Some advice from Mr. Ray Dalio of Bridgewater Associates

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, and you can’t avoid the encounters. You can only approach these encounters in the best way possible.

I want you to work for yourself, to come up with independent opinions, to stress-test them, to be wary about being overconfident, and to reflect on the consequences of your decisions and constantly improve.

Nothing is certain..i believe the best we can hope for is the highly probable

I learned that failure is by and large due to not accepting and successfully dealing with the realities of life, and that achieving success is simply a matter of accepting and successfully dealing with all my realities..

one of the most important things that differentiates people is their approach to handling them (mistakes). I learned that there is an incredible beauty to mistakes, because embedded in each mistake is a puzzle, and a gem that I could get if I solved it, i.e., a principle that I could use to reduce my mistakes in the future. I learned that each mistake was probably a reflection of something that I was (or others were) doing wrong, so if I could figure out what that was, I could learn how to be more effective. I learned that wrestling with my problems, mistakes, and weaknesses was the training that strengthened me. Also, I learned that it was the pain of this wrestling that made me and those around me appreciate our successes. 12

I met a number of great people and learned that none of them were born great—they all made lots of mistakes and had lots weaknesses—and that great people become great by looking at their mistakes and weaknesses and figuring out how to get around them. So I learned that the people who make the most of the process of encountering reality, especially the painful obstacles, learn the most and get what they want faster than people who do not. I learned that they are the great ones—the ones I wanted to have around me. 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.

Understanding reality gives us the power to get what we want out of life, or at least dramatically improve our odds of success.

Success is achieved by people who deeply understand reality and know how to use it to get what they want.

I am just saying that I believe hyperrealism is the best way to choose and achieve one’s dreams.

I believe there are an infinite number of laws of the universe and that all progress or dreams achieved come from operating in a way that’s consistent with them. These laws and the principles of how to operate in harmony with them have always existed. We were given these laws by nature. Man didn’t and can’t make them up. He can only hope to understand them and use them to get what he wants.

I believe that we all get rewarded and punished according to whether we operate in harmony or in conflict with nature’s laws,

my most fundamental principle: Truth —more precisely, an accurate understanding of reality— is the essential foundation for producing good outcomes.

This perspective gives me a non-traditional sense of good and bad: “good,” to me, means operating consistently with the natural laws, while “bad” means operating inconsistently with these laws

In other words, I believe that understanding what is good is obtained by looking at the way the world works and figuring out how to operate in harmony with it to help it (and yourself) evolve.

I believe that evolution, which is the natural movement toward better adaptation, is the greatest single force in the universe, and that it is good.18It affects the changes of everything from all species to the entire solar system. It is good because evolution is the process of adaptation that leads to improvement. So, based on how I observe both nature and humanity working, I believe that what is bad and most punished are those things that don’t work because they are at odds with the laws of the universe and they impede evolution.

I believe that pursuing self-interest in harmony with the laws of the universe and contributing to evolution is universally rewarded, and what I call “good.”

20 The marginal benefits of moving from a shortage to an abundance of anything decline. 21 When pursuing self-interest is in conflict with evolution, it is typically punished.

It is natural that it should be this way—i.e., that our lives are not satisfied by obtaining our goals rather than by striving for them—because of the law of diminishing returns.

Self-interest and society’s interests are generally symbiotic: more than anything else, it is pursuit of self-interest that motivates people to push themselves to do the difficult things that benefit them and that contribute to society. In return, society rewards those who give it what it wants. That is why how much money people have earned is a rough measure of how much they gave society what it wanted—NOT how much they desired to make money.

The faster that one appropriately adapts, the better. As Darwin described, adaptation—i.e., adjusting appropriately to changes in one’s circumstances—is a big part of the evolutionary process, and it is rewarded. 24 That is why some of the most successful people are typically those who see the changing landscape and identify how to best adapt to it.25

Darwin is reported to have said, “It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is the most adaptable to change.”

The most important quality that differentiates successful people from unsuccessful people is our capacity to learn and adapt to these things.

