Principles: Life and Work (Part I.)

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Think for yourself to decide

1.) What do you want
2.) What is true
3.) What you should do to achive #1 in light of #2

While it isn’t necessarily a bad thing to use others’ principles, adopting principles without giving them much thought can expose you to the risk of acting in ways inconsistent with your goals and your nature.

How do I know I’m right ?

Life Principles

Embrace reality and deal with it

Dreams + Reality + Determination = A successful life

Pain + Reflection = Progress

Truth (accurate understanding of reality) is the essential foundation for any good outcome.

Be radically open-minded and radically transparent

Don’t let fears of what others think of you stand in your way

Embracing radical truth and radical transparency will bring more meaningful work and meaning relationships.

Embrace the fact that you don’t know everything you need to know.

My success has more to do with knowing how to deal with *not* knowing.

Consistently operate with principles that can be clearly explained.

In relationships with others, your principles and their principles will determine how you interact.
People who have shared values and principles get along. People who don’t will suffer.

To make money in the markets, one needs to be an independent thinker who bets against the consensus and is right.
That’s because the consensus view is baked into the price.
To be a successful entrepreneur, the same is true, which means being painfully wrong a fair amount.

Whenever I observe something in nature that I (or mankind) think is wrong, I assume that I’m wrong and try to figure out why what nature is doing makes sense.

Things (toys, bigger houses, money, status, etc.) don’t supply anywhere near the long-term satisfaction that getting better at something does.
It is the evolution, not the rewards, that matter.

The need to have meaningful work is connected to man’s innate desire to improve.

To gain strength one has to push one’s limits, which is painful.
Develop a reflexive reaction to psychic pain that causes you to reflect on it rather than avoid it,
Go to the pain rather than avoid it.
If you choose the healthy route, the pain will soon turn into pleasure.

Most people operate emotionally and in the moment; their lives are a series of undirected emotional experiences, going from one thing to the next.

You shouldn’t be upset if you find out that you’re bad at something – you should be happy that you found out, because knowing that and dealing with it will improve your chances of getting what you want.

When encountering your weaknesses you have four choices:
1. You can deny them (which is what most people do).
2. You can accept them and work at them in order to try to convert them into strengths (which might or might not work depending on your ability to change).
3. You can accept your weaknesses and find ways around them.
4. Or, you can change what you are going after.
Which solution you choose will be critically important to the direction of your life.
The worst path you can take is the first.

Believable parties are those who have repeatedly and successfully accomplished something – and have great explanations for how they did it.

1. Have clear goals.
2. Identify and don’t tolerate the problems that stand in the way of your achieving those goals.
3. Accurately diagnose the problems to get at their root causes.
4. Design plans that will get you around them.
5. Do what’s necessary to push these designs through to results.

Look at the patterns of your mistakes and identify at which step in the 5-Step Process you typically fail.

You will need to do all five steps well to be successful and you must do them one at a time and in order.
For example, when setting goals, just set goals. Don’t think about how you will achieve them or what you will do if something goes wrong.
When you are diagnosing problems, don’t think about how you will solve them – just diagnose them.
Blurring the steps interferes with uncovering the true problems.
The process is iterative: Doing each step thoroughly will provide you with the information you need to move on to the next step and do it well.

Goals

Prioritize: While you can have virtually anything you want, you can’t have everything you want.

Don’t confuse goals with desires.
A goal is something that you really need to achieve.
Desires are things that you want that can prevent you from reaching your goals.
Typically, desires are first-order consequences.

Great expectations create great capabilities.

If you limit your goals to what you know you can achieve, you are setting the bar way too low.

Problems

View painful problems as potential improvements that are screaming at you.

Each and every problem you encounter is an opportunity

Don’t mistake a cause of a problem with the real problem (bad sleeping is result of problem)

Distinguish big and small problems – make sureyou spend enough time with small problems to make sure they’re not symptoms of larger ones

Once you identify a problem, don’t tolerate it.

