🌼5 Principles For Financial Success By Billionaire Investor Ray Dalio
“Above all else, I want you to think for yourself.”
Ray Dalio is an American billionaire who founded Bridgewater Associates — the world’s largest hedge fund which manages over $160 billion.
It’s fair to say we can learn a great deal from Ray Dalio when it comes to achieving financial and professional success.
Fortunately, Ray Dalio has shared his most important lessons and principles for success in his best-selling book, Principles.
“If you’re not failing, you’re not pushing your limits, and if you’re not pushing your limits, you’re not maximizing your potential,” said Ray Dalio.
When you look at the most successful investors and business owners, you quickly see one thing they have in common:
They all failed a bunch of times — and they got better because of each failure.
School taught us that failure is bad. If you made a mistake, you’d get a bad grade. This wired our brains to avoid failure at all costs.
But failure is actually how we learn, grow, and evolve. As Ray Dalio said, “Mistakes are the path to progress.”
Failures contain valuable lessons and unique insights that make us smarter, better, and stronger. That’s why we should see each failure as a stepping stone to success.
As said in Principles:
“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.”
Instead of fearing failure, we should embrace it.
Fail, but fail forward.
Upgrade Your Habits
Habits can make or break your life. As Ray Dalio said in his book Principles:
“Choose your habits well. Habit is probably the most powerful tool in your brain’s toolbox.”
Your daily habits determine your level of success in your career, health, and finances.
So if you want better results in any area of your life, you’ll need to choose better daily habits.
When it comes to building wealth, here are some powerful habits to consider:
Working on a side-hustle
Learning high-income skills
Stop making impulsive purchases
Following a monthly expense budget
Asking $30,000 questions, not $3 questions
Drop Your Ego
“It is far more common for people to allow ego to stand in the way of learning,” said Ray Dalio.
For example, rather than reading a few investing books or hiring a financial planner, people with big egos think they are capable of picking winning stocks themselves.
More often than not, they end up losing a lot of their money.
The most successful people, however, aren’t afraid to admit they don’t know something. They aren’t afraid to ask for help.
And that’s precisely why they advance in their life and career.
“Smart people are the ones who ask the most thoughtful questions, as opposed to thinking they have all the answers.” — Ray Dalio
Drop your ego. It’s holding you back from reaching the next level.
“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,” said Ray Dalio.
Whether we’re talking about investing, career advice, or anything else…
… Don’t blindly follow the news.
… Don’t blindly follow the herd.
… Don’t blindly follow what your friends/colleagues say.
Learn to think for yourself.
This is especially true for financial markets, where everyone has an opinion/prediction on where the economy is going and which stocks are going to do well.
But as Ray Dalio said, “To make money in the markets, you have to think independently and be humble.”
Two Different Wealth Mindsets
Ray Dalio said, “If you are not aggressive, you are not going to make money, and if you are not defensive, you are not going to keep money.”
For example, building a business requires an ‘aggressive’ mindset. You’ll need to take risks, push yourself, and convince others of your products and services.
Negotiating a raise or applying for a job at a higher-paying company also requires an ‘aggressive’ mindset. You’ll need to have the courage to ask for what you believe you’re worth.
But keeping your money requires a different approach — a more defensive one.
To protect your wealth, you’re usually better off investing in proven assets such as index funds, bonds, and real estate instead of high-risk start-ups, small-cap stocks, or cryptocurrencies.
Where making money requires going on the offense and seeking risk, keeping your money requires going on the defense and mitigating risk.
CONTRIBUTED BY Jari Roomer
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