25 words on a page or something. I needed to distill it down for that reason. That’s why the kid’s book, it’s really a book of all ages. Adults like it as well as kids like it. Parents read it to their kids. It’s a simple book that basically conveys these simple principles that helped me and seem to be helping a lot of people.
Zibby: You said this funny line at the beginning of Principles. You said, “Before I begin telling you what I think, I want to establish that I’m a dumb shit who doesn’t know much relative to what I need to know,” which was such a funny way to start. You said you didn’t want to sound presumptuous by saying you know more than anyone else. Yet you’ve had this unique life and way of seeing the world. Of all the things, what do you think is the most important for people to take away that made you over and over dedicate yourself to writing this book and then the offshoot of the book?
Ray: That summarizes one of the most important principles. I think the greatest tragedy of mankind and the greatest tragedy of individuals is having opinions that are wrong that could be so easily stress tested, or to think that their opinions are righteous because they have them, or to think that they have in their heads most of what they need. Whereas if they instead realized that what’s out there in the way of different thinking is so much greater than anything that they have in their heads and that if they were to just step back and harvest all of that and take in and stress test their opinion, they can get so much more benefit. When I say that, I really mean that. I think almost all really successful people became really successful not because of what they know, although they learn a lot more by being radically open-minded, but mostly by knowing how to deal with their not knowing and taking it in and growing and triangulating. That would be the number-one thing.
It’s so different from school. School’s the opposite. If you understand that learning comes from making mistakes and that everybody has strengths and weaknesses and that if you know how to make the most out of mistakes, to learn from mistakes and not feel bad or diminished because you’re making mistakes, and realize that everybody has weakness, and success is achieved by knowing how to work with others who are strong where you’re weak and to accept your weaknesses, you can be tremendously successful. School and a lot of the environment diminishes the appreciation for mistakes. People become so perfectionistic. They think, “I’m smart,” because they got a high grade on the test. A lot of life is when you fail. Learning begins, really, with the failure, not because you get it right.
Zibby: It’s so interesting. I love how you call it the blind spot barrier where you have others who help you and see what you can’t see. Sometimes you don’t even realize that, right?
Ray: Right, we all see differently. Some people see the big picture. Some people see details. It’s so interesting. It’s like the fable of the seven blind men and the elephant. They’re all touching different pieces. When you can triangulate and see things through other people’s eyes and you could do that with humility, you can see many dimensions that you individually could not see. It’s so stupid to hold onto your one opinion and not do that triangulation and not do that stress test. Then appreciate mistakes for learning.
Zibby: I’m throwing out all my opinions after this call.
Ray: I describe the capacity to be open-minded and assertive at the same time, in other words, to have humility and to be curious. Don’t accept things that don’t make sense to you. Keep asking the questions and learning, but do it with great open-mindedness and great humility. Learn the most. Appreciate failures. I would describe it as my reaction to making mistakes changed. In writing down these principles, I realized that every time that I made a mistake, it was like a puzzle. If I could solve the puzzle, I would get a gem. The puzzle was, what would I do differently in the future to make a better decision? The gem I would get would be this principle of how I could be better. I’d write it down. The mistakes themselves, I didn’t feel bad about. In other words, I realized that they would bring me things that were learning. They would bring me things that helped my process. So many people feel bad about mistakes and feel bad about themselves rather than have that instinctual reaction, like, “Oh, this is just learning.”
Zibby: Excellent advice. You also said another way to look at things that we’re pursuing is, “The things we strive for are just the bait. The struggle to get them with people that we care about gives us the personal evolution and the meaningful relationships that are the real rewards,” which I loved. It’s such a different way of thinking about goals. There’s so much in the culture about achieving things and goals. This is “the journey is more important than the destination” type of philosophy.
Ray: Yes, I learned that. I learned exactly what you’re saying. I’d go after something. I’d achieve a goal or I wouldn’t achieve a goal, but I would be on the mission with somebody. Then you get to the goal. It was enjoyable, but it was enjoyable for a little bit of time. I never settled on that. Then I’d keep going. It’s a little bit like maybe trying to climb Everest or trying to climb a mountain. What you realize is now you’re on a mission. The struggling with other people is the real reward. When you achieve that goal, whatever that might be — you want to get a nice house, you want to get a car, or whatever it is — and you achieve that goal, you’re not going to be satisfied. It’s in that mission of climbing the mountain or working
Zibby: This is sort of how I felt about business school. I know we both went to Harvard Business School. I feel like the whole point was being stressed out and bonding with all the people you went through the program with, not necessarily the MBA degree at the end of it.