Diagnose

Distinguish proximate causes from root causes

You can only truly solve your problems by removing their root causes, and to do that, you must distinguish the symptoms from the disease

Design a plan

a. Go back before you go forward.
Replay the story of where you have been (or what you have done) that led up to where you are now, and then visualize what you and others must do in the future so you will reach your goals.

b. Think about your problem as a set of outcomes produced by a machine.
Practice higher-level thinking by looking down on your machine and thinking about how it can be changed to produce better outcomes.

Think of your plan as being like a movie script in that you visualize who will do what through time

Write down your plan for everyone to see and to measure your progress againts. All details about who needs to do what tasks and when. Remember, the tasks are what connect the narrative to your goals.

Push through to completion

Establish clear metrics to make certain that you are following your plan.

Someone other than you should be objectively measuring and reporting on your progress.

* Goal setting (such as determining what you want your life to be) requires you to be good at higher-level thinking like visualization and prioritization.
* Identifying and not tolerating problems requires you to be perceptive and good at synthesis and maintaining high standards
* Diagnosis requires you to be logical, able to see multiple possibilities, and willing to have hard conversations with others
* Designing requires visualization and practicality
* Doing what you set out to do requires self-discipline, good work habits, and a results orientation.

No one has all those qualities.
Have humility so you can get what you need from others!

Everyone has at least one big thing that stands in the way of their success; find yours and deal with it.

Write down what your one big thing is (identifying problems, designing solutions, pushing through to results) and why it exist !

You can either fix it or you can get the help of others to deal with it well. There are two paths to success:

1.) to have what you need yourself
2.) to get it from others

Understand your own and others’ mental maps and humility

having both open-mindedness and good mental mapsis powerful of all

Be radically Open-minded

The two biggest barriers to good decision making are your ego and your blind spot

Ego barrier

– subliminal defense mechanism that make it hard for you to accept your mistakes and weaknesses

ego coming from structures of your brain. It is impossible for you to understand what they they want and how they control you. They crave praise and respond to critism as an attack, even when the higher-level parts of the brain understand that conctructive critism is good for you. They make you defensive, especially when it comes to the subject of how good you are.

Blind spot barrier

areas where your way of thinking prevents you from seeing things accurately. Just as we all have different ranges for hearing pitch and seeing colors

Naturally, people can’t appreciate what they can’t see

When you point out someone’s psychological weakness, it’s generally about as well received as if pointed out a physical weakness.

Ego and blind spots are the fatal flaws that keep intelligent, hardworking people from living up to their potential.

Practice radial open-mindedness

radial open-mindedness is motivated by the genuine worry that you might not be seeing your choices optimally.

you must believe that you might not know the best possible path and recognize that your ability to deal well with “not knowing” is more important than whatever it is you do know

you must recognize that decision making is a two-step process:

First take in all the relevant information
then decide

You can’t put out without taking in.
Most people seem much more eager to put out (convey their thinking and be productive) than to take in (learn).
That’s a mistake even if one’s primary goal is to put out, because what one puts out won’t be good unless one takes in.

Remember that you are looking for best answer, not simply the best answer that you can come up with yourself.

You must recognize that the probability of you always having the best answer is small and that, even if you have it, you can’t be confident that you do before others test you.

Ask yourself: Am I seeing this just through my own eyes ? If so, then you should know that you’re terribly handicapped.

Art of thoughtful disagreement

When two people believe opposite things, chances are that one of them is wrong. It pays to find out if that someone is you.

Your goal is not to convince the other party that you are right – it is to find out which view is true and decide what to do about it

Approach the conversation in a way that conveys that you are just trying to understand. – use questions rather than make statements.

Remember, you are not arguing, you are openly exploring what is true.

If you are calm, collegial, and respectful you will do a lot better than if you are not.

Triangulate your view with believable people who are willing to disagree.

Recognize signs of closed-mindedness & open-mindedness people

Closed-minded people don’t want their ideas challenged. They are typically frustrated that they can’t get the other person to agree with them instead of curious as to why the other person disagrees.
Open-minded people are more curious about why there is disagreement.
Closed-minded people are more likely to make statements than ask questions.
Open-minded people genuinely believe they could be wrong.
Open-minded people are always more interested in listening than in speaking.
Closed-minded people focus much more on being understood than on understanding others.
Open-minded people always feel compelled to see things through others’ eyes
Closed-minded people say things like “I could be wrong..but here’s my opinion”
Open-minded people know when to make statement and when to ask questions.
Closed-minded people block others from speaking.
Open-minded people are always more interested in listening than in speaking

You will find out that you want to surround yourself with open-minded people

How you can become open-minded

Use feelings of anger/frustration as cues to calm down, slow down, and approach the subject at hand thoughtfully.

