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7 key lessons from Principles by Ray Dalio

7 key lessons from Principles by Ray Dalio
Source: https://www.amazon.in/Principles-Life-Work-Ray-Dalio-ebook/dp/B071CTK28D

I read Principles by Ray Dalio as part of a book club started by the founder our company, Wingify. The book is a long read and some parts of the book actually move so slow that you are tempted to give up. However, the gems hidden in this book are priceless and Ray Dalio's perspective will bind a lot of intuitions and questions you have about the world into a coherent narrative so that it all makes sense together.

In this note, I am going over the seven meta-level components that I could find in Dalio's perspective. It will provide you with a summary of all major ideas in the book. In later notes, I will try and write a more detailed note on each of the seven meta-level components.

The seven meta-level components of Ray Dalio’s Perspective

In brief, I am touching upon the seven components so that the reader can create a mental map of the perspective presented by Dalio:

  1. Everything is a machine: This is a mental model that is central to the whole perspective. Everything from the most macro things like solar systems and galaxies to the most micro things such as our organs or even cells are machines that are designed to achieve some goals.
  2. Goal orientation in a multi-level perspective: If everything is a machine designed to achieve a goal, Dalio argues that the prime focus for a successful life needs to be objectively towards a clear goal although the goal can be anything based on your desires. Dalio also argues that one should have a capability to see goals and realities look from a multi-level perspective.
  3. Evolution in the context of hyperrealism: However, he clarifies that even though focussing on the goals is the prime focus, achieving the goals is not the meaning of life. Goals act as a pulling force towards evolution and evolution is the true meaning of life. However, you cannot guide the process of personal evolution until you understand the objectivity of reality and the fact that you will never be able to accurately see the entire reality from just your personal observations.
  4. The people dimension: However, like a camera puts together different photographs into a panorama, the only way you can come closest to seeing the objective reality is by putting together perspectives of different believable people. People for that matter have this innate specialty that every individual’s brain is wired differently from others and more likely than not provides a different perspective to the same situation.
  5. The believability weighted decision making system: Dalio argues that the best approach to decisions then is a decision making system where a decision is taken by taking together people from multiple perspectives and then weighing their opinions based on the validity of their experience towards the problem at hand (believability). Dalio has applied this approach to a company that he has built and evolved to be an idea-meritocracy where the power to decision making doesn’t reside in hierarchy but the person’s believability on the topic.
  6. Radical Transparency and Radical Open-Mindedness: Because humans are machines themselves that act as pieces to the organizational machine, it is essential to adopt a radically transparent and radical open-minded approach to dealing with other people (also machine components) so that we and everyone else in our machine have the unhindered view of the objective reality. This objective reality is needed (and deserved) by everyone to accelerate the process of evolution, which is the meaning of life.
  7. The emotional dimension: While personal evolution is the deeper meaning of life, meaningful relationships are the beauty of the journey. While the “everything is a machine” genesis of the whole viewpoint begs for a practical objectivity in every situation, the overall perspective needs to account for the fact that happiness means spending your life around meaningful relationships with the machines that you live and work with.


I think it is rare that someone with thorough credibility of success fleshes out such an evolved perspective of life and puts it into a book for the general audience to learn from. The beauty of the perspective I have gained from this book is that I do not need to create time to adopt and utilize this perspective in my life.

The one thing that this book has helped me develop is the habit of being honest. Before I read this book, I was always sure that honesty is the best policy in most cases. But often there used to be a doubt in my mind that can there be something like over honesty or are there situations in life when dishonesty is a better moral choice than honesty. Principles helped me realise that there is no better way to deal with fellow human beings other than "radical transparency and radical open-mindedness".