Ray: Right, and that’s what life is. You’re excited now because you’ve got your mission. I’m excited for you and your mission. You’ve got your mission to convey these things in a very palatable way, the different perspectives to moms. That’s a great mission. Then when you get to do it with other people, that in and of itself is satisfying. Just imagine how you’ll feel if you were done with it. Then you need something else. It’s that journey. That’s what life’s journey is, to evolve personally and to contribute to evolution.
Zibby: Do you think people actually can understand this in the moment? Do you think you have to come to this realization? Do you think your telling people — because it’s so true — do you think it’s enough for people to realize? Do they have to go through something? When you go through loss, you realize all these things. Even if people tell you, you might not realize it. You have to live it. Do you feel like that with this? Have you found that trying to teach people from your experience is enough?
Ray: I think it requires both. It requires the help to reflect on what’s happening. In other words, it’s a real contribution when somebody goes through an experience to simultaneously have a good reflection on their experience that they’re going through. It requires both a perspective and the experience. I could communicate these things and we could intellectually say, “Right, I get it. That makes sense.” Then you’re in the moment. If in the moment you can reflect well, then is the best learning. I have an expression principle: pain plus reflection equals progress. If you just have the pain through that moment and then you go on and you don’t have quality reflections on that pain or that mistake, then you’re not going to make the progress. You need both the experience and the reflection.
Zibby: I know that you’ve been successful in your financial area of the world and many other ways. I have been very focused recently on the book world. The way that you’ve approached this book is so genius. You didn’t just deliver the book, but you do have, as you mentioned, this book for all ages, but also the series that you did with the eight episodes in under thirty minutes, the miniseries adventure, and then this amazing app that you created, which basically gives the book away and allows readers to customize their own principles. It’s really genius. It makes you engage with the content that much more. Tell me how you thought about this way of delivering a book.
Ray: A book is only a vehicle to deliver information, just like you have what you’re doing. You’re drawing on all the books, but you’re drawing the information out of the books with the authors to convey the information. I wanted to convey that information. I’m at a stage in my life — I’m seventy years old. I want to pass along the things that have been valuable to me. It was important to realize that people see things differently. There needs to be a quick and easy way of conveying the most important things. Then there needs to be a more complete, extensive way of conveying the most important things. I was just thinking about, what are the best ways to convey it to different people?
The economics of the book are not relevant. I give it away, like you say. Principles in Action is an app that is free on the Apple App Store. It includes the book, but it also includes instances, videos of real-life situations that people can look at and see it. There’s that animation, Principles for Success, the animation
Zibby: If I’m sitting down and saying, “Tonight, I want to write all my own principles,” and I went through the exercise in the app, which was fantastic and helped me, but if someone’s listening and says, “This is a great idea. I need to spend time figuring out my own guiding principles in life,” how would you recommend they approach that?
Ray: I would say that when they’re in the situation, that either they can go look at other people’s principles. They could think about their principles. They can actually make a decision and say, “I made that decision,” and write down their principles at that time. Let’s say you’re dealing with moms raising kids. First, realize that whatever you’re encountering has been encountered many times before by other people. It’s not your first. Think, is there a principle for the best way of doing that? I’m a grandparent now. I watch my kids have their kids. They want to come in there and they want to sleep with them at night. How do you deal with that? That’s not the first time that’s happened. There are probably good principles. They might say, “Let me go try to find whatever those good principles are.” They might discover it themselves. They encounter it. Then they write it down. They say, “What is the way of dealing with children who want to come into the room in the middle of the night or at a certain hour and sleep with you? What is the best way for dealing with that?” Now they know there’s a principle. Whether you write it down ahead of time or not, it is almost incidental. You write it down or you can get it from others. Then you accumulate it.
Over a period of time, you will have your collection of principles. You can’t make it abstract. Don’t just sit down and say, “I want to now write my principles down.” It’s not realistic. It’s not the real encounter. That’ll give you the vividness of reflecting on what you’re doing. When you start to do it that way, then you start to think in a principled way. It’s a whole different way of thinking. Most people are in a blizzard of things that are coming at them. They’re just dealing with those things. They don’t realize that every one of those things is just another one of those. That happens over and over again. If you start to think in a principled way where you’re saying, “What one of those is it? How should I deal with those?” you start to deal in a higher-level way than this blizzard of stuff that comes at you. That’s what I would recommend, experiences and the reflections and writing it down or looking it up that way.
Zibby: I’ve tried everything else to get my kids to not come into my room at night. Maybe writing a principle about it will finally help. Maybe that’s the secret ingredient I’ve been missing.