Record the circumstances in which you’ve consistently made bad decisions because you failed to see what others saw.
Write a list, tack it up on the wall, and stare at it. If ever you find yourself about to make a big decision in one of these areas, consult others.

If a number of different believable people say you are doing something wrong and you are the only one who doesn’t see it that way, assume that you are probably biased!

Meditate ( Transcendental Meditation )

Be evidence-based:
Most people do not look thoughtfully at the facts and draw their conclusions by objectively weighing the evidence.
Instead, they make their decisions based on what their deep-seated subconscious mind wants and then they filter the evidence to make it consistent with those desires.

Can you point to clear facts (i.e., facts believable people wouldn’t dispute) leading to your view? If not, chances are you’re not being evidence-based.

Use evidence-based decision-making tools.
A decision-making computer that gives you logically derived instructions.

There are no greater battles than those between feeling and thinking.

It is so important to reconcile what you get from your subconscious with what you get from your conscious.

If you stick with a behavior for approximately eighteen months, you will build a strong tendency to stick to it nearly forever.

Understand That People Are Wired Very Differently

we all expierence reality in different ways

all brains works in different ways which could lead to communacation problem

different ways of thinking lead to poor communication

“While I used to get angry and frustrated at people becaouse of the choices the made, I came to realize that they weren’t intentionally acting in a way that seemed counterproductive; they were just living out things as they saw them, based on how their brains worked. I also realized that as off-base as they seemed to me, they saw me the same way. The only sensible way of behaving with each other was to look down upon ourselves with mutual understanding so we could make objective sense of things. Not only did this make our disagreements less frustrating, it also allowed us to maxime our effectiveness”.

“Everyone is like a LEGO set of attributes, with each piece reflecting the working of a different part of their brain. All these pieces come together to determine what each person is like, and if you know what a person is like, you will have a pretty good idea of what you can expect from them”.

The brain is even more complex than we can imagine

When we are born our brains are preprogrammed with learing accumulated over hundreds of millions of years (while many people have an instinctual fear of snakes, no one has an instinctual fear of flowers)

Understanding of great brain battles

Many people only see the conscious mind and aren’t aware of the benefits of connecting it to the subconscious

Realize that the conscious mind is in a battle with the subconscious mind !

Be aware of your subconscious-of how it can both harm you and help you, and how by consciously reflecting on what comes out of it, perhaps with the help of others, you can become happier and more effective

Know that the most constant struggle is between feeling and thinking !

There are no breater battles between Feelings (most importantly controlled by our amygdala, which operates subconsciously) and our rational thinking (most importantly controlled by our prefrontal cortex, which operates consciously).

Amygdala is one of the most powerful parts of your brain

Amygdala controls your behavior.

When something upsets you – and that something could be sound, a sight, or just a gut feeling – the amygdala sends notice to our bodies to prepare to fight or flee: the heartbeat speeds up, the blood pressure rises, and breathing quickens. During an argument, you will often notice a physical response similar to how you react to fear (for instance, rapid heartbeat and tensing muscles). Knowing how these hijacking work, you know that if you allow yourself to react spontaneously, you will be prone to overreact. You can also comfort yourself with the knowledge that whatever psychological pain you are experiencing will go away before very long.

The biggest difference between people who guide their own personal evolution and achive their goals and those who don’t is that those who make progress reflect on what causes their amygdala hijacking.

Choose your habits well

Habit is probably the most powerful tool in your brain’s toolbox. It is driven by golf-ball-sized lump of tissue called the basal ganglia at the base of the cerebrum.

If you do just about anything frequently enough over time, you will form a habit that will control you. Good habits are those that get you do what your “upper-level you” wants and stand in the way of your getting what your “upper-level you” wants.

