The Principles for Success by Entrepreneur & Investor Ray Dalio: A 30-Minute Animated Primer

Investor and hedge fund man­ag­er Ray Dalio has a net worth of $18.4 bil­lion. That alone would per­suade a great many of us to lis­ten to any and all advice he has to offer, but unlike many mul­ti-bil­lion­aires, he’s also put no small amount of thought into just what advice to give and how to give it. One rea­son is that the pieces of advice he doles out pub­licly began as pieces of advice for him­self, dis­cov­ered through tri­al and error and refined into a set of prin­ci­ples. These he lays out in his book Prin­ci­ples: Life and Work, the con­tent of which he has also dis­tilled into the ani­mat­ed video above, “Prin­ci­ples for Suc­cess by Ray Dalio.”

Dalio breaks down his own jour­ney to suc­cess as the con­tin­ued rep­e­ti­tion of a five-step process:

  1. Know your goals and run after them
  2. Encounter the prob­lems that stand in the way of get­ting to your goals
  3. Diag­nose these prob­lems to get at their root caus­es
  4. Design a plan to elim­i­nate the prob­lems
  5. Exe­cute those designs

This frame­work already sets Dalio apart from oth­er suc­cess­ful advice-givers, some of whom offer noth­ing more than broad plat­i­tudes about believ­ing in your­self and nev­er giv­ing up hope, and oth­ers of whom fall back on cyn­i­cal cracks about doing unto oth­ers before they do unto you. Dalio, for his part, endors­es a mind­set he calls “hyper­re­al­ism,” the adop­tion of which demands putting the truth before all else. And the hyper­re­al­ist first exam­ines the truth about him­self, assess­ing as objec­tive­ly as pos­si­ble his weak­ness­es as well as his strengths and reg­u­lar­ly draw­ing upon the per­spec­tives of those who dis­agree with him.

Under­ly­ing Dalio’s ideas about hyper­re­al­ism and suc­cess is a mech­a­nis­tic con­cep­tion of human­i­ty, the econ­o­my, the world, indeed all real­i­ty: “Every­thing is a machine,” as he stark­ly puts it. By this, he does­n’t mean we should think of our­selves as pre-pro­grammed robots, but that we can approach all of our choic­es as puz­zles to be fig­ured out. “Most every­thing hap­pens over and over again in slight­ly dif­fer­ent ways,” he says, but most of us, with our view­points biased toward recent his­to­ry and our “ego and blind spot bar­ri­ers” that keep us from see­ing the full pic­ture, mis­tak­en­ly regard the sit­u­a­tions in which we find our­selves as unique, thus mak­ing them into more dif­fi­cult prob­lems than they are.

Of course, even if we embrace hyper­re­al­ism and devel­op ever more reli­able strate­gies to sur­mount the obsta­cles that crop up along our cho­sen paths, we’ll fail as often as we suc­ceed. Dalio tells of his own grand hum­bling in the ear­ly 1980s when he bet every­thing on a depres­sion that nev­er came, and explains how the fall­out taught him that “truth is the essen­tial foun­da­tion for pro­duc­ing good out­comes.” Even if we have no inter­est in doing what it takes to make $18.4 bil­lion, we might still bear in mind the two prin­ci­ple-dri­ven equa­tions that Dalio pro­vides — “Dreams + real­i­ty + deter­mi­na­tion = a suc­cess­ful life” and “Pain + reflec­tion = progress” — along with his con­vic­tion that suc­cess requires not just know­ing the truth of world, but the truth of our­selves as well.

Relat­ed Con­tent:

How The Eco­nom­ic Machine Works: A 30-Minute Ani­mat­ed Primer by Hedge Fund Investor Ray Dalio

Steve Jobs Shares a Secret for Suc­cess: Don’t Be Afraid to Ask for Help

Har­vard Dean Lists the 5 Essen­tial Ques­tions to Ask In Life … Which Will Bring You Hap­pi­ness & Suc­cess

Oprah Winfrey’s Har­vard Com­mence­ment Speech: Fail­ure is Just Part of Mov­ing Through Life

Alain de Bot­ton Pro­pos­es a Kinder, Gen­tler Phi­los­o­phy of Suc­cess

Based in Seoul, Col­in Mar­shall writes and broad­casts on cities, lan­guage, and cul­ture. His projects include the book The State­less City: a Walk through 21st-Cen­tu­ry Los Ange­les and the video series The City in Cin­e­ma. Fol­low him on Twit­ter at @colinmarshall, on Face­book, or on Insta­gram.

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