in Book Summaries

Ten Principles I Live By

I recently finished the free book Principles by Ray Dalio. It’s an interesting piece of nonfiction where Ray lays out the principles he lives his life by, along with his rational for holding principles at all. Sounds boring, right?

If this was some normal person laying out what they believe that’d be the case, but this is Ray Dalio, the founder of Bridgewater Associates. That’s the largest hedge fund in the world, with a near spotless investment record and a famous company culture that values transparency and honesty in an industry infamous for the opposite. So this is a very smart guy laying out what he believes and why.

As such, it is a more interesting read than you would think. Dalio lists some two hundred principles when I think you could cover the same ground in one hundred, so that part drags on, but the beginning section about why it’s important to have and record principles is golden. In short, writing down your principles allows you to evaluate them more objectively, by looking at them on their own outside of your head and determining if you really believe in them or just say so. Values lead to goals, which lead to problems, which lead to diagnoses, then designs, and then tasks, so doing anything without fundamental principles means you’re on a hamster wheel. Plus, it’s easier to make tough decisions with your principles at the ready, because then you can just check them for guidance on which path to take.

I’ve been blogging for a while about my thoughts, but I never thought to lay out the structure behind my beliefs. Reading Principles inspires me to do just that, so that I can challenge and strengthen them through testing and third party observation. So here I go: ten Principles I’ve noticed again and again, phrased as inequalities.

Less > More

“Perfection is Achieved Not When There Is Nothing More to Add, But When There Is Nothing Left to Take Away”
– Antoine de Saint-Expury

The more you cut away without sacrificing function, the better. Whether we are talking about industrial design, politics, sensory overload or just packing for a trip, the best possible version of something is one that uses the least stuff to get the job done. You could rephrase this as an emphasis on efficacy, minimalism, or essentialism – it’s all the same concept.

I try to ask myself what value things add, whether they’re media sources, people, or errant paragraphs. There’s room for them all in theory, but with the above principle in mind, it’s better to cut than to paste. Always thinking about the best way to do more with less reinforces which parts of life are truly important versus which are just noise.

Open > Closed

“Being truthful, and letting others be completely truthful, allows me and others to fully explore our thoughts and exposes us to the feedback that is essential for our learning.” -Ray Dalio

Ray often references the astonishing transparency of Bridgewater, where feedback and truth are so important that the lowest intern can question the CEO’s decision, and every meeting is recorded so that no employee is left out of the loop. He justifies this by saying that transparency shares the truth with more people, which lets them align their perspective better to reality. Such radical corporate transparency reminds me of similarly impressive efforts in the tech space like those of Buffer, whose transparency is almost as famous as the product itself . Or look at success in the personal space with James Altucher, who spills his heart out so regularly in public writing that his family will avoid him so not to be talked about.

If it works for these people, it can work for me. I think things function better when they are shared and talked over with others. My blog does this for me – it makes my thoughts collaborative works in progress, rather than private musings in danger of ossifying into dogma. Keeping things secret divorces them from feedback and reality, which is exactly the recipe for disaster, according to Ray  (and common sense). The only time is makes sense to do so is with state or business secrets that could imperil the entity in question, although saying that does open up a slippery slope of ‘for your own safety’ problems. Better to err on the side of truth.

The more one shares, the more their perspective and that of others becomes aligned with reality. Secrets and lies rarely end well. Look at the story of Enron or Lying by Sam Harris for proof positive of that (although I can’t say my own life is without white lies – need to work on that).

Absolute > Relative

“The good thing about science is that it’s true whether or not you believe in it.” – Neil Degrasse Tyson

Opinions are nothing next to facts. Reason always wins over emotion. Reality doesn’t care what you think. It’s either true or it isn’t, and wishful thinking won’t change anything. So empirical observations, thoughtful experiments, and logical reasoning are superior to any other method seeking to reign instead.

You could take this to be an indicator of atheism or rationalism, or just use it to look at your own feelings and comfort. Your feelings in the moment are almost always relative – look at it from somebody else’s point of view and the best course of action becomes clear. Likewise, instead of thinking about how something will feel, thinking about how it will make you feel after you’ve done it. Time heals wounds, but it also changes things like emotions – yet the facts remain.

Zoom out far enough and the petty complaints or thought I have every day become meaningless. What could I do that matters to someone else, or to me ten years from now? Better to optimize for the absolute long term, rather than the relative now.

