Principles by Ray Dalio | Lessons & Book Review

Title: Principles

Author: Ray Dalio

Category: Non-fiction

Rating: 5/5

10-word summary: Good principles help you get what you want in life.

Radical honesty and principles based on reality are incredibly valuable.

About Principles

Principles by Ray Dalio is one of my favourite books of all time. I think that almost every page of it is filled with great insights and meaningful ideas. While some of the ideas in this book are different from what most people believe, they are challenging, eye-opening and very valuable.

Principles is a different kind of book so I’d like to tell you more about it. The author, Ray Dalio, is a very successful investor. He founded Bridgewater – one of the largest hedge funds in the world. Even though he is not one of the most well-known businessmen in the world, he is definitely skilled and successful.

Besides that, Dalio is also incredibly intelligent and educated. His book Principles is part of the knowledge he wants to leave behind as his legacy. The book is divided into 3 parts:

Part I is called “Where I’m coming from” and is the section where Dalio shares more about his life and his work. He thinks that learning more about his background can be useful to understand his work.

This part is the easiest one to read. Since I knew little about him as a person, it was great to hear him talk about some of his challenges and the different stages of his life.

Part II is called “Life Principles”. As the title suggests, this part includes life principles that are rules you can live by.

Life Principles is the part that will be most useful for everyone. Here he lists many valuable principles that anyone can apply – with some time and effort, of course.

Part III is “Work Principles” and it includes principles that you can apply when working with people – especially if you are running an organization and want to optimize for success.

Work Principles will be useful for managers and people who run their own companies. It focuses on the best ways to organize a company and work with teams to achieve a common professional goal. But I believe this part can be useful for anyone because most of the work principles can also be applied in personal relationships.

I absolutely loved reading Principles and I felt incredibly happy and challenged while reading it. But I have to say that I don’t think anyone will enjoy this book as much as I did.

I think one of the reasons why I loved is so much is because I already know and live by some of the most important principles in the book. They all made sense to me because I think about life in a similar way.

But if you have never been exposed to this type of reasoning, you may found some ideas strange because they are not commonly applied in our societies.

I think that the main message of the book Principles is that we can (and we should) try to think in a more correct and objective way. We need to understand reality as much as possible as it really is and work with that. If this is something that makes sense to you or something you want to explore, there’s a high chance you will enjoy this book a lot. Otherwise, you might love it or not. It depends on your background and mindset and the only way to know for sure is to read it.

If you want to, you can get a free sample of the book from Amazon to see what it’s like before buying it.

I think the book is definitely worth reading. The principles in this book can be life-changing so it’s best to give it a chance.

What I like about Principles

1. Principles focuses on higher-level, critical (accurate) thinking

The main reason why I love Principles is that it encourages you to think accurately, to make an effort to understand reality as it is. He also talks about the importance of understanding yourself and other people as you really are – with strengths and weaknesses, and different intentions, values and tendencies.

I think we don’t usually try to think more objectively or to openly discuss how we perceive ourselves, others and the world around us. But I think this is incredibly valuable. Principles will help you better understand what this means and how you can do that too. And this is why I love this book so much – it talks about a way of thinking and functioning in the world that I think is superior, but uncommon and harder to adopt. Dalio’s collection of principles is a great way to start.

2. It has a clear structure and a logical flow of ideas

Principles focuses on ideas that are rather vague, higher-level and complex. Because of this, the book must have a very clear structure and a logical order to make sense to us. I think Dalio managed to do this excellently.

The main principles of the book seem to follow a natural and logical succession. Every big principle often has several, subordinate principles that help clarify and illustrate the main idea.

The book also includes an index or a summary of all principles. This is very useful because it allows you to easily find a principle and locate it in the book if you want to read the more in-depth explanation.

Honestly, I was very impressed with the clarity and structure of the ideas in the book. This alone shows a deep understanding of this topic and an ability to synthesize and organize complex information in a way that makes sense to everyone.

3. It is very easy to find information in it

I believe that Principles is meant to be used as a manual for life. This means that you should easily find the information you need when you need it. Luckily, the book was designed to be that way. Both the structure of the book and the summary of principles help you find what you need with ease.

