Principles

How did Ray Dalio, the child of an ordinary medium-class family create the world’s largest, and most successful hedge fund, currently managing over $150 billion USD? In a word: principles. Ray Dalio created a set of principles for personal and professional life that serves as an operating system for living based on radical honesty and radical transparency thriving within an idea meritocracy. An idea meritocracy is "a system that brings together smart, independent thinkers and has them productively disagree to come up with the best possible collective thinking and resolve their disagreements in a believability-weighted way." To "believability-weight" something means to determine an idea's legitimacy based on the track record and the ability of the idea's originator to clearly explain their concept. Dalio believes an idea meritocracy is the best decision-making system because it requires honesty and leads to continual improvement. Dalio divided his principles into Life Principles and Work Principles. The life principles apply to individual success, and the work principles guide group success. Dalio decided to share his principles to help others succeed. His goal is to inspire people to discover and write their principles and to refine them through experience and reflection. Dalio believes good, experience-tested principles can lead people to better decisions, more mutual understanding, and superior outcomes