Ray Dalio Quotes

People who acquire things beyond their usefulness not only will derive little or no marginal gains from these acquisitions, but they also will experience negative consequences, as with any form of gluttony.

When there is pain, the animal instinct is 'fight or flight' (i.e., to either strike back or run away) - reflect instead. When you can calm yourself down, thinking about the dilemma that is causing you pain will bring you to a higher level and enlighten you, leading to progress.

It all comes down to interest rates. As an investor, all you're doing is putting up a lump-sump payment for a future cash flow.

Once you accept that playing the game will be uncomfortable, and you do it for a while, it will become much easier (like it does when getting fit). When you excel at it, you will find your ability to get what you want thrilling.

Treat your life like a game.

Sometimes we forge our own principles and sometimes we accept others' principles, or holistic packages of principles, such as religion and legal systems. While it isn't necessarily a bad thing to use others' principles - it's difficult to come up with your own, and often much wisdom has gone into those already created - adopting pre-packaged principles without much thought exposes you to the risk of inconsistency with your true values.

Successful people ask for the criticism of others and consider its merit.

Remember that experience creates internalization. Doing things repeatedly leads to internalization, which produces a quality of understanding that is generally vastly superior to intellectualized learning.

I worry about another leg down in the economies causing social disruption because deleveragings can be very painful - it depends on how they're managed.

Imagine if you had baseball cards that showed all the performance stats for your people: batting averages, home runs, errors, ERAs, win/loss records. You could see what they did well and poorly and call on the right people to play the right positions in a very transparent way.

He who lives by the crystal ball will eat shattered glass.

Demand is best measured in terms of spending. You know, I think in traditional economics, it's a mistake to measure it in terms of the quantity of goods.

It is far more common for people to allow ego to stand in the way of learning.

Unlike in school, in life you don't have to come up with all the right answers. You can ask the people around you for help - or even ask them to do the things you don't do well. In other words, there is almost no reason not to succeed if you take the attitude of 1) total flexibility - good answers can come from anyone or anywhere (and in fact, as I have mentioned, there are far more good answers 'out there' than there are in you) and 2) total accountability: regardless of where the good answers come from, it's your job to find them.

A beautiful deleveraging balances the three options. In other words, there is a certain amount of austerity, there is a certain amount of debt restructuring, and there is a certain amount of printing of money. When done in the right mix, it isn't dramatic.

I think so many people are reactive ... they see things in a short term way they're right up against it.

I'm going to give away a lot more than half my money. I'd be happy to give that to the government if the government put together programs that were like I'm giving away to charity, in which I believe the money is effectively used to help people.

I believe that our society's "mistake-phobia" is crippling, a problem that begins in most elementary schools, where we learn to learn what we are taught rather than to form our own goals and to figure out how to achieve them. We are fed with facts and tested and those who make the fewest mistakes are considered to be the smart ones, so we learn that it is embarrassing to not know and to make mistakes. Our education system spends virtually no time on how to learn from mistakes, yet this is critical to real learning.

People who excel at book learning tend to call up from memory what they have learned in order to follow stored instructions. Others who are better at internalized learning use the thoughts that flow from their subconscious. The experienced skier doesn't recite instructions on how to ski and then execute them; rather, he does it well "without thinking," in the same way he breathes without thinking. Understanding these differences is essential.

There are far more good answers "out there" than there are in you.

It's tough to be tough on people.

Pain + Reflection = Progress

The pain of problems is a call to find solutions rather than a reason for unhappiness and inaction, so it's silly, pointless, and harmful to be upset at the problems and choices that come at you (though it's understandable).

Nature is a machine. The family is a machine. The life cycle is like a machine.

Almost everything is like a machine.

To be successful, we need everyone to think independently and work through disagreement to decide what's best.

It is a law of nature that you must do difficult things to gain strength and power. As with working out, after a while you make the connection between doing difficult things and the benefits you get from doing them, and you come to look forward to doing these difficult things.

People who confuse what they wish were true with what is really true create distorted pictures of reality that make it impossible for them to make the best choices.

Credit is a promise to deliver money. It will produce GDP but you'll create credit ... So you reach a certain point that that you can't do that anymore ... There are choices. And how do we best support, apportion the money? How much is going to be transferred?

You'll see that excuses like "That's not easy" are of no value and that it pays to "push through it" at a pace you can handle. Like getting physically fit, the most important thing is that you keep moving forward at whatever pace you choose, recognizing the consequences of your actions.

When you're centered, your emotions are not hijacking you.

Meditation, more than any other factor, has been the reason for what success I've had.

