What does it take to become one of the most successful investors and entrepreneurs of all time?
Is it all about luck? Can you make it with the right mindset and a little hard work? Or do you need all three to be truly successful?
According to my guest today — famed businessman and incredibly successful investor Ray Dalio — it all comes down to your principles.
Martin Luther King Jr. once said, “No work is insignificant. All labor that uplifts humanity has dignity and importance and should be undertaken with painstaking excellence.” And writer T.F. Hodge said, “Fear is the lack of faith in one’s ability to create powerful solutions.” But my friend Ray said:
“Life is like an adventure. If you knew everything, it wouldn’t be nearly as good.” – Ray Dalio
Ray Dalio doesn’t pretend to know everything, but he has learned a lot over his years of working hard to create one of the most successful private companies in the world. He has spent his life making massive strides in the business world — ultimately rising to the top ranks of business owners — and along the way, he’s picked up a lot of wisdom. And today, he’s sharing that wisdom with you and me right here on The School of Greatness!
If you haven’t picked up Ray’s book, Principles, yet, you’re going to want to after listening to this interview. In it, Ray shares the secrets to success that he’s learned over the years. The great Bill Gates said about it, “Ray Dalio has provided me with invaluable guidance,” and Mark Cuban of Shark Tank fame said, “Principles is the book I wish I had as an entrepreneur.”
This guy is big time, and I’m grateful to him for coming on the show today! Let’s dive in!
Who Is Ray Dalio?
Ray Dalio is the Founder, Co-Chairman, and Co-Chief Investment Officer of Bridgewater Associates, the fifth most important private company in the U.S., according to Fortune magazine. Forbes named him the 69th richest person in the world, and he has been called the “Steve Jobs of Investing” by Wired magazine, and named one of the top 100 Most Influential People by TIME magazine.
He is also the author of the New York Times #1 bestseller Principles, which explains and outlines the principles that he lives and works by to create massive amounts of success in his life and business. And now, he’s become an author for the second time with his new book The Changing World Order: Why Nations Succeed and Fail. This new book explores the economic turbulence that has defined the past as well as explains why the future will be radically different. It’s a fascinating read — I recommend picking up a copy!
When Ray started out in his entrepreneurial career in 1975, he didn’t have much besides a two-bedroom apartment in New York and an idea. But now, 40 years later, Bridgewater Associates is the largest hedge fund in the world!
But despite building one of the most successful private companies ever, Ray doesn’t see himself as anything special. He fundamentally believes that the principles he’s learned are what set him apart and allow him to achieve such massive success. And now, at this stage of his life, he is ready and excited to pass along his wisdom to anyone willing to listen.
It was such a pleasure to dissect the world’s problems and opportunities with Ray. I loved diving deeper into why pain is the best teacher, how we can use our mindset to achieve great things, why we should always be willing to learn and admit when we’re wrong, and so much more!
Why Pain Is the Best Teacher
Ray Dalio has a unique perspective on pain and its ability to teach us. He doesn’t view pain as a totally negative thing, even though it’s never fun when you’re in the middle of it. Instead, he views pain as an opportunity to learn something. He’s dedicated to learning all the lessons he can from his struggles in life, and in doing so, I think he sets an incredible example for all of us.
“Pain is a heck of a teacher. By comparison … when you get pleasure, then you just keep doing what you’re doing, but it doesn’t teach you to change. … When you put your hand on a hot stove … [it] teaches you … about how to approach it differently. And also, pain teaches you about how reality works.” – Ray Dalio
Things don’t always work out perfectly. If you touch a hot stove, you’re going to burn your hand. As we go through life, there are a million opportunities for mistakes and tragedies. The best we can do is accept the bad things for what they are and take what lessons we can from them.
In our conversation, Ray told me about a time when he lost everything to a bad investment. It was a tough lesson, but it set the stage for all of his financial success:
“You know, it’s easy to be wrong in investing — that’s part of the game. … [After making the investment,] I thought we were going to go into an economic spiral, … and I couldn’t have been more wrong. … I lost money. I lost money for myself. I lost money for my clients. I [had] to let everybody in my company go. I was so broke. I had to borrow $4,000 from my dad. … It was a lot of pain. … And that was one of the best things that ever happened to me.” – Ray Dalio
You might be thinking, “How could that be the best thing that ever happened to him?!” But Ray was being honest. After making that bad investment, he learned a key lesson — how to be wrong without totally losing his confidence in himself, and he learned how to listen to other experts for their advice. Those lessons carried him far in his business, and today, he couldn’t be more grateful.