4. The design of the book is very beautiful

I normally do not care what a book looks like – the ideas matter more. But when a book has both great ideas and a great design, this definitely increases the pleasure of flipping through the pages. The book has a great, clear design that helps you understand the text better. The different sizes in text, the pages with quotes and illustrations all help you better understand the message of the book.

I also like the simple, black cover which resembles a bible – therefore a book with rules that are meant to be read often to give guidance. I’m not religious, but I think that this type of association makes sense in this context and it can be useful for the book. Actually, I think we would live in a better world if we would apply Dalio’s Principles more than the teachings of the bible.

5. The book is focused on the actual principles and it has no unnecessary stories, no fillers and no fluff

This is exactly what I expected from such a book and such an author, but it is still worth mentioning. Dalio focused on principles, ideas and concepts. He occasionally shares short stories to illustrate how the principles work or how his own experience helped him learn something new. But these stories are few and short.

While reading non-fiction books, I often find that the books are much longer than they need to be. Authors often seem to fill their books with story after story that add little information. It seems to me that almost every book has about 250 pages not because it has 250 pages of information, but because at least half of it includes unnecessary stories.

Principles has over 500 pages (more than 400 about the principles) and I never felt any part was unnecessary or a waste of space. So naturally this made me like the book even more because I am more interested in the information in a book, not in countless stories that illustrate the same message.

6. Applying the principles in this book can have a big impact on your life

I honestly believe that applying just some of the principles included in the book is enough to make a drastic difference in how you think and live your life. I believe they have the potential to help you better understand yourself and other people. They can also help you better understand the world we live in, make better decisions, be more consistent in your thoughts and actions and achieve success quicker.

However, I do not think that living by these principles is easy because some of them are uncommon and they take time to understand and implement. You will need to put in some effort and face some discomfort to apply some of the principles, but I do believe the rewards are worth it.

I actually began to implement some of the principles in this book even before reading it because I discovered them on my own. And I want to tell you that even a few drastic changes can make a world of difference. Of course, I am still learning to implement these principles, so I do not apply them all the time or not as much as I could, but it’s something I am working on.

7. Ray Dalio’s clarity of thought is impressive

I think Dalio is brilliant and highly educated. While reading this book it was obvious to me that he is a great intellectual who has an impressive ability to make sense of our complicated world. I think that he has a remarkable ability to see things clearly, to find out what is true, to be objective, to synthesize and organize ideas.

Of course, he is still human and I believe he probably isn’t always rational or correct (or maybe he is). But even so, I believe that his ability to reason in this way is remarkable and rare and I admire him for it!

Of all the great non-fiction books that I have read, Principles is one of the best in terms of clarity of thought, flow of ideas, clarity of language and information. I think it would be hard for a person to read this book and misunderstand it or not understand what Dalio meant.

8. Despite his results, education and ability to reason, Dalio also remembers to be humble

Dalio starts his book by telling us that he is a “dumb shit” who “doesn’t know much relative to what [he] needs to know”. And then he proceeds to tell us about his life and to write an incredible book with brilliant principles!

Given his professional success and his remarkable reasoning ability, it was both surprising and great to see him begin his book with this type of humility. He also adds that his principles are guidelines you can use if you want to and that you can find your own principles.

9. The principles in this book are useful for anyone

I honestly believe that the principles in this book can be useful for you regardless of who you are, where you live and what your goals are. They are overarching principles that can be applied to different situations in different ways. Of course, they will only serve you if you see the value in them and try to practice them. And if you do, I believe they can have a great impact on your life.

10. The work principles are very useful for people who manage or own companies

The work principles focus mainly on how to work with a team of people to achieve a common goal. So if you already work with a team or plan on hiring a team for your own company, these principles can provide a great framework for how to choose the right people and how to work with them for your mutual benefit.

However, as I said, most of these principles can be useful in our personal relationships too.

11. Dalio acknowledges that change is hard and it takes time

I believe that many motivational, self-help books are misleading when it comes to change. They make us believe that change is easy and that all it takes is one decision. Of course, not all books do this, but I think most fail to mention how hard it really is to create meaningful, long-lasting change.