Success is achieved by people who deeply understand reality and know how to use it to get what they want. The converse is also true: idealists who are not well-grounded in reality create problems, not progress.

The more you think you know, the more closed-minded you'll be.

Above all else, I want you to think for yourself, to decide 1) what you want, 2) what is true and 3) what to do about it

Radical transparency fosters goodness in so many ways for the same reasons that bad things are more likely to take place behind closed doors.

Competitiveness is really what it costs you per man-hour to get you what you want. In other words, there's an education level that plays into the mix and so if it's inexpensive to buy an hour of real good education in places like China versus the U.S., that factors in.

There is a strong tendency to get used to and accept very bad things that would be shocking if seen with fresh eyes.

If you can stare hard at your problems, they almost always shrink or disappear, because you almost always find a better way of dealing with them than if you don't face them head on. The more difficult the problem, the more important it is that you stare at it and deal with it.

In China anything less than 6% growth is a recession meaning that it also causes financial problems and it's disruptive and it's a problem.

The key is to fail, learn, and improve quickly. If you're constantly learning and improving, your evolutionary process will be ascending. Do do it poorly, it will be descending. So I believe evolving is life's greatest accomplishment and its greatest award.

More than anything else, what differentiates people who live up to their potential from those who don't is a willingness to look at themselves and others objectively

The economy is like a machine.

People with good work habits have to-do lists that are reasonably prioritized, and they make themselves do what needs to be done. By contrast, people with poor work habits almost randomly react to the stuff that comes at them, or they can't bring themselves to do the things they need to do but don't like to do (or are unable to do).

I believe that one of the best ways of getting at truth is reflecting with others who have opposing views and who share your interest in finding the truth rather than being proven right

Meditation more than anything in my life was the biggest ingredient of whatever success I've had.

I believe that understanding what is good is obtained by looking at the way the world works and figuring out how to operate in harmony with it to help it evolve.

To make money in the markets, you have to think independently and be humble.

So how does the machine work that you have a financial crisis? How does deleveraging work - what is the nature of that machine? And what is human nature, and how do you raise a community of people to run a business?

What matters most is that the people you work with share your values.

Know what your people are like, and make sure they do their jobs excellently.

Most people have a hard time confronting their weaknesses in a really straightforward, evidence-based way. They also have problems speaking frankly to others. Some people love knowing about their weaknesses and mistakes and those of others because it helps them be so much better, while others can't stand it.

So I learned that the people who make the most of the process of encountering reality, especially the painful obstacles, learn the most and get what they want faster than people who do not ... In short, I learned that being totally truthful, especially about mistakes and weaknesses, led to a rapid rate of improvement and movement toward what I wanted.

The best advice I can give you is to ask yourself what do you want, then ask 'what is true' - and then ask yourself 'what should be done about it.' I believe that if you do this you will move much faster towards what you want to get out of life than if you don't!

Radical transparency is critical to having an idea meritocracy because it shows what's actually happening without spin and prevents people from maneuvering politically behind each others' backs. It brings problems and weaknesses to the surface and allows people to see how they are dealt with, so it's great for training people on how to deal with real problems.

There is slow growth, but it is positive slow growth. At the same time, ratios of debt-to-incomes go down. That's a beautiful deleveraging.

Everyone has to decide for themselves what works for them and their organization.

I've learned that each mistake was probably a reflection of something that I was (or others were) doing wrong, so if I could figure out what that was, I could learn how to be more effective.

School typically doesn't prepare young people for real life - unless their lives are spent following instructions and pleasing others. In my opinion, that's why so many students who succeed in school fail in life.

I notice a difference from the moment I meditate.

One of the greatest sources of problems in our society arises from people having loads of wrong theories in their heads - often theories that are critical of others - that they won't test by speaking to the relevant people about them. Instead, they talk behind people's backs, which leads to pervasive misinformation.

What I'm trying to say is that for the average investor, what I would encourage them to do is to understand that there's inflation and growth. It can go higher and lower and to have four different portfolios essentially that make up your entire portfolio that gets you balanced.

Over time, it also became important for me to share my management principles with the people I worked with because we had to agree on how we should be with each other - and that way is unique. Because the logic behind being radically honest and radically transparent with each other wasn't clear, it had to be spelled out in these principles.

Ironically, people who suppress the mini-confrontations for fear of conflict tend to have huge conflicts later, which can lead to separation, precisely because they let minor problems fester. On the other hand, people who address the mini-conflicts head-on in order to straighten things out tend to have the great, long-lasting relationships.

When growth is slower-than-expected, stocks go down. When inflation is higher-than-expected, bonds go down. When inflation is lower-than-expected, bonds go up.

