Book Summary 49 — Principles
…is a brilliant book written by Ray Dalio, the founder of Bridgewater, an American investment management company. He outlines the importance of having principles in everything you do in life to be happier, more successful and achieve your goals in life.
Part 1: Importance of Principles
What are principles?
Principles allow you to live your life according to your values - literally what you value in life.
Why are they important?
To make the most out of life and focus on what you value.
Without principles, you would be forced to react to circumstances that come at you without considering what you value most.
Where do they come from?
Sometimes we make our own, sometimes we adopt them from others — such as religion and legal principles. What’s important is that they don’t conflict, otherwise your actions and principles will conflict as well.
What do you value most deeply?
Part 2: My Most Fundamental Life Principles
Time is like a river that will take you forward into encounters with reality that will require you to make decisions. You can’t stop the movement down this river, you can’t avoid the encounters. You can only approach these encounters in the best way possible.
The Principles underlying the Principles
In short, I learned that being totally truthful, especially about mistakes and weaknesses, led to a rapid rate of improvement and movement toward what I wanted.
- Failure - is by large due to not accepting and dealing with reality
- Truth - there’s nothing to fear from it
- Desire to Evolve - ie to get better, is probably humanity’s most pervasive driving force
The quality of our lives depends on the quality of the decisions we make. We are not born with the ability to make good decisions; we learn it.
Key to Happiness
- Relativity — for most people happiness is relative to their expectations rather than absolute level of their conditions
- Meaning — people need meaningful work and relationships in order to be fulfilled
- Push your limits — to evolve you need to push your limits, which is painful
- Looking good — people who worry about looking good, hide what they don’t know and weaknesses, which impedes them to their path to happiness
- Second/Third-order consequences — focus on the second/third order consequences and why you want to achieve stuff ie going to the gym can be painful and time consuming (first order consequence), but better health and more attractive appearance is worth it (second order consequences)
In summary, I believe that you can probably get what you want out of life if you can suspend your ego and take a no-excuse approach to achieving your goals with open-mindedness, determination, and courage, especially if you rely on the help of people who are strong in areas that you are weak.
Treat your life like a game or martial art. Your mission is to figure out how to get around your challenges to get to your goals.
5 Steps to achieve your Goals
1 — Setting Goals
- You can have virtually anything you want
- BUT you can’t have everything you want → FOCUS & PRIORITISE
- Avoid setting goals on what you think you can achieve
2 — Identify and Not Tolerating Problems
- Most problems are potential improvements screaming at you
- Perceive problems and then deal with them — make a plan
- Most people worry too much about appearing like they don’t have problems
3 — Diagnosing the Problems
- Don’t jump to solutions, diagnose and design plan
- Look at it objectively, from outside
4 — Designing the Plan
- Write down the plan + Who does What & When
Most importantly, ask yourself what is your biggest weakness that stands in the way of what you want.
Part 3 — My Management Principles
The below is just a selection of the described 200+ principles in the book, which resonated the most with me.
1 — Trust in Truth
- You’ve got nothing to fear from it
- Be extremely open — it’s simple DO NOT FILTER
- Be radically transparent
- Do not tolerate dishonesty
- Never say anything about a person you wouldn’t say to them directly
8 — Create a Culture where it’s OK to make mistakes, but NOT OK to not learn from them
- Observe the patterns of mistakes to see if they are a product of a weakness
- Don’t worry about looking good, worry about achieving your goals
- Write down your weaknesses
- Get over blame/credit and get on with accurate/inaccurate — Remember that what has happened is in the past and no longer matters, except for learning
- Don’t depersonalise mistakes — identity mistakes and fix it
20 — Constantly get in Sync
- Know when to stop debating and move on to agreeing what should be done
- Don’t treat all opinions equally valuable
- Consider your own and other ‘believabilities’ of their advice
- Achieve completion in conversations
- Recognise that you always have the right to ask questions
37 — Recognise the most important decisions you make are Who you choose to be your Responsible Party
- you need great people doing what they’re great at
44 — Recognise that People are Build Very Differently
52 — Hire Right, because the Penalties of Hiring Wrong are Huge
- Values and abilities weigh more than skills
- Look for people with lots of great questions
71 — Clearly assign Responsibilities
100 — Evaluate People Accurately not Kindly
- There is nothing more valuable than accurate criticism
- Learn about your people and have them learn about you with frank conversations about mistakes and their root causes
- Provide constant feedback to put the learning in perspective
190 — Recognise the Power of Knowing how to Deal with Not Knowing
- While everyone has the right to have questions and theories, only believable people have the right to have opinions
210 — Don’t try to please everyone
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