Humility, Creativity, and Building an Idea Meritocracy | Ray Dalio

Summary

Podcast Summary: Humility, Creativity, and Building an Idea Meritocracy | Ray Dalio

Title: The GaryVee Audio Experience
Host/Author: Gary Vaynerchuk
Episode: Humility, Creativity, and Building an Idea Meritocracy | Ray Dalio
Release Date: January 13, 2025

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Introduction

In Episode 275 of The GaryVee Audio Experience, host Gary Vaynerchuk engages in a profound conversation with Ray Dalio, the founder of Bridgewater Associates, the world's largest hedge fund. The discussion delves into Dalio's principles for success, the concept of an idea meritocracy, and the critical roles of humility, creativity, and self-awareness in personal and professional growth.

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The Launch of Ray Dalio's Book

Gary Vaynerchuk expresses his enthusiasm for Dalio's latest book, highlighting its impact and the positive reactions it has garnered:

Gary Vaynerchuk [01:00]: "The reactions to the concept of the principles and the book itself has been overwhelming. I feel like you had great ambition for this project when I met you. How has it been going?"

Ray Dalio responds by emphasizing the positive feedback and the book’s objective to help others achieve success by sharing his life principles:

Ray Dalio [02:25]: "My goal was to help other people be successful. And the reactions have been thanks and appreciation. So I feel great about it."

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The Concept of Principles and Idea Meritocracy

Dalio introduces his foundational idea that principles guide decision-making processes, leading to an "idea meritocracy" where the best ideas prevail.

Ray Dalio [03:29]: "We built an idea meritocracy, in other words, where the best ideas would win out."

He explains that principles are systematic guidelines for handling recurring situations, enhancing pattern recognition and decision-making:

Ray Dalio [05:06]: "Everything happens over and over again and you have a principle. It's how to deal with a certain thing that happens over and over again, effectively."

Gary Vaynerchuk connects this to his own experiences, drawing parallels between their approaches:

Gary Vaynerchuk [08:27]: "Gary's got his way of succeeding."

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The Importance of Self-Awareness and Empathy

The conversation shifts to the significance of self-awareness and empathy in extracting and applying personal principles.

Ray Dalio [09:36]: "Self awareness is a big thing."

Dalio discusses how connecting emotions with intellect fosters greater self-awareness, a trait he cultivates through practices like meditation:

Ray Dalio [09:42]: "What helps me get my awareness is the connection of my emotions with my intellect."

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Ray Dalio's Professional Journey

Dalio shares his journey from a young investor to founding Bridgewater Associates, emphasizing the role of independent thinking and humility in his success.

Ray Dalio [17:15]: "Betting against the consensus and being right is what you need to do."

He recounts the pivotal moment in 1982 when his independent analysis led to a significant market miscalculation, teaching him invaluable lessons about humility and resilience.

Ray Dalio [19:37]: "This was the exact bottom in the economy, in the stock market. I was wrong. That didn't pass through, okay? Painfully wrong."

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Overcoming Failures and Learning from Mistakes

Dalio highlights how failures are instrumental in developing principles that guide future decisions, transforming pain into progress.

Ray Dalio [24:35]: "Pain plus reflection equals progress."

He contrasts the value of mistakes over successes, illustrating how failures provide deeper insights and opportunities for growth.

Ray Dalio [22:23]: "Successes are nowhere near as valuable as mistakes because you're doing something right. And it doesn't give you the kick, the motivation."

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Building an Idea Meritocracy at Bridgewater Associates

Dalio elaborates on how he implemented an idea meritocracy within Bridgewater, fostering an environment of radical truthfulness and transparency to ensure the best ideas are heard and executed.

Ray Dalio [26:51]: "An idea meritocracy in which the goals are meaningful work and meaningful relationships."

He explains the principles of radical truthfulness and transparency, ensuring that all team members can openly share and debate ideas without fear of manipulation.

Ray Dalio [27:23]: "Radical truthfulness means that anybody can say what they really mean. And the transparency means that you can't manipulate the truth."

Dalio introduces the concept of believability-weighted decision making, where decisions are influenced by the credibility and expertise of individuals, rather than hierarchy.

Ray Dalio [30:11]: "Believability weighted decision making... it's a weighted average vote based on believability."

