PRINCIPLES RayDalio PDF

1 PRINCIPLES by Ray Dalio * Charts and Outlines from Hardcover Edition Page 1 PRINCIPLES by Ray Dalio * Charts and Outlines from Hardcover Edition Page 2 PRINCIPLES by Ray Dalio * Charts and Outlines from Hardcover Edition Page 3 PRINCIPLES by Ray Dalio * Charts and Outlines from Hardcover Edition Page 4 PRINCIPLES by Ray Dalio * Charts and Outlines from Hardcover Edition Page 5 PRINCIPLES by Ray Dalio * Charts and Outlines from Hardcover Edition Page 6 PRINCIPLES by Ray Dalio * Charts and Outlines from Hardcover Edition Page 7 PRINCIPLES by Ray Dalio * Charts and Outlines from Hardcover Edition

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5 31 PRINCIPLES by Ray Dalio * Charts and Outlines from Hardcover Edition Page 32 PRINCIPLES by Ray Dalio * Charts and Outlines from Hardcover Edition Page 33 PRINCIPLES by Ray Dalio * Charts and Outlines from Hardcover Edition Page 34 PRINCIPLES by Ray Dalio * Charts and Outlines from Hardcover Edition Page 35 PRINCIPLES by Ray Dalio * Charts and Outlines from Hardcover Edition Page 36 Think for yourself to decide 1) what you want,2) what is true, and 3) what you should do toachieve #1 in light of #2, and do that with humilityand open-mindedness so that you consider thebest thinking available to PRINCIPLES INTRODUCTION Look to the patterns of those things that affect youin order to understand the cause-effect relationshipsthat drive them and to learn PRINCIPLES for dealingwith them II.

6 LIFE PRINCIPLES 1 Embrace Reality and Deal with It Be a hyperrealist. + Reality + Determination = A Successful Truth or, more precisely, an accurate understanding of reality is the essential foundation for any good outcome. Be radically open-minded and radically transparent. a. Radical open-mindedness and radical transparency areinvaluable for rapid learning and effective t let fears of what others think of you stand in your way. c. Embracing radical truth and radical transparency will bring more meaningful work and more meaningful relationships. Look to nature to learn how reality works. a. Don t get hung up on your views of how things should bebecause you will miss out on learning how they really To be good something must operate consistently with thelaws of reality and contribute to evolution of the whole; thatis what is most Evolution is the single greatest force in the universe.

7 It is the only thing that is permanent and it drives Evolve or AND TABLE OF LIFE PRINCIPLESLIFE PRINCIPLES Evolving is life s greatest accomplishment and its greatest The individual s incentives must be aligned with the group s Reality is optimizing for the whole not for Adaptation through rapid trial and error is Realize that you are simultaneously everything and nothing and decide what you want to What you will be will depend on the perspective you Understand nature s practical lessons. a. Maximize your Remember no pain, no gain. c. It is a fundamental law of nature that in order to gainstrength one has to push one s limits, which is Pain + Reflection = Progress. a. Go to the pain rather than avoid Embrace tough love. Weigh second- and third-order consequences.

8 Own your outcomes. Look at the machine from the higher level. a. Think of yourself as a machine operating within a machineand know that you have the ability to alter your machines toproduce better By comparing your outcomes with your goals, you candetermine how to modify your Distinguish between you as the designer of your machineand you as a worker with your The biggest mistake most people make is to not seethemselves and others objectively, which leads them tobump into their own and others weaknesses again and Successful people are those who can go above themselves to see things objectively and manage those things to shape change. Asking others who are strong in areas where you are weak to help you is a great skill that you should develop no matter what, as it will help you develop guardrails that will prevent you from doing what you shouldn t be doing.

9 Because it is difficult to see oneself objectively, you need to rely on the input of others and the whole body of evidence. If you are open-minded enough and determined, you can get virtually anything you Use the 5-Step Process to Get What You Want Out of Life Have clear goals. a. Prioritize: While you can have virtually anything you want, you can t have everything you Don t confuse goals with Decide what you really want in life by reconciling yourgoals and your Don t mistake the trappings of success for success Never rule out a goal because you think it s unattainable. f. Remember that great expectations create great Almost nothing can stop you from succeeding if you havea) flexibility and b) Knowing how to deal well with your setbacks is as important as knowing how to move forward.

10 Identify and don t tolerate problems. a. View painful problems as potential improvements that arescreaming at Don t avoid confronting problems because they are rooted in harsh realities that are unpleasant to look Be specific in identifying your Don t mistake a cause of a problem with the real Distinguish big problems from small ones. f. Once you identify a problem, don t tolerate it. Diagnose problems to get at their root causes. a. Focus on the what is before deciding what to do about it. b. Distinguish proximate causes from root Recognize that knowing wh