Meaning > Entertainment

“In the morning we crave meaning, in the evening we crave feeling.” – Gertrude Stein

There’s nothing wrong with being entertained, but it lacks meaning. Meaningful wins out over fun for anyone older than a teenager.

That’s why I try to avoid television and sugary pop distractions in favor of books and games with friends. Time spent with good friends or good art is not as entertaining in the short run as video games, but in the long term they pay off with intellectual interest, whereas entertaining distractions are one time deposits.

How you define meaning is up to you, but however you do it, it’s better to shoot for than contentment.

System > Goal

“Conclusions are not as important as the reasoning behind them.” – (Think this was Peter Thiel’s quote but can’t find where I heard it…)

Process over product. Acceleration over speed. Measure learning, not test scores. The method by which you gain something is infinitely more valuable than the end result. The process can be applied to new challenges, while the product is static. Better to internalize a habit rather than aim for a certain number of pushups. (James Clear has more on goals vs systems here) Hence the value in becoming a life long learner, and embracing the growth mindset.

Creation > Curation > Criticism

“It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat.” – Theodore Roosevelt

Theo says it better than I ever could – The person who creates something has more to offer than any critic, no matter their relative fame. The critic may know what it takes to make something good, but if they haven’t made something themselves, they remain a glorified spectator. Talk is cheap. It’s much harder to create than to curate or criticize. Ideally, one leads to the other, so that the critic becomes a fellow creator offering their take rather than some heathen with an opinion.

Ray brushes against this with his take on earning opinions. He says everyone is entitled to theories, but not everyone has the right to an opinion. Opinions are forged from experience with the matter at hand. If you’re not part of it, who the hell cares what you think?

Opportunity Cost > Actual Cost

“I regret the things I didn’t do far more than the missteps I made along the way” – David Stanley

Too often we don’t ask ourselves about what happens if we don’t do something, rather than what happens if we do. Oftentimes the opportunity cost of what could have been is greater than the sunk cost of the action in question.

I think that we don’t ask ourselves about what happens if we don’t do something enough, instead focusing on what happens if we do it. I try to cultivate a bias towards action, since you never know what will happen when you go out on a limb. Once again, Ray touches on this by pointing out that the best options are those with fewer Cons than Pros, not those without any Cons.

Iterative > Constant

‘”Let’s just call plans what they are: guesses” – Jason Fried

Who is right in the long run – the progressive or the fundamentalist? ‘Because that’s the way we’ve always done it’ is never a good reason to do something. No, the best results come from iterative experimentation, through refining hypothesizes and building on past learnings. Heck, that’s the only reason why we’re not all still hunters and gatherers.

Thus I welcome the advent of buzzwords like ‘lifelogging’, ‘data-driven solutions’, and ‘A/B testing’. Or you could use the old moniker – evolution. All are born from cautious steps forward taken with past steps firmly in mind. That’s how progress is made – bit by bit.

Character > Comfort

“Do not pray for an easy life; pray for the strength to endure a difficult one.” -Bruce Lee

Being comfy is overrated. All the best parts of life happen outside of your comfort zone. I may have whined at Dad back when he made me do things against my will ‘for your own good’, but looking back, I wish I had spent my childhood more constructively. Now I try to challenge myself whenever things get too comfortable.

Caveats:

All that said, the Eleventh Principle could very well be that the correct answer to any dichotomy is usually somewhere in the middle, which means that none of these are ironclad. Radicals of both sides usually come with their own biases and misconceptions – rarely the the best answer lie at the extremes. Here I’m saying that one side is generally better than the other, but not exclusively or specifically so.

Likewise, these sound like work and no play. But I regard play as vitally important – heck , all the biggest breakthroughs came from smart people playing around and stumbling on epiphanies. And I spend large chunks of my life optimizing for play with others.

That’s  reflected in these principles – since play comes naturally to me, I don’t need a principle for it – rather I need principles that bring me back to getting things done. Ray notes that one person’s principles may not work for another. Therein lies the problem with dogmas like religion or politics – rarely do your personal principles line up exactly with those of someone else, especially those prepared for mass consumption. Yet another reason to write up your own list!

So these principles are just what work best for me, at this point, not prescriptions for others. If you think I’m exceptionally wrong or right with these – call me on it! After all, openness is one of my values.