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Responding to Audience Questions

During the episode, callers interact with Dalio and Gary, bringing additional perspectives and questions that enrich the conversation.

Caller: Tim Ferriss

Tim Ferriss engages with Dalio on managing mental health challenges, particularly depression and bipolar disorder. Dalio draws from personal experiences, offering practical advice on balancing creativity with emotional stability.

Ray Dalio [44:57]: "My son who's bipolar... meditation helped him keep centered. And most importantly, don't do substance abuse in any kind of way."

Tim Ferriss [48:36]: "I agree with you. These are people who are the most creative people in the world. So there's a big gift element, but it has to be managed."

Caller: Christy and Brian

Christy and Brian share their experiences reading Dalio's book, seeking Dalio's favorite principles. Dalio emphasizes the importance of embracing reality and maintaining humility in decision-making.

Ray Dalio [54:45]: "Knowing how to deal with my not knowing. Embrace reality and deal with it."

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Practical Applications and Strategies

Gary Vaynerchuk introduces his "$80 Principle," a strategy for audience engagement through consistent, value-driven interactions on social media platforms. Dalio appreciates the practicality of such approaches, recognizing their alignment with meritocratic principles.

Gary Vaynerchuk [57:03]: "If you have no audience and nobody knows who you are, you can produce content, but you can also become part of the community."

Ray Dalio [58:14]: "But you see, you know those things. That's why I'm saying, like, if you could do the following, I'm just gonna give you advice."

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Conclusion

The episode wraps up with Dalio's affirmation of the shared philosophies between him and Gary Vaynerchuk, highlighting the universal applicability of principles, humility, and independent thinking in achieving success.

Ray Dalio [61:34]: "Can you separate yourself from your opinions so that you open yourself up to the entire possibility of different points of view to get the best ones for you?"

Gary expresses his gratitude and admiration for Dalio, reinforcing the mutual respect and shared vision for fostering meaningful work and relationships through principled decision-making.

Gary Vaynerchuk [61:50]: "Love it. Ray. Again, thank you."

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Notable Quotes

• Ray Dalio [03:29]: "We built an idea meritocracy, in other words, where the best ideas would win out."
• Ray Dalio [22:23]: "Successes are nowhere near as valuable as mistakes because you're doing something right."
• Ray Dalio [24:35]: "Pain plus reflection equals progress."
• Ray Dalio [27:23]: "Radical truthfulness means that anybody can say what they really mean."
• Ray Dalio [54:45]: "Knowing how to deal with my not knowing. Embrace reality and deal with it."
• Ray Dalio [61:34]: "Can you separate yourself from your opinions so that you open yourself up to the entire possibility of different points of view to get the best ones for you?"

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Key Takeaways

1. Principles as Guiding Frameworks: Developing and adhering to personal and organizational principles enhances decision-making and fosters a culture where the best ideas prevail.
2. Idea Meritocracy: Creating an environment of radical truthfulness and transparency ensures that ideas are evaluated on their merit, leading to superior collective outcomes.
3. Humility and Independent Thinking: Embracing humility and cultivating the ability to think independently are crucial for overcoming failures and achieving long-term success.
4. Self-Awareness and Empathy: Understanding oneself and connecting emotionally with intellect is essential for personal growth and effective collaboration.
5. Learning from Mistakes: Viewing mistakes as opportunities for learning and principle development transforms pain into progress and fuels continuous improvement.

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This episode offers invaluable insights into Ray Dalio's philosophy on success, the importance of principled living, and the implementation of an idea meritocracy within organizations. For listeners seeking to enhance their personal and professional lives, the conversation between Gary Vaynerchuk and Ray Dalio serves as a compelling blueprint for fostering growth through humility, creativity, and structured decision-making.

Transcript

[Gary Vaynerchuk]

On this episode, living legend Ray Dalio stops by. Hey, everybody, this is Gary Vay ner Chuk. And this is episode 275 of the AskGaryVee Show. And I'm super fired up about this episode. And let me explain to you why, knowing my audience, I have a feeling a lot of you are about to be exposed to an extremely interesting gentleman. More importantly, I think he's gonna have disproportionate impact on a sector of you, because I do think it's coming from an angle that I would argue has very similar seeds to, I think, what makes me successful but comes from a completely different angle. And I think that's exactly how you tend to get results. And so, Ray Dalio, please, first and foremost, allow me to thank you for being on the show.

