How to Create a System to Achieve All of Your Goals — According to Ray Dalio
Ray Dalio, creator of one of the largest investment funds in history (Bridgewater Associates) says that his success did not come from guessing which direction will the stock market take, he says his fortune has grown thanks to his perspective about mistakes.
For Dalio, an error amounts to an opportunity to reflect and extract what he calls principles. In his words:
“… I have come to understand that my life is like a game and within it there are problems — and mistakes. My task is to face these problems as riddles that I must solve … when I solve them, I receive a diamond in the form of a principle that helps me prevent a reunion with the same type of mistakes in the future … ”
All this is broken into small formulas to prevent impulsive reactions to errors, which Dalio has labeled them as “another one of those”.
Throughout his career as a financial and economic analyst, Dalio concluded that the first principle that must be learned — in order to be successful, has to do with “hyper-realism.” This means that it is essential to accept reality as it is to then work in order to make it a better version.
“Successful people understand reality and know that it is governed by cause and effect relationships”
Many criticized Dalio, since for them he is offering conformism. But in fact it is quite the opposite. Leaders have their feet on the ground but work intelligently, not hard, to fulfill what they dream this world could look like.
It is vital to live in the real situation and not live in how we want the truth to be. Simply put, for Dalio, having a precise understanding of reality is the essential foundation for positive results.
“Idealists become a problem since they perceive the world as they wish it were instead of seeing it as it really is.”
The next principle has to do with being “radically open.”
For Dalio, being a radically open-minded person is someone willing to receive constant feedback, almost like being a circuit designed to learn transparently— without swerving around problems. You may be afraid to listen to what others think, but once you understand that this belief has put a ceiling on your growth and you are willing to break that barrier, you begin to move upwards.
This also applies for you to contribute to your community by sharing your perspective on how the world works.
After falling in love with reality and being radically open, you must implement this principle, being the most important of all:
PAIN + REFLECTION = PROGRESS.
90% of the world’s population avoids pain. Once the source of the pain is identified, we tend to block its entrances and move to another side, which is totally acceptable since we, humans, are designed to avoid painful experiences at all costs. But it seems that Dalio finds his diamonds right in these experiences. He does so through a simple formula: Pain plus reflection equals progress.
By becoming a hyper-realistic, being open-minded and reflecting when you are in pain, you have hacked the system. The only thing missing is to create your own system based on Dalio’s five steps:
1- Define your goals
2- Face your problems
3- Diagnose the root cause of the problem
4- Design a route to correct the root cause of the problem
5- Do what is necessary
Literally out of this system comes innovation. A principle is implemented, its results are evaluated and adjusted to obtain better results. If you have an efficient system that allows you to design, evaluate and adjust your goals it is inevitable that you meet them. Finally, your goals must reflect your aspirations, they must arise from abundance-driven thinking and not from scarcity-driven thinking.
If you did not get the desired results, Dalio gives us another one of his gems: First you must write what you wanted to happen, second you must accept what actually happened, third you must reflect on the experience and finally adjust your behavior to meet your goals .
If you want to know more about Ray Dalio I invite you to read his book, Principles of Life and Work.