Ray: I’ll bet you dollars to donuts that there’s a good principle out there that could probably help you. You don’t have to do it alone either. You know what I mean?
Zibby: Yeah. I feel like I’ve tried eight million principles, but I won’t give up.
Ray: I know it isn’t easy. Parenting, that’s the toughest job.
Zibby: As a grandfather giving everybody all these principles, if your grandchildren were listening and you wanted to tell them one or two things not to ever forget, what would those things be?
Ray: By the way, my oldest grandson is six years old. I read the book with him. We have the most fabulous conversations. We go through all of those. The main things have to do with life is a journey. You will have these encounters. Reality works in a certain way. If you have determination and you have your dreams and you encounter the realities well so that you learn, how does reality work?, and you learn your strengths and weaknesses and you learn others through mistakes and through learning, and you do that well with others, you will get to where you want to go. My message for success is that you determine what success is. It’ll change with time. There’s no notion of success means making a lot of money. There’s no particular thing. You have to feel that pull. You will experience the failures and successes. There’s so much value in that self-discovery process and the discovery of that. It’s an adventure. Don’t feel bad about the mistakes. Go on the adventure. It’s that kind of stuff that I would want to convey, except we get much more into the nitty-gritty of what that’s like in the book.
Zibby: From a writing perspective, I know you self-published and then went to Simon & Schuster afterwards. Now you have this huge Principles empire that you’ve created. What advice would you have to aspiring authors who want to attempt something similar or something on a much smaller scale?
Ray: To be clear, Simon & Schuster did my first book. They asked me to do it. That’s the one that sold two and a quarter million copies. The second one, what I wanted to do was I wanted to largely be able to give it away free. I made the point of making a deal that the second book, which is the debt principles, I self-published. I wanted to give it away free. That wasn’t going to work for them. Then this book is Simon & Schuster again. I was fortunate in the fact that I knew, and Simon & Schuster knew, that there would be a pretty big demand for the book. We didn’t know that it would be so giant, but we knew that there would be a book. If you’re in a position where you have a publisher and you don’t know what you’re doing, pick yourself the right publisher, someone who understands you, wants to help you get to where you want to get, and will work with you in that way. Then there’s the mechanics of the publishing. There’s a benefit sometimes for self-publishing. It may be because you can’t find somebody who wants to publish your book, in which case, that probably tells you something about the demand. Maybe you give it a shot. It may be that you want to just have total control over it. Then you would self-published. For most people, I wouldn’t self-publish. Really, it’s great to find the right publisher who can work with you to accomplish what you want to accomplish.
Zibby: Then one last question about you as a parent. When you look back on all the time you spent building your business and also parenting four sons, what do you think you did really well? What would you advise people try to emulate about your parenting experience? What do you maybe wish that you could’ve done better?
Ray: Two things. To know that the quality of the time with the person, with the child, is the most important thing. It doesn’t necessarily have to be the quantity of time. Most parents encounter a work-life balance. How do you achieve that? The way to achieve that is to know how to get the most out of an hour. In other words, most people who feel that there’s a conflict between two things probably don’t realize that there are better approaches to get the most out of an hour. What that means is the quality of the time is very important.
The second thing I would say was letting them make decisions and their own opinions at a very, very early age, in other words, “Why do you think that?” to do the back and forth, to recognize that parents’ own desired path for the kids may not be the best path. They have to discover things through their own experiences and then try to maximize it. I have four sons who are very, very, very different people. Each has chosen different paths in life. I like that. The challenge that I have is, along those lines, maybe being too big of a person in their lives, too much of a shadow. Maybe I create too much of a shadow. That would be, probably, my biggest challenge. I have to make sure that I shut up a lot more and make sure that I’m more the quietest, if we’re in a family event and so on. I really want to make sure that I do the best job possible of not talking, of receding and letting them flourish. The more they can flourish on their own, think on their own, experience life on their own, and then that I can not offer any thoughts, but just respond to them, the better that is.
Zibby: That’s wonderful. I’m sure the shadow that you cast is a very pleasant shadow to be under. You have so much great advice and insights. Thank you so much for sharing them with me and for listeners on “Moms Don’t Have Time to Read Books.” Thank you for the multimedia format so that your content is so easily and readily digestible. Thank you so much.
Ray: Thank you for helping me pass along these things that I’m excited about passing along. I hope they’re helpful to you and your listeners.
Zibby: My pleasure. Certainly helpful to me, so thank you.
Ray: Bye-bye.
Zibby: Buh-bye.