[Ray Dalio]

Thank you for having me. I'm thrilled to be here.

[Gary Vaynerchuk]

Number one, I'm impressed. And I want to make sure everybody checks this out. You are hustling, which excites me. You are showing up in all sectors on all sorts of places I respect Tim Ferriss podcast, other places of that nature. And then when I look at Bill Gates and Tony Robbins and Arianna Huffington and Jamie Dimon and Mehmet Oz and Reed Hastings, the Rolodex of quotes for your new book, which, by the way, I just told Ray something very important. I do not read. As all of you know, when I make the joke that I've written more books than I've read, I'm getting dangerously close. But the few times I do read is when I'm on vacation between December 20th and the 24th when I go off the grid and I will be reading this book. So I'm excited now. So you guys know that happens because my team's working with him and the vibe that Lindsey and Hannah and the rest of the team, Molly, talk about. This project continues to build on the fascination that I had when we first met. But the book's buzz and more importantly, the reaction. Cause I like to watch people. I don't consume content, but I consume people's reactions. The reactions to the concept of the principles and the book itself has been overwhelming. I feel like you had great ambition for this project when I met you. How has it been going? Before I get into your origin story, how do you feel about the launch of this incredibly important project?

[Ray Dalio]

Well, I judge it by the thank yous I get, you know, and on social media, I'm just getting massive amounts all the time. And I mean, my goal was to convey to people things that worked in my life. I was very lucky enough. And I don't know, I learned by a lot of mistakes, A lot of things that made me successful. And I wrote those down year by year, all these principles, every time I would make a decision. So there was a big bunch of those, and I shared them with a lot of people over a period of time throughout three and a half million people at one point on social media, downloaded them and got lots of thanks. My goal was to help other people be successful. And the reactions have been thanks and appreciation. So I feel great about it.

[Gary Vaynerchuk]

So what has been the biggest surprise to the reaction of the book from whether that is the masses saying X or somebody that you talked about this with privately over the last 10 years said why, or somebody stopped you in the street, or this one quote that you never expected, like as a net score. What has been the biggest surprise to you on the reaction of the book?

[Ray Dalio]

The getting the concepts. Okay, so let me just explain the concept. Every time I made a decision, I would write down the criteria for making those decisions. So this is a bunch of principles that I've acquired over a period of time. Those people then started to learn the benefit of that. And then it caught on for me in my life, because if I knew those principles and I could communicate with those principles, then I knew that I could communicate with you, if I could have partnership with you, any relationship that I had, whether it's a family relationship or whether it's a business. And then I could build an idea, meritocracy, in other words, where the best ideas would win out. So there was a process of building these principles, writing them down, making them clear, and then taking those things and we built them into algorithms so that we could have the computers make decisions. That whole notion of how to be operating differently with principles, not just with decisions that I didn't know that I would be able to convey. And now people are starting to think in terms of principles. And I think it has a big effect, like, what are our principles of our country? Do we have common principles? Do we have different principles? So I was very surprised or, or very pleasantly surprised that people are understanding the linkages about how that systematic decision making principle, decision making works.

[Gary Vaynerchuk]

Were you worried that it took high intellect to synthesize it? And so when you say surprised, pleasantly surprised, you were worried that you wouldn't be able to articulate the simplicity and then thus the masses wouldn't be able to consume it. And that's been exciting for you, I guess.

[Ray Dalio]

And I'm not Saying, I'd say it in the following way, please. I think that people are so caught up in making decisions, but they haven't thought about principles. Okay. Now, it's a different way of thinking when you start to realize that everything happens over and over again and you have a principle. Let me be clear what I mean by principles. Right. It's how to deal with a certain thing that happens over and over again, effectively. You can have principles for skiing, you could have principles for parenting.

[Gary Vaynerchuk]

That's right.

[Ray Dalio]

You could have principles for investing.

[Gary Vaynerchuk]

That's right.

[Ray Dalio]

Whatever that is. And the issue of being able to understand, it's another one of those that you start to see something and you say, ah, it's that species of thing.

[Gary Vaynerchuk]

Pattern recognition.

