Dec 5, 2017
Principles are fundamental truths that serve as the foundations for behavior that gets you what you want out of life.
In this episode of Made You Think, Neil and I discuss the book Principles by Ray Dalio. We’ve been fans of Dalio’s work since it was just a PDF floating around the Internet, and this massive tome delivers so many useful guidelines for how to live and work.
We covered a wide range of topics, including:
And much more. Please enjoy, and be sure to grab a copy of Principles here and to check out Nat’s Notes on the book!
If you enjoyed this episode, be sure to check out our episode on How to Think Like Elon Musk, to emulate Musk’s way of thinking for huge advantages in both work and life, and our episode on Antifragile by Nassim Taleb, to learn how to profit from chaos.
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0:00 - Introductory quote and some information on the book and on the author Ray Dalio. Also, some of Dalio’s achievements and a bit on how he began with investing.
9:07 - Dalio leaving this company, some discussion on his meditation practice, meditation being a big factor in his success, and the emotional ups and downs that come with startups.
12:46 - Some more discussion on meditation drastically improving your decision-making skills and being more level-headed.
14:45 - Meditation on helping you systemize your thinking and some thoughts on the creation of these principles in the book. “It’s a very useful tool to have these decision-making criteria set-in-stone so that you know what you’re going to do and not let your emotions override you.”
17:34 - Journaling and writing out exactly why you’re doing things, then reflecting back on that later. Narrative fallacy with reflection, as well.
19:57 - Giving more attention to the history of what’s been happening instead of only what you notice in the current time period. Also, a bit on the persistence of certain problems throughout the time.
22:46 - Dalio beginning to improve his systems, develop understanding and principles, improve his reasoning, and more. Tangent at 23:36 on seeking out the smartest people to learn from them and how the opposite largely happens today. “Your arguments can’t improve if they’re only up against people who agree with you already or the weakest version of the other person’s argument.”
24:41 - The underappreciated aspect of constructive criticism, and how the ego can negatively impact this. How having someone much more skilled than you rip apart your work and give you blunt feedback on it can help you grow tremendously if you don’t let your ego get in the way.
25:48 - The destructive nature of college forcing you to put so much ego into your work and to not show your work until it’s perfect. How this negatively impacts the way that you handle feedback.
27:12 - Spending more time now to optimize and spend less time on things in the future. Building machines for tasks that will most likely have to be repeated in the future. Also, putting the machine first and yourself/ego second.
31:15 - Giving yourself the same advice that you would give to someone else in your position. Also, treating yourself the same way that you would treat someone else that you care about, which rarely happens.
34:16 - Some of Dalio’s influences, Nat and Neil’s favorite book recommendations from Dalio, and some discussion on his book recommendations in general.
36:09 - Delving into some of the principles from the book and how they develop. How a majority are simple rules for engagement in everyday encounters. Also, a bit on saving mental energy by making systems for daily activities and creating software for decisions where ever you can.
39:52 - Optimizing certain aspects of businesses, the importance of speaking up in a business if there’s something to optimize upon, memory and past decisions, and some discussion on improving upon group decision-making.
43:51 - The advantages of lowering your verbal filter and being radically honest with improving life, business, and relationships. “There are things that just go unsaid for so long, but everyone’s thinking them, and then they just blow-up at a certain point.”
45:11 - The first principle and a bit on taking action on problems now, and not waiting for them to improve. “Embrace reality and deal with it.”. Developing a reflexive action towards pain that causes you to reflect upon it, rather than avoid it. “Pain plus reflection equals progress.”
50:15 - The five-step process for confronting your own weaknesses. (#1 - 50:20) (#2 - 50:26) (#3 - 50:39) (#4 - 53:53) (#5 - 54:46)
54:53 - Taking ownership of things, even when they’re not your fault. There is usually always some way that you played into it (hiring the wrong person, training them wrong, a faulty machine you designed, etc). Also, how management can cause issues down the line, with the issues listed earlier.
56:55 - The five-step process for getting what you want out of life. (#1 - 57:31) (#2 - 58:26) (#3 - 59:03) (#4 - 1:02:46) (#5 - 1:02:55)
1:03:45 - How the principles are outlined and organized. Also, the third principle, to be radically open-minded and the two impediments to this.
1:06:45 - The two-step process for decision making. A bit on avoiding the first solution that you find which confirms your already held beliefs, as well. The confirmation bias.
1:10:35 - The fourth major principle on understanding that people are wired very differently and a bit on challenging other people’s perspectives to get to know certain aspects of them. Also, bringing up controversial topics to test them.
1:14:54 - The last major principle on learning how to make decisions effectively and some discussion on creating a decision plan, then reaching out to others in a field related to that decision and getting feedback from them. “The biggest threat to good decision making is harmful emotions and if you can systematize as much as possible, then emotions won’t get in the way.”
1:18:03 - Using the expected value calculation and using this with deciding which goals to currently go after. Also, making goals much larger and trying to reach for the inflated goal, eventually reaching beyond the original goal or at the original goal easier.
1:21:49 - The first work principle and how the life principles somewhat form the work principles in the book. Also, how you should go about reading the book and what may be of the most help to you.
1:23:52 - The last section on creating your own principles. Wrap-up and a bit of information on the newsletter and the episode outlines.
1:26:28 - Some fun closing thoughts and stories. (Tangents starting at 1:22:47 on Clay Matthews from the GB Packers and on other goodies.)
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