Principles
Key Information
- Author: Ray Dalio
- Published: 2017
- Topics: Leadership, Management, Systems, Decision Making
- View on Amazon →
Core Message
Success comes from understanding and working with reality's fundamental principles, particularly in recognizing and dealing with second and third-order consequences of decisions.
Key Themes
"People who overweigh the first-order consequences of their decisions and ignore the effects of second- and subsequent-order consequences rarely reach their goals. This is because first-order consequences often have opposite desirabilities from second-order consequences."
The importance of looking beyond immediate effects to understand the full impact of decisions.
"The biggest mistake most people make is to not see themselves and others objectively."
The critical importance of radical honesty and self-awareness in decision making.
"Choosing a goal often means rejecting some things you want in order to get other things that you want or need even more."
Success requires clear prioritization and the willingness to make hard trade-offs.
Key Insights
- Don't confuse what you wish were true with what is really true
- Don't worry about looking good—worry about achieving your goals
- Don't overweight first-order consequences relative to second and third-order ones
- Don't let pain stand in the way of progress
- Don't blame bad outcomes on anyone else