[Ray Dalio]

Yes. And connecting it to the underlying principles. Because then if you realize that there is a limited number of species of things that can happen to you and they happen over and over again, you can kind of go to that species. You say, this is that species of thing. How do I deal with that thing? And. And by being able to have that principle that is very clear to you and make the connection between that thing and your decision, and you do it over and you refine it over a period of time and you communicate it. It's a very, very powerful way of operating. And because I think we're in a different world now. We were in a world where principles that bound us together typically came from religion, in other words, a Judeo Christian background. And we say, what are the principles that bind us together as religions then fade in our path? In our history, religion has become less important.

[Gary Vaynerchuk]

Yes.

[Ray Dalio]

Where do we learn principles? How do we get principles? So we're now in an environment, I would say, which is a low point in terms of principles. If you ask them, what principles do you have? And if you were to compare those, one man's with another, another.

[Gary Vaynerchuk]

I understand.

[Ray Dalio]

So how do we. So the notion of being able to move to principled thinking, to have people articulate it and then to compare it, and then to evolve. I think that we're going to evolve so that we, as a group of people could say, what are our principles? And then do we. Are we bound together by those principles?

[Gary Vaynerchuk]

Do you. I apologize. Do you believe things like the Ten Commandments or the Bill of Rights or principles?

[Ray Dalio]

Sure.

[Gary Vaynerchuk]

Do you believe that there is vulnerability in the interpretation of.

[Ray Dalio]

I think that there is the absence of. In other words, when we could say the interpretation. I don't think most people are sitting there and going off the checklist of the ten commandments or the Bill of Rights and then saying that I think they're lost. Right?

[Gary Vaynerchuk]

Yeah.

[Ray Dalio]

And I think that religion is that element of religion. And by the way, I don't think that's a particular problem. I think that each individual has now got to determine his own principles.

[Gary Vaynerchuk]

I agree.

[Ray Dalio]

And so that's the notion that I'm very excited about. Because when they come along and they're saying now Gary writes down, what is Gary's principles?

[Gary Vaynerchuk]

My principle something I think as you're talking, I'm like, right. It's like my belief that why not treat life like a marathon? Especially in the financial sector, everybody treats it like a sprint. If you're gonna be around marathon characteristics are better. Why?

[Ray Dalio]

Right. Well, Gary's got his way of succeeding.

[Gary Vaynerchuk]

Yes.

[Ray Dalio]

Okay. So if you're a successful person, there were certain things that you did to make decisions. And if you go slowly and you write that down, that, and you say now when I'm in this situation, I make that decision that way and you collect those principles and you get them. Principles are the formula for success. And by getting people to think about what are their formulas for success, get them from wherever you can. The these happen to be mine. I was lucky in that I'm, you know, like yourself. I started out with nothing. Right. And then I stumbled my way along and then over a period of time I became something more than nothing. And so I learned these things. And I'm at a stage in my life where I wanted to pass those along. As long as I can continue to get other people to think about what they're. What are their recipes for success, then that's what it's all about.

[Gary Vaynerchuk]

How much does self awareness and empathy play into this? In the ability to extract out of you your principles?

[Ray Dalio]

Well, I think in each person's case, self awareness is a big thing. There's two parts of our brain.

[Gary Vaynerchuk]

Do you feel you're extremely self aware?

[Ray Dalio]

I try to be. I do certain things.

[Gary Vaynerchuk]

One man's opinion on yourself.

[Ray Dalio]

Yeah. Let me phrase it the following way. What helps me get my awareness is the connection of my emotions with my intellect. In other words, when we say aware there's a subconscious part of our brain, I say that there's two you's right. There's a conscious part of your brain that's the thinking you and then there's the subconscious that you don't know. And by being able to bring those two things and make the connection between them. So if you feel something and it's coming up and you start to articulate it, then you're connecting it with its intellect. If it triangulates, in other words, if the underlying psychology, emotion, is in sync with your intellect, then you move forward. What's helped me a lot personally is meditation. Transcendental meditation.

[Gary Vaynerchuk]

When did that start happening?

[Ray Dalio]

In 1969. Okay, so. Okay. A long time ago.

[Gary Vaynerchuk]

Yeah. January, by the way, real quick, fun fact. January 12, 1969, is the greatest day in American history. Do you know why?

[Ray Dalio]

No.

[Gary Vaynerchuk]

It was the day the New York jets won the Super Bowl. Just a little fun fact for everybody watching at home. So 1969.

