My Notes on Dalio's Book of Principles

Hongtao Hao / 2021-11-20


Most importnat lessons I have learned from this book:

  • Extremely Truthful. Extremely Honest. Extremely Open.
  • Learn from your mistakes. Learn from your pain. “Most learning comes from making mistakes and experiencing the pain of them.”
  • “Pain + Reflection = Progress”
  • Accept your realities, however harsh they might be. For example, accept you are poor, short, and ugly.

Introduction #

  • There are “laws of life”.

  • We need to learn how to interact with life or reality more effectively.

  • Different domains have their own principles. But there are also overarching “life principles” that apply to all situations.

  • The problems you are facing in life are the results of violating one or more these “life principles”.

Part 2, my most fundamental life principles #

Where I’m coming from #

  • “Encounters with reality that will require you to make decisions.”

  • “I wrestled with my reality, reflected on the consequences of my decisions, and learned and improved from this process.” This resonates with my belief so much. You have to reflect on the results of your decisions every day, make improvements, so that you can avoid the suffering you had today.

  • Be totally truthful.

  • No talking behind people’s backs.

  • From a mistake, you can obtain a principle to avoid similar mistakes in the future.

[E]ach mistake was probably a reflection of something that I was (or others were) doing wrong.

Great people are never born great. They become great by learning from their mistakes (many of them), and dealing with their weaknesses. The better you learn from your painful mistakes, the faster you get what you desire.

[M]ost learning comes via making mistakes and reflecting on them.

[P]ain is required to become stronger.

My most fundemental principles #

[A]ccept the realities rather than wish that they don’t exist … work with them rather than fight them

  • Meaningful work, meaningful relationships, interesting experiences

  • “Good” means working consistently with natural laws; “bad” means working against natural laws.

  • The process of getting want you want is what really matters, rather than the result itself.

  • People make a lot of money because they provide what the society needs, not because they want to have money.

  • To succeed in life, we need to know ourselves——our values, abilities, strengths and weaknesses——and then find “the right fits.”

Most people don’t like helping others explore their weaknesses, even though they are willing to talk about them behind their backs.

The personal evolutionary process #

Our quality of life is a function of how good or bad our decisions are.

In pursuit of our goals, we “encounter problems, make mistakes, and run into personal weaknesses.” How we approach these difficulties determine how fast we move to our goals.

To realize our dreams, we need to reflect on our encounters with reality in order to understand it better and to know how to interact with it to get what we want from it.

Your most important choices #

  1. Reflect on, rather than flee from, your pain.

If you don’t reflect on your pain: why it happends, and what you can improve later, you’ll encounter them over and over again.

[M]ost learning comes from making mistakes, reflecting on the causes of the mistakes, and learning what to do differently in the future.

  1. Face harsh realities, rather than avoiding them.

You have to accept what is REAL before you can make wise choices.

  1. No need to worry about appearing good (to others); Instead, worry about achieving your goals.

  2. Consider first-, second-, and third-order consequences when making decisions. Not just the first-order consequence, which is often the opposite from the second-order consequence.

  3. Hold yourself accountable.

5-step process to getting what you want out of life #

Life is a game. There is no end to getting better at this game.

The five steps:

  1. Set goals.
  1. Identify problems and not tolerate them.

  2. Diagnose the problems.

  • At this stage, don’t think about solutions yet.
  • Look at yourself and other objectively.
  1. Design the plan (Determine the solutions)

  2. Do the tasks.

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).

My management principles #

To have a great company, you need a great culture and great people.

Summary and table of principles #

Never say anything about a person you wouldn’t say to them directly.

I stopped reading the book here. I started reading the Chinese version of this book from start to finish. Here is my summaries of this book in Chinese.

Last modified on 2022-10-01