If you stick with a behavior for approximately eighteen months, you will build a strong tendency to stick to it nearly forever.

Write down your three most harmful habits !! Pick one now and commit to break it.

The most valuable habit I’ve acquired is using pain to trigger quality reflections.

Train your “lower-level you” with kindeness and persistence to build the right habits. I used to think that the upper-level you needed to fight with the lower-level you to gain control, but over time I have learned that it is more effective to train that subconscious, emotional you the same way you would teach a child to behave the way you would like him or her to behave – with loving kindness and persistence so that the right habits are acquired.

Understand the differences between right-brained and left-brained thinking

1.) Left hemisphere reasons sequentially, analyzes details, and excels at linear analysis. “Left-brained” or “linear” thinkers who are analytically strong are often called “bright”
2.) Right hemisphere thinks across categories, recognizes themes, and synthesizes the big picture. “Right-brained” or “lateral” thinkers with more street smarts are often called “smart”.

“I’ve found that it’s often most effective to acknowledge one’s weaknesses and create explicit guardrails againts them. This is typically a faster and higher-probability path to success”.

Find ou what you and others are like

Because of the biases with which we are wired, our self-assessments (and our assessments of others) tend to be highly inaccurate.

“If I had to choose between just the assessments or just traditional job interviews to get at what people are like, I would choose the assessments”.

The four main assessments we use are

Myers-Briggs Type Indicator (MBTI)
Workplace Personality Inventory
Team Dimensions Profile
Stratified Systems Theory (seeing how people navigate levels and which levels they naturally go to)

Dalio’s own attributes and terminologies

Introversion vs. Extroverison

Introverts focus on the inner world and get their energy from ideas, memories, and expierences while extroverts are externally focused and get their energy from being with people. Friend who loves ” talk out” ideas, he or she is likely an extrovert. Introverts will usually find such conversation painful, preffering to think privately and share only after they ahave worked things out on their own. It is important to help each communicate in the way that they feel most comfortable. For example, introverts often prefer communicating in writing rather than speaking in group settings and tend to be less open with critical thoughts.

Intuiting vs. Sensing

Some people see big pictures (forest) and others see details (trees). You can getan idea of people’s preferences by observing what they focus on. For example, when reading, a sensing person who focuses on details can be thrown off by typos such as “there” insted of “their”, while intuitive thinkers won’t even notice the mistake. Because the intuitive thinker’s attention is focused on the context first and the details second.

Thinking vs. Feeling

Some people make decisions based on logical analysis of objective facts, considering all the known, provable factors important to a given situation and using logic to determine the best course of action. This approach is indicator of a preference for thinking and is how you would hope your doctor thinks when he makes a diagnosis. Other people – who prefer feeling – focus on harmony between people. They are better suited to roles that require lots of empathy, interpersonal contact, and relationship building, for example HR and customer service.

Planning vs Perceiving

Some people like to live in planned, orderly way and others prefer flexibility and spontaneity. Planners like to focus on a plan and stick with it, while perceivers are prone to focus on what’s happening around them and adapt to it. Perceivers work from the outside in, they see things happening and work backwards to understand the cause and how to respond; they also see many possibilities that they compare and choose from-often so many that they are confused by them. In contrast, planners work from inside out, first figuring out what they want to achive and then how things should unfold. Planners and perceivers have trouble appreciating each other.Perceivers see new things and change direction often. This is discomforting to planners, who weigh precedent much more heavily in their decision making, and assume if it was done in a certain way before, it should be done in the same way again. Similarly, planners can discomfort perceivers by being seemingly rigid and slow to adopt.

Creators vs. Refiners vs. Advancers vs. Executors vs. Flexors

Using “Team Dimensions Profile” to connect people with their preffered role.

Creators generate new ideas and original concepts. They prefer unstructured and abstract activities and thrive on innovation and unconventional practices.

Advancers communicate these new ideas and carry them forward. They relish feelings and relationships and manage the human factors. They are excellent at generating enthusiasm for work.

Refiners challenge ideas. They analyze projects for flaws, then refine them with a focus on objectivity and analysis. They love facts and theories and working with a systematic approach.