[Ray Dalio]

1969. Beatles were.

[Gary Vaynerchuk]

I know where you're going.

[Ray Dalio]

They came back.

[Gary Vaynerchuk]

I have a funny feeling of how you stumbled into meditation anyway.

[Ray Dalio]

I stumbled into meditation and probably with that funny feeling.

[Gary Vaynerchuk]

Yeah. But it's really interesting. And you started and continued your whole career.

[Ray Dalio]

I've always meditated and it's changed my life.

[Gary Vaynerchuk]

Can you tell me how often, when. What is the pattern within it?

[Ray Dalio]

Well, typically twice a day, 20 minutes each time. And. Let me describe it.

[Gary Vaynerchuk]

Yeah, I want to hear you describe it. Yeah.

[Ray Dalio]

I don't want to go slow because I want to make it clear that what happens is by. It's a very simple exercise that you repeat your mantra over and over again. That's a word that doesn't mean anything. And what it does is it takes you into your subconscious mind. You're not conscious, you're not unconscious. You're in your subconscious mind. It's a peacefulness. And in your subconscious mind, that's the part we're talking about, is the second you. Okay. It makes a connection between your conscious mind and your subconscious mind. And so that's where your creativity comes from. In other words, if you want to take a. If you want creativity, it's not like you muscle it in your conscious mind. It's like, take a hot shower and the ideas come to you, and you grab the ideas, they come up from your subconscious mind. And that connection also creates your creativity. So because creativity comes from there, so it gives you an equanimity. In other words, it's like a ninja. You can sit back, things come at you, and everything seems slower, more in control. And you're in constant control. So that equanimity.

[Gary Vaynerchuk]

I apologize, but I have to. I'm just impatient. Can somebody be in that state constantly?

[Ray Dalio]

No, you go into it and you come out of it, but you can feel the difference. In other words, I walk around knowing that when I feel one way and it's different from the other, and I can then say, okay, I want to go into the other. Because that gives me the equanimity and that equanimity and that creativity is power.

[Gary Vaynerchuk]

Can you go into it without the mantra 20 minute play?

[Ray Dalio]

I can almost slip into a kind of. Ah, it feels that way. So I can carry something with me. Me. But I'm not going into the same depth as that meditation.

[Gary Vaynerchuk]

I see. Because that part resonates with me tremendously. So it's interesting to see. So I think I can slip into that kind of zone quite a bit. And I actually try to stay in that zone at all times. I do think through pattern recognition and this conversation. It's how the things slow down. But it's interesting to hear you say deeper.

[Ray Dalio]

Have you tried meditating?

[Gary Vaynerchuk]

Not much.

[Ray Dalio]

Okay, we'll talk about this at some point. I would urge you. Okay. Because you're a little bit like me. I think you're a little hyper, right?

[Gary Vaynerchuk]

Yes.

[Ray Dalio]

Okay, I'm hyper. I've got a. I don't know whether it's ADD or whatever it is, but anyway, the ideas are all going through all of a sudden. Then when you can then go into this world and so on. It's unbelievable because it gives you that control over your mind. Like I'll tell you for every human being.

[Gary Vaynerchuk]

I apologize because I want to share this.

[Ray Dalio]

Yeah.

[Gary Vaynerchuk]

But I feel massively controlled in the chaos and speed.

[Ray Dalio]

Okay.

[Gary Vaynerchuk]

I'll tell you, I get more uncomfortable in the piece. Let me give you an example. I want music glaring at all, like I'm uncomfortable in quiet.

[Ray Dalio]

That's your problem.

[Gary Vaynerchuk]

Okay, I believe you. I believe you.

[Ray Dalio]

That's your problem. Because you're not letting that. You're not going into that subconscious mind. You're highly conscious. You know, when you sit down, you're there. You're going to be in a position where you're going to get restless because I know it happened to me. I love stuff. I love stimulation and so on. But when you go into this other experience that you don't know what it's like yet, you're going to find that all of a sudden you're going to get antsy. And that's signs that you're not in control.

[Gary Vaynerchuk]

I understand.

[Ray Dalio]

You're in a world of nothing. You're in a world of a lot of stuff.

[Gary Vaynerchuk]

I understand.

[Ray Dalio]

When you go into the void.

