Wednesday, 20 March 2019

Principles of Success - Ray Dalio (Part 1)

Ray Dalio is one of my favourite investment guru. He is clever, truthful and humble and always see the bigger picture that matters. Last year he created new animated mini-serial videos on YouTube after the all famous “How the Economic machine works”. The new video series, Principles for Success focuses on the life principles that have Ray Dalio the most. Refer to link here 

Below is the extract I summarised from the video.

1 - THE CALL TO ADVENTURE

Deal with your “not knowing”
You do not know much relative to what you need to know. Success in life is more of knowing how to deal with our “not knowing” than anything we know.

Be an independent thinker
Only you can develop your own principle based on your own value! The principle of smart ways in handling things that take place in your life over and over again. They are principle for everything.

You need to think for yourself about what is true.

Gain vast experience from making mistakes and learning from them.
Everyone will make mistakes all the time and also struggle to make good decisions. But this is the reality and we should learn from it.  

Unless you want a life that is directed by others, you NEED to: 

1) Decide what to do
2) Have the courage to do it

You will not know that at first, but you will only know that from going on your own life adventure.
In your lifetime, you will encounter millions of decision-making situations. 

The quality of your decisions will determine the quality of your life. 

Over your lifetime, the most valuable things you learn are the results of mistakes you made and reflected on and help form principles, and I wouldn’t make the same mistakes again.

2 - EMBRACING REALITY AND DEAL WITH IT 

The path you take in life is your most important decision. In Ray Dalio’s case, he wanted his life to be great.  He feared boredom and mediocracyEver since he is a kid, he pursued over the things he wanted..., crash...got up and run, and crash again, and got up and run again, and each time he crashed, he learnt something, got better, and crash less. Doing that over and over again, learn to love this process, even the crashing point of it. Through this he encountered reality and he learnt how to deal with it.

Truth is the essential foundation for producing good outcomes.
By truth, it does not mean how the world works. The law of reality is given by nature. Humans did not create them. But we can use the reality to foster our own revolution and achieve our goals. Realizing that made us a hyper realist. You can become someone who discover the great reward of deep understanding, accepting it and working with reality as it is, and NOT as how you wish it will be.

Hyper Realist Means:
To choose your own dream and then achieve it. This is having:
  • Dreams + Reality + Determination = a successful life

What does a successful life look like?
Each of us need to decide for ourselves of what success is. We choose a goal base on our values and decides the best path to achieve it. But we all need approaches to making decisions to work well especially when facing, problems, mistakes and weaknesses that stand in our ways.
To succeed, we must embrace all our reality! Especially the harsh reality we wish isn’t true. Looking at the harsh reality at first will cause you lots of pain. But you will soon learn that the pain is just psychological. Your seeing things differently will make all the difference.
You can treat pain that is acute as great learning opportunities at hand which means:
  • Pain + Reflection = Progress

Ray Dalio highlighted the importance of meditation for him. But I must highlight that it’s the meditation in the right things that can help. Learn to calm yourself down and embrace reality and dealt with them, the reward can bring you pleasure and the pain faded.
Each of us has the unique capability to think largely and reflect upon ourselves and our circumstances to direct our own personal revolution.
This may well be just following a 5-step simple process.

3 - THE FIVE-STEP PROCESS

To recap: we discuss how important it is to reflect carefully after experiencing pain. This can help you to develop principle that can prevent from repeating the same mistakes in future. The successful principle are 5 steps.

1. GOALS 
Know your goal and run after it. What is best for you depends on your nature. So you really need to know yourself and what you want to achieve in life.

2. PROBLEMS
To encounter the problems that stand in the way of achieving your goal. These problems are typically painful. If handle badly, some of them can lead to ruins. To evolve, you need to identify those problems and not tolerate them. 

3. DIAGNOSIS
To diagnose these problems to get to their causes. Do not jump too quickly to solutions! Take a step back and reflect in order to clearly determine the symptoms from the disease. 

4. DESIGN
To design plan to eliminate the problems. This is where you will determine what you need to do to get around them.

5. DO IT
Is to execute those design. Pushing ourselves to do what that is needed to progress towards your goal. A successful life essentially comprising of doing these 5 steps over and over again.
Evolution is simply a process of either adapting or dying. Conceptually it is the 5 steps. And as we push through these processes to higher and higher level of success, then you will find that as you did it better, your struggling never become easier. This is because the more capable you become, the greater the challenges you will take on.

Because different people are strong and weak at different things, most people cannot do all five steps well. Not facing these realities mean you can stretch further than you should. And as the height gets greater, your falls could also be greater!
Sometimes terrible things happened to us in life that can ruin us or profoundly improves us. This depends on how we handle it.

Stay tuned to Part 2. 

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