Principles

Dalio begins Principles by stating that he is at a stage in his life when he feels ready to pass on the knowledge he has gained, in the form of numerous principles. He presents his principles as a practical tool to guide decision making. Dalio urges readers to decide what they want to achieve, understand what is true about their situations, and then determine how to go about achieving their goals within the limits of what is true.

The Introduction to Principles gives an overview of some of Dalio’s key ideas. These include considering the input of other people’s ideas in order to make “believability-weighted decisions” and persistently operating by clearly laid-out principles to “[s]ystematize your decision making” (xv). Dalio also encourages readers to think of making decisions as a process of setting goals, failing, learning to improve, and setting greater goals.

Dalio first developed his principles while CEO of the hedge fund Bridgewater Associates. After realizing they worked well for his organization, he began distributing a list of principles to others and posted them on the company’s website. He set out to write Principles to explain his ideas in greater detail. He plans to follow up Principles, which focuses on life and work principles, with another book focused on economic and investment principles.