Principles is the only book I have read so far where the difficulty in changing is address so openly and clearly. Dalio believes that people need about 12-18 months to change. He also believes that there are things we can change about ourselves and things we probably cannot change. And even when we rationally know a certain change would be good for us, actually changing the way we think or act may still be hard to do.

This perspective sounds less exciting, but I believe it is much closer to the truth. I’m glad he addressed it in his book.

12. Dalio managed to put into words some of the principles that I also believe in, but that I was unaware of or unable to express with such clarity and power

I’m always happy when I read a good book and I discover that I resonate with the words, beliefs and values of the author. While reading Principles, I often realized that Dalio was describing principles that I was already living by.

In some cases, I was either unconscious of those principles or I was aware of them, but unable to express and explain them so clearly. Reading a great book and discovering that someone managed to put into words the same ideas that you think and live by is so exciting.

Of course, I still learned a lot from Principles and I still need to work on implementing what I know. But at least now I understand these principles more clearly.

What I don’t like about Principles

1. While the principles in the book are very valuable, they are not easy to implement

This is one of the reasons why I think Principles will not be appreciated by everyone. While I think the principles included are very valuable and can create a meaningful change in someone’s life, they are often rather vague or hard to implement.

Many self-help books often include useful advice that is practical and easy to apply immediately. I think Principles is not as practical as the ideas presented by Dalio are more about how to think and how to do something than about what to do. The principles are guidelines rather than practical tips. And some of these principles are also harder to implement because they are often different from our habits and they can create discomfort at first.

Nonetheless, I honestly believe that these principles are so powerful and so valuable that they are worth the time and effort they require.

Lessons from Principles

Pain + Reflection = Progress

This is one of my favourite ideas in the book. Dalio believes that when you feel pain, this is a signal that you can learn something. If you reflect on that pain and realize what you need to do and what you need to change, you will grow from this pain. But if you avoid your pain, you will miss out on this opportunity.

Try to understand reality as accurately as possible

Dalio believes that it is important to accept and understand reality as it is. As far as I can tell, this covers everything: the actual world we live in, ourselves and other people. He often talks about the importance of being honest and open about who we are and what we are good at and what we are not so good at.

Be radically open-minded and radically transparent.

Radical open-mindedness and radical transparency are two of the most important principles in the entire book. He believes that these 2 principles can help you learn faster, become more efficient and create meaningful work and relationships.

Have thoughtful disagreements

When people disagree, they often decide not to discuss that topic anymore. Dalio believes we should discuss topics we understand differently so that we identify what is the truth. Being open and respectful makes it possible to understand each other better and it gives us the opportunity to learn more.

Make your own principles

This book includes many useful life and work principles that you can apply. However, Dalio also advises you to come up with your own principles. Try to observe how you make decisions and why and write down the principles you live by. This way you can keep track of them and further refine them in time.

Quotes from Principles

“Evolving is life’s greatest accomplishment and its greatest reward.”

“Whatever circumstances life brings you, you will be more likely to succeed and find happiness if you take responsibility for making your decisions well instead of complaining about things beyond your control.”

“Truth – or, more precisely, an accurate understanding of reality – is the essential foundation for any good outcome.”

“Radical open-mindedness and radical transparency are invaluable for rapid learning and effective change.”

“Don’t mistake opinions for facts.”

“Don’t hold opinions about things you don’t know anything about.”

Principles has many more interesting and valuable ideas and quotes that I could include here. But I believe that you’ll find it much more enjoyable to discover them yourself, so I only wanted to share a few of them here.

Should You Read Principles?

Absolutely! I think everyone should read Principles. If you want to better understand yourself, the world we live in and the path to success, Principles can help you a lot. If you want to learn how to think better and more accurately, this is a great book for you.

If you manage a team or own a company and you want to create an idea meritocracy and achieve excellent results, you should definitely read Principles.

As I said before, I know that not everyone will love this book because of various reasons. But if you want to challenge yourself, learn how to think better and learn from a great model, give it a chance. Who knows? Maybe it will change your life!

Leave a Comment

Your email address will not be published. Required fields are marked *