Book Review: Principles by Raymond Dalio


This is one of the most profound books that you can read. It is about principles of life and work. It shows the core principles that drive life and work. I read it mostly because I was very much interested in Raymond Dalio due to his immense success in money management through his firm Bridgewater Associates which manages assets worth over $100 billion. Ray Dalio has been immensely rewarded for managing such huge amounts of money with a net worth of $18 billion. 

Principles by Ray Dalio
Principles by Ray Dalio

This book starts out by describing how Raymond Dalio started out in his business. He explains how he started out his business in a garage. He explains how the business almost failed and how he grew it slowly into the behemoth that it is today.  The second part shares out the life principles that Raymond Dalio embodies. The third section shares the work principles that defines how he works, how he relates with coworkers, customers and employees.  The good thing with this book by Raymond Dalio is that it is not just a highlight of principles. It is a book of reflection on his actions and how he formulated principles based on his actions and triangulating his knowledge with other people who were believable. He deeply explains why he applies those principles. He considers principles to be a way of examining how reality works. He presents two sets of principles which are principles of life and principles of work. The following were the life principles identified by Ray Dalio:

  1. Embrace reality and deal with it. To deal with life effectively you must be a hyper realist. This does not mean that you should not dream but it implies that you have to embrace realism instead of idealism. Truth or the in-depth understanding of reality is the foundation of any good outcome. You have to be radically open minded. You have to understand how reality works. Don’t allow fear of other people prevent you from doing things that you should do. Observe nature carefully in order to understand how reality works. One law of nature relates to evolution: Everything is slowly but certainly evolving into something better. Please identify how to align yourself with evolution. You must evolve or die. Evolution is the greatest life force which also presents the most rewards. Nature optimizes for the whole not the individual. Do things that benefit the whole not you as the individual to get most of nature’s rewards.  Embrace pain with full awareness that no pain no gain. Be aware of the second and third order consequences of your decisions and actions. Do not overweigh the first order consequences and ignore the second and third order consequences that nature optimizes for.  Go above yourself and objectively evaluate things.
  2. Use a 5 step process to get what you want. The five step which Ray Dalio considers to be the holy grail of succeeding in eandevours is made up of five processes which are: having clear goals, identifying barriers and challenges that stand in the way of attaining those goals, accurate diagnoses of problems to identify their root causes, designing a way around these obstacles then pushing the designs through in order to achieve the results.
  3. Be radically open minded. This is another important life principle expounded by Raymond. It helps one to go through life alert, observant and ready for opportunities that come in life. In order to be radically open minded there are two barriers which you have to identify and deal with which are: Your ego and your blind spots. Open mindedness also does not come naturally so you have to consciously practice being open minded. Learn how to engage in thoughtful disagreement. Also find believable people who can thoughtfully disagree with your view. Learn how to plan for worst case scenarios. To become open minded, take time to engage in quality reflections.
  4. Understand that people are wired differently. Understand your personality. Understand other people’s personalities. Take time to evaluate yourself and what motivates you. Understand that there are battles related to thinking and feeling and learn how to balance between them. Learn to use logic, reason, common sense to synthesize reality and work on it. Make calculations when making decisions. Evaluate probabilities of rewards if you are right and the weight of penalties if you are wrong.

The other set of principles discussed in the book are the work principles. These are principles related to organisations and work very well if you’re an entrepreneur. They tell you about how to go about work and make most of the work environment by building a meritocratic organisation using idea meritocracy. One of the work principles is to get the culture right by having set of values that should be held dearly by everyone in the organisation. The other work principle is to have believability weighted decision making.  The specifics of believability weighted decision making and its applicability in organizational decision making can only be better explained by reading the book.  You can find it here:

Published by Samuel Ng'ang'a Mwangi

One day I had too much to tell but there was no one to tell the story. I had to write articles, print them and then give them out to anyone who cared to read. Author of "So You Want To Get Into Courtship?" A Guide To Purposeful Christian Courtship. I write and rewrite on my blog www.mwelisa.com.

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