[Gary Vaynerchuk]

Yes.

[Ray Dalio]

Oh, it's something else. Okay. And that means you'll gain control.

[Gary Vaynerchuk]

I understand.

[Ray Dalio]

You don't have control of your mind.

[Gary Vaynerchuk]

I understand.

[Ray Dalio]

One doesn't have control of One's mind if one can't do that. Right.

[Gary Vaynerchuk]

I understand. I understand that. It's neat.

[Ray Dalio]

It's neat.

[Gary Vaynerchuk]

Yeah. Do you think it was January 12, 1969, when you started this? I think it might be, maybe. Right. I apologize. I really want this because I think people are completely fascinated. But I want to set this stage instead of going all the way back to the origin your professional life that, like, at a high level, I was aware of when we first met and others that are watching right now. But for the ones that don't, what is your professional career? From the beginning. From literally the beginning, first day you actually worked, what did you do?

[Ray Dalio]

Well, when I was 12, I caddied. So my. My. I'm an investor, Right. I'm. I'm running Successful investor, right? Yes. For those who don't know, I run Bridgewater Associates, which is the largest hedge fund in the world.

[Gary Vaynerchuk]

When did that start?

[Ray Dalio]

9. I started in 1975, but I started trading markets when I was 12, so. And I Real quick.

[Gary Vaynerchuk]

I apologize. You started it in 1975? Yeah, November 14th, 1975.

[Ray Dalio]

I don't know. Did the jets win then, too?

[Gary Vaynerchuk]

No, I was born on that day.

[Ray Dalio]

Oh, okay.

[Gary Vaynerchuk]

But I was just trying to nail another good day.

[Ray Dalio]

Another good day.

[Gary Vaynerchuk]

Another great, long time, historic day. Great. And so, okay. In 75, but you started trading at 12. Why?

[Ray Dalio]

I. I caddied at I caddy.

[Gary Vaynerchuk]

Fancy place.

[Ray Dalio]

It was a fancy place to me. I didn't. You're right, of course.

[Gary Vaynerchuk]

Still talking.

[Ray Dalio]

I'll tell you, I walk talk. It was the 60s. This was when the stock market was hot and we would talk about stocks and I would earn $6 a bag, carry two bags, $12. Whenever I would get like $50 or more, then I would buy stocks. And the first stock I bought was the only stock that I ever heard of. Here's my criteria. The only stock I ever heard of that's selling for less than $5 a share. And the reason I bought it was I figured I could buy more shares. So it went up and I would make more money. What an investment strategy. Right. 12.

[Gary Vaynerchuk]

It's an early strategy. It's okay.

[Ray Dalio]

Okay.

[Gary Vaynerchuk]

You built on top of that strategy.

[Ray Dalio]

So what happened is. Well, what happened is.

[Gary Vaynerchuk]

What was it?

[Ray Dalio]

What happened was the company was about to go bankrupt. Somebody took it along, acquired it, it tripled. And so I was hooked. Right. So I was hooked. I said, this is easy.

[Gary Vaynerchuk]

Do you remember the name of the company?

[Ray Dalio]

Yeah. Northeast Airlines. Northeast Airlines. Okay. And so I figured this is gonna be an Easy game. Because like you can go into the Wall Street Journal and you have all these names, like, I just need to pick one that goes up or one that goes down. Well, then I was just thinking up, okay, so that's when I got hooked. And then I learned over a period of time that investing is not easy, okay? It's an extremely difficult thing. And you have to be an independent thinker. The thing that I learned the most, which was the most was first, whether you're an investor or you're an entrepreneur, that you have to think differently in order to be successful. So you have to bet against the consensus.

[Gary Vaynerchuk]

That's right.

[Ray Dalio]

Betting against the consensus and being right is what you need to do. And that's not easy, okay? And I'll tell you, when you go down that path, you're going to be wrong a fair amount of time. And so in order to know how to be wrong. So what I learned from this, the main thing I learned was to be an independent thinker and also to also have humility, okay? Because the humility, the worry about being wrong is the thing that is a power. It gave me an open mindedness, that open mindedness to worry about being wrong. To find the most intelligent people who disagree with me so I could gain their perspective. So not curiosity, that trend. So this is what was the most powerful influence. And so I remember I crashed in 1982 in the markets. I mean, meaning. If you want the story, I'll tell you the story. Okay. So I started the firm in 1975.