Executors can also be thought of as Implementers. They ensure that important activities and carried out and goals accomplished; they are focused on details and the bottom line.

Flexors are a combination of all four types. They can adapt their styles to fit certain needs and are able to look at a problem from a variety of perspectives.

Your greatest challange will be having your thoughtful higher-level you manage your emotional lower-level you. The best way to do that is to consciously develop habits that will make doing the things that are good for you habitual.

Some decisions you should make yourself and some you should delegate to someone more believable. Using self-knowledge to know which are which is the key to success – no matter what it is you are trying to do.

How to make Decisions Effectively

“I’ve come to understand is that most of the processes that go into everyday decision making are subconscious and more complex than is widely understood.

Recognize that:

1.) the biggest threat to good decision making is harmful emotions
2.) decision making is a two-step process (first learning and then deciding).

Learning must come before deciding. It pays of to be radically open-minded and seek out believable others as you do your learning. Remind yourself that it’s never harmful to at least hear an opposing point of view.

Deciding is the process of choosing which knowledge should be used – both, the facts of this particular “what is” and your general understanding of the cause-effect machinery that undelies it -and then weighing them to determine a course of action, the “what to do about it”. This involves playing different scenarios trough time to visualize how to get an outcome consistent with what you want. To do this well, you need to weigh first-order consequences against second- and third-order consequeces, and base your decision not just on near-term results but on results over time. Never seize on the first available option, no matter how good it seems, before you’ve asked questions and explored. To prevent ,yself from falling into this trap, I used to literally ask myself questions:

Am I learning ?
Have I learned enough yet that it’s time for deciding ?

Learning well

“For me, getting an accurate picture of reality ultimately comes down to two things: being able to synthesize accurately and knowing how to navigate levels. Synthesis is the process of converting a lot of data into an accurate picture. The quality of your synthesis will determine the quality of your decision making. This is why it always pays to triangulate your chances of having a good synthesis, even if you feel like you’ve already done it yourself. No sensible person should reject a believable person’s views without great fear of being wrong. To synthesize well, you must:

1.) Synthesize the situation at hand
2.) Synthesize the situation through time
3.) Navigate levels effectively

Synthesize the situation at hand

To be effective, you need to be able to tell which dots (things) are important and which dots are not.

Some people have detail anxiety worrying about unimportant things.

Sometimes little things can be important !

Remember:

One of the most important decisions you can make is who you ask questions of. Make sure they are fully imformed and believable. Listening uninformed people is worse than having no answers at all.

Don’t believe everything you hear. Don’t mistake opinions fo facts.

Everything looks bigger up close. What’s happening today seems like a much bigger deal than it will appear in retrospect. That’s why it helps to step back to gain perspective and sometimes defer a decision until some time passes.

New is overvalued relative to great. It’s usually smarter to choose the great over the new.

Synthesize the situation through time

To see how dots connect through time you must collect, analyze, and sort different types of information, which isn’t easy. You can categorize dots by quality and type.

Keep in mind both the rates of change and the levels of things, and the relationships between them.

Be an imperfectionist.
The marginal gains of studying even the important things past a certain point are limited.

Navigate levels effectively

Reality exists at different levels and each of them gives you different but valuable perspectives. It’s important to keep all of them in mind as you synthesize and make decisions, and to know how to navigate between them.

We are constantly seeing things at different levels and navigating between them, whether we know it or not, whether we do it well or not, and whether our objects are physical things, ideas, or goals. For example, you can navigate levels to move from your values to what you do to realize them on a day-to-day basis. This is what that looks like in outline:

The High Level Big Picture: I want meaningful work that’s full of learning.

Subordinate Concept: I want to be a doctor.

Sub Point: I need to go to medical school.

Sub-Sub Point: I need to get good grades in the sciences.

Sub-Sub-Sub Point: I nedd to stay home tonight and study.

To observe how well you do this in your life, pay attention to conversations. We tend to move between levels when we talk.

Remember that decisions need to be made at the appropriate level, but they should also be consistent across levels.