So what is success? I believe that it is nothing more than getting what you want

The following five decision trees show these choices. I believe that those who don’t move effectively to their goals do the things on the top branches, and those who do move to them most quickly do the things on the bottom branches.

It is a fundamental law of nature that to evolve one has to push one’s limits, which is painful, in order to gain strength—whether it’s in the form of lifting weights, facing problems head-on, or in any other way. Nature gave us pain as a messaging device to tell us that we are approaching, or that we have exceeded, our limits in some way. At the same time, nature made the process of getting stronger require us to push our limits. Gaining strength is the adaptation process of the body and the mind to encountering one’s limits, which is painful. In other words, both pain and strength typically result from encountering one’s barriers. When we encounter pain, we are at an important juncture in our decision-making process.
Most people react to pain badly. They have “fight or flight” reactions to it: they either strike out at whatever brought them the pain or they try to run away from it. As a result, they don’t learn to find ways around their barriers, so they encounter them over and over again and make little or no progress toward what they want.29
Those who react well to pain that stands in the way of getting to their goals—those who understand what is causing it and how to deal with it so that it can be disposed of as a barrier—gain strength and satisfaction. This is because most learning comes from making mistakes, reflecting on the causes of the mistakes, and learning what to do differently in the future. Believe it or not, you are lucky to feel the pain if you approach it correctly, because it will signal that you need to find solutions and to progress. Since the only way you are going to find solutions to painful problems is by thinking deeply about them—i.e., reflecting 30—if you can develop a knee-jerk reaction to pain that is to reflect rather than to fight or flee, it will lead to your rapid learning/evolving.31

There are literally two different parts of each person’s brain that influence these reactions: the pre-frontal cortex and the amygdala. They work as though they were two different brains that fight for control of decision-making. The pre-frontal cortex is the logical part of the brain that evaluates choices logically and the amygdala is the “animal instinct” part of the brain that triggers emotional reactions like the instinct to fight or flee. When faced with an obstacle or threat, an emotional reaction (e.g. pain) can be triggered that can lead to a fight or flight reaction that “hijacks” decision making away from the pre-frontal cortex, where the rational choices are being made. This can result in our making decisions that produce consequences that we do not want. This typically causes really big problems

Pain + Reflection = Progress
How big of an impediment is psychological pain to your progress?

Ask yourself, “Is it true?” …because knowing what is true is good. How much do you let what you wish to be true stand in the way of seeing what is really true?

People who overweigh the first-order consequences of their decisions and ignore the effects that the second- and subsequent-order consequences will have on their goals rarely reach their goals.36 This is because first-order consequences often have opposite desirabilities from second-order consequences, resulting in big mistakes in decision-making. For example, the first-order consequences of exercise (pain and time-sink) are commonly considered undesirable, while the second-order consequences (better health and more attractive appearance) are desirable. Similarly, food that tastes good is often bad for you and vice versa, etc. If your goal is to get physically fit and you don’t ignore the first-order consequences of exercise and good-tasting but unhealthy food and connect your decisions with their second- and third-order consequences, you will not reach your goal.

And it is subversive because it diverts one’s attention away from mustering up the personal strength and other qualities that are required to produce the best possible outcomes.

Successful people understand that bad things come at everyone and that it is their responsibility to make their lives what they want them to be by successfully dealing with whatever challenges they face. 38 Successful people know that nature is testing them, and that it is not sympathetic.39

How much do you let yourself off the hook rather than hold yourself accountable for your success?

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-excuses 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.

When you think that it’s too hard, remember that in the long run, doing the things that will make you successful is a lot easier than being unsuccessful. The first-order consequences of escaping life’s challenges may seem pleasurable in the moment, but the second- and third-order consequences of this approach are your life and, over time, will be painful.

Most problems are potential improvements screaming at you.

Identifying the real root causes of your problems is essential because you can eliminate your problems only by removing their root causes. In other words, you must understand, accept, and successfully deal with reality in order to move toward your goals.

More than anything else, what differentiates people who live up to their potential from those who don’t is a willingness to look at themselves and others objectively.