The billionaire hedge fund manager and best-selling author on defining success, the value of money, and how establishing a few guiding principles can make all the difference.
BY JEFF HADEN, Written on: Jun 26, 2023
Think “billionaire” and Ray Dalio probably doesn’t spring to mind, even though over time Bridgewater Associates, the hedge fund he launched from his apartment in 1975, became the largest hedge fund in the world.
Even though he’s worth approximately $19 billion. Even though his book Principles: Life and Work has sold over million copies. And even though he’s the co-creator of PrinciplesYou, the best personality assessment I’ve taken.
And even though he’s offered a wealth of advice and perspective. Here are three of my favorites.
Ray Dalio on Success
According to a 2009 study, affluence is a weak predictor of happiness.
Why? According to this famous Princeton study, making over $75,000 (in today’s dollars, say $85,000) is “neither the road to experience happiness nor the road to relief of unhappiness or stress” because it doesn’t improve our ability to do what matters most to our emotional well-being.
“Success” is also a weak predictor of happiness. Plenty of people achieve a goal, only to realize the goal didn’t matter as much as they thought, or that they had pursued the wrong goal all along.
As Dalio writes:
I learned that if you work hard and creatively, you can have just about anything you want, but not everything you want.
Maturity is the ability to reject good alternatives in order to pursue even better ones.
Instead of defining success by a finish line – a number, a metric, a certain house or certain car or certain public profile – define success by whether you get to do work you enjoy. Work that leaves you feeling fulfilled, and satisfied, and happy. Work that allows you to control, as best possible, your own destiny.
The beauty of starting a business is that you are free to choose what kind business, so design and build your business or professional life based on your own definition of success.
Because we all have to make a living… but we also need to live.
Ray Dalio on Money
A large body of research shows the quality of your social relationships is a strong determinant of your happiness.
As Dalio writes:
Remember that the only purpose of money is to get you what you want, so think hard about what you value and put it above money. How much would you sell a good relationship for?
There’s not enough money in the world to get you to part with a valued relationship.
Think about it. Hard-working people like to associate with hard-working people. Successful people like to associate with successful people. Happy people like to associate with happy people.
But the effect isn’t just correlated; the research shows it’s also causal. When a close friend is happier, you feel happier.
So make it a win-win. Help a close friend feel happier. Do something kind. Say something kind. Offer to help, without being asked. Don’t expect them to make you happier. Help them feel happier.
Not only will you enjoy seeing them feel happier – since research shows giving is often just as fulfilling for the giver as for the recipient – you will also feel happier.
Making that relationship one you definitely don’t want to part with.
Ray Dalio on Creating Your Own Principles
Southwestern Airlines founder Herb Kelleher called it the one question rule.
In his case, that question was, “Will this help Southwest Airlines be the lowest-cost provider?” Filtering ideas, issues, and problems through that lens made decisions much simpler.
As Dalio writes:
Principles are fundamental truths that serve as the foundations for behavior that gets you what you want out of life.
They can be applied again and again in similar situations to help you achieve your goals.
One of Dalio’s principles is that it is more important to do big things well than small things perfectly. Another is that where partnerships are concerned, consideration and generosity are more important than money. Another is that his goal is to be right, regardless of whether the right answer came from him or someone else.
Defining a few of your own principles will not only make decision-making easier, it will also help keep you on track when times get tough.
Say you’re a leader, and you’ve embraced Bill Walton’s believe that success at the highest level in basketball – and by extension, in any pursuit – comes down deciding that your happiness can come from someone else’s success.
Embracing that principle makes a number of decisions easier. You’ll never take credit for someone else’s ideas. You’ll ensure people feel appreciated and respected. You’ll admit you don’t have all the answers.
You’ll treat people the way they deserve to be treated, and it will be easier for them to be more successful.
And for you to be more successful.
Choose a few principles you will live by, and filter decisions, especially difficult decisions, through those lenses, and you’ll be muc
That’s a great way to ensure you get what you want out of life, in the way you want to live your life.