Constantly probe the people who report to you, and encourage them to probe you.

In return, society rewards those who give it what it wants. That is why how much money people have earned is a rough measure of how much they gave society what it wanted.

I think meditation has been the single biggest reason for whatever success Ive had

The big question is: When will the term structure of interest rates change? That's the question to be worried about.

For every mistake that you learn from you will save thousands of similar mistakes in the future, so if you treat mistakes as learning opportunities that yield rapid improvements you should be excited by them. But if you treat them as bad things, you will make yourself and others miserable, and you won't grow.

Heroes inevitably experience at least one very big failure that tests whether they have the resilience to come back and fight smarter and with more determination.

I'm just saying that if you understand how the economic machine works, it just works like a machine. There are cause-effect relationships.

When two intelligent parties disagree, that's when the potential for learning and moving ahead begins.

I believe there are an infinite number of laws of the universe and that all progress or dreams achieved come from operating in a way that's consistent with them. These laws and the principles of how to operate in harmony with them have always existed. We were given these laws by nature. Man didn't and can't make them up. He can only hope to understand them and use them to get what he wants.

There are two main drivers of asset class returns - inflation and growth.

I pay about a third in taxes, I give away about a third, and I follow the law.

I found that whenever I encountered a situation, rather than just reacting to it, it was tremendously useful to think carefully about how I should react to it and other situations like it. Besides providing me with more thoughtful responses in each of these cases, approaching things this way provided me and others with guidance on how to deal with similar situations when they came up in the future.

Once we get the things we are striving for, we rarely remain satisfied with them. The things are just the bait. Chasing after them forces us to evolve, and it is the evolution and not the rewards themselves that matters to us and to those around us. This means that for most people success is struggling and evolving as effectively as possible.

Principles are what allow you to live a life consistent with those values. Principles connect your values to your actions.

Principles are concepts that can be applied over and over again in similar circumstances as distinct from narrow answers to specific questions. Every game has principles that successful players master to achieve winning results. So does life. Principles are ways of successfully dealing with the laws of nature or the laws of life. Those who understand more of them and understand them well know how to interact with the world more effectively than those who know fewer of them or know them less well.

I believe that we all get rewarded and punished according to whether we operate in harmony or in conflict with nature's laws, and that all societies will succeed or fail in the degrees that they operate consistently with these laws.

The main reason I write the daily observations is because I want to know where I'm wrong. So lots of times if somebody points something out it helps me, and I want to have a diversified bet of uncorrelated bets.

I have been very lucky because I have had the opportunity to see what it's like to have little or no money and what it's like to have a lot of it. I'm lucky because people make such a big deal of it and, if I didn't experience both, I wouldn't be able to know how important it really is for me. I can't comment on what having a lot of money means to others, but I do know that for me, having a lot more money isn't a lot better than having enough to cover the basics.

Don't worry about looking good - worry about achieving your goals.

There is giant untapped potential in disagreement, especially if the disagreement is between two or more thoughtful people

I believe that the biggest problem that humanity faces is an ego sensitivity to finding out whether one is right or wrong and identifying what one's strengths and weaknesses are.

There is an excellent correlation between giving society what it wants and making money, and almost no correlation between the desire to make money and how much money one makes.

I. Utilize the "two-minute rule" to avoid persistent interruptions. The two-minute rule specifies that you have to give someone an uninterrupted two minutes to explain their thinking before jumping in with your own. This ensures that everyone has time to fully crystallize and communicate their thoughts without worrying they will be misunderstood or drowned out by a louder voice.
j. Watch out for assertive "fast talkers." Fast talkers are people who articulately and assertively say things faster than they can be assessed as a way of pushing their agenda past other people's examination or objections. Fast talking can be especially effective when it's used against people worried about appearing stupid. Don't be one of those people. Recognize that it's your responsibility to make sense of things and don't move on until you do. If you're feeling pressured, say something like "Sorry for being stupid, but I'm going to need to slow you down so I can make sense of what you're saying." Then ask your questions. All of them. p367

For me, the best things in life - meaningful work, meaningful relationships, interesting experiences, good food, sleep, music, ideas, sex, and other basic needs and pleasures - are not, past a certain point, materially improved upon by having a lot of money.

If it didn't happen in your life before, then you're not paying attention you don't think it's possible. But almost all important events never happen in your life before.

Watch out for people who think it's embarrassing not to know.

Do not feel bad about your mistakes or those of others. Love them! Remember that one: they are to be expected; two: they're the first and most essential part of the learning process; and three: feeling bad about them will prevent you from getting better.