IYou need to constantly connect and reconile the data you’re gathering at different levels in order to draw a complete picture of what’s going on. To do it well, it’s necessary to:

1.) Remember that multiple levels exist for all subjects
2.) Be aware on what level you’re examining a given subject
3.) Consciously navigate levels rather than see subjects as undifferentiated piles of facts that can be browsed randomly.
4.) Diagram the flow of your thought processes using the outline template

Decide Well

Using decision-making logic to produce the best long-term outcomes has become its own science-one that employs probabilities and statistics, game theory, and other tools. The fundamentals of effective decision making are relatively simple and timeless-in fact they are genetically encoded in our brains to varying degrees. Watch animals in the wild and you will see that they instinctively make expected value calculations to optimize the energy they expand to find food.

There are two broad approaches to decision making:

Evidence/logic-based (higher-level brain)
Subconscious/emotion-based (lower-level brain)

Be wary of relying on anything else.

“Until you make the unconscious conscious, it will direct your life and you will call it fate”. ( Carl Jung )

Make your decisions as expected value calculations.

Think of every decision as a bet with a probability and a reward for being right and a probability and a penalty for being wrong.

Raising the probability of being right is valuable no matter what your probability of being right already is.

You can almost always improve your odds of being right by doing things that will give you more information

Knowing when not to bet is as important as knowing what bets are probably worth making

You can significantly improve your track record if you only make the bets that you are most confident will pay off.

The best choices are the ones that have more pros than cons, not those that don’t have any cons at all.

Prioritize by weighing the value of additional information against the cost of not deciding.

All of your “must-dos” must be above the bar before you do you do your “like-to-dos”. Seperate your “must-dos” from your “like-to-dos” and don’t mistakenly slip any “like-to-dos” onto the first list.

Chances are you won’t have time to deal with the unimportant things, which is better than not having time to deal with the important things.

Don’t mistake possibilities for probabilities. Anything is possible. It’s probabilities that matter. People who can accurately sort probabilities from possibilities are generally strong at “practical thinking”.

Shortcuts for becoming a Great Decision Maker

Great decision makers don’t remember all of these steps in a rote way and carry them out mechanically, yet they do follow them. That’s because through time and experience they’ve learned to do most of them reflexively, just as a baseball player catches a fly ball without thinking about how he’s going to do it. But there are a couple of things that they do carry out consciously and you should do them too.

Simplify !

Get rid of irrelevant details so that the essential things and the relationships between them stand out. “Any damn fool can make it complex. It takes a genius to make it simple”.

Use Principles

Using principles is a way of both simplifying and improving your decision making. It will allow you to massively reduce the number of decisions you have to make and will lead you to make much better ones. The Key to doing this well is to:

1.) Slow down your thinking so you can note the criteria you are using to make your decision.
2.) Write the criteria down as a principle
3.) Think about those criteria when you have an outcome to assess, and refine them before the next “one of those” comes along.

Matching “one of those” up with the appropriate principles will become like playing a game. You can use your own principles, or you can use others; you just want to use the best ones possible well. If you think that way constantly, you will become an excellent principled thinker.

Believability weight your decision making

Triangulating with highly believable people who are willing to have thoughtful disagreements has never failed to enhace my learining and sharpen the quality of my decision making. It typically leads me to make better decisions than I could have otherwise and it typically provides me with thrilling learning. To do it well, be sure to avoid the common perils of:

1.) valuing your own believability more than is logical

2.) Not distinguishing between who is more or less credible

In case of a disagreement with others, start by seeing if you can agree on the principles that should be used to make that decision.

Convert your principles into algorithms and have the computer make decisions alongside you

In order to have the best life possible, you have to:

1) Know what the best decision are and

2) Have the courage to make them

To acquire principles that work, it’s essential that you embrace reality and deal with it well. Don’t fall into the common trap of wishing that reality worked differently than it does or that your own realities were different. Instead, embrace your realities and deal with them effectively. After all, making the most of your circumstances is what life is all about. This includes being transparent with your thoughts and open-mindedly accepting the feedback of others. Doing so will dramatically increase your learning.

Along your journey you will inevitably experience painful failures. It is important to realize that they can either be the impetus that fuels your personal evolution or they can ruin you, depending on how you react to them.