[Gary Vaynerchuk]

Yes.

[Ray Dalio]

Okay. 1980-81, I calculated that the foreign countries had been lent by American banks more money than those banks. Those countries could pay back to those banks. And it was two and a half times their entire capital. And I calculated that they were going to default. That was a crazy point of view at that time. Very controversial independent point of view.

[Gary Vaynerchuk]

What was the counterpoint?

[Ray Dalio]

Well, nobody thought you were gonna have this giant default and collapse. Everybody thought, okay, banks are lending, that it just wasn't an awareness.

[Gary Vaynerchuk]

Right.

[Ray Dalio]

It was like going into 2000-2007-2000-2008. Okay? People didn't get it.

[Gary Vaynerchuk]

Yeah.

[Ray Dalio]

Okay, so, but you're. I have to be an independent person. I did the calculations. I went around. Lo and behold, on August 1982, Mexico defaults on its debt. And this was a controversy. I get a lot of attention. I'm asked to testify. I was asked to testify to Congress and to explain, explain to them what, what's going on. And I was asked on Wall Street Week which Was then the show of the time and so on. And so very, very publicly I had said, we are going to go into an economic collapse. I couldn't have been more wrong. This was the exact bottom in the economy, in the stock market. I was wrong. That didn't pass through, okay, Painfully wrong. Can you imagine? I had to let go everybody in my company. At that point. I was down to basically me and having to make a decision of what I would do. This is now seven years after I started my company. Right? And that was the best thing that ever happened to me in my life. I mean, well, maybe my, my. Maybe my wife and kids would, but. But this was. In any case, what it gave me was the humility that I needed to balance with my audacity. It gave me that fear of being wrong. Okay? That fear of being wrong. And that fear of being wrong gave me an open mindedness. That was the bottom. That was then. From, from that Point forward, from 1982 to now, now we have 1500 people work there. It's been a tremendously successful operation largely because of that gift of humility. And my attitude about mistakes changed a lot. In other words, mistakes I began to think of as puzzles. That if I could solve the puzzle, I would get a gem. The puzzle is what would I do differently in the future so I don't have that terrible experience again? And the gem would be principle. A principle of what I would do different in the future. And that's when I started to write them down. So every time I would make a mistake or have that pain, I would then write down those principles. So I did.

[Gary Vaynerchuk]

What about the reverse?

[Ray Dalio]

Successes are nowhere near as valuable as mistakes because you're doing something right. And it doesn't give you the. It doesn't give you the kick, the motivation.

[Gary Vaynerchuk]

You know what I tell my audience? I tell them that I secretly dream to lose everything. So I have a lot of people in this room. Everybody's smiling right now. I literally use audacity and humility. I'm listening to you and I'm like, wow, we are stunningly similar.

[Ray Dalio]

This is the thing that a lot of people don't understand and this is why it's so important. They think successful people are like. Successful people aren't. They think successful people are. These all stars, they're all knowing people and so on. I got to know the most successful people in the world. World and all this. They're not like that, okay? They all have flaws. They just know how to compensate for it. And the compensation is largely knowing what they know, and most importantly, knowing what they don't know. And so when I'm hearing you, I think you probably learned the same thing I learned. When we talk together, we convey. And this is true with most successful people, what you learned is you can't lose by an experience. When you have a secret desire that you're talking about that you might fail, okay? It's because you're making different connections and you and I making the same connection, I go into an experience and I say I can't fail because either one of two things is going to happen. I'm either going to have success or I'm going to have an experience that's going to teach me something. And so I'm going to learn. And it's all. You learn more from the mistakes and the pains. I've got a saying, pain plus reflection equals progress. Pain plus reflection. So if you start to get that instinctual reaction that you have, pain, and you get past that moment because it's an emotional experience and you can't think all that clearly, you pause and you get past that moment, and then you reflect in a quality way and you write down your principles of what you learned so that you would do it differently in the future. Your life is going to be great because you're going to evolve. Failure is part of the process to achieve success. And when you reprogram yourself to think that way, all of a sudden you're on that path. And it's the opposite that you're taught. It's the opposite that you're taught in school. It's the opposite that you believe. Yes, you do. Successful people get it.

[Gary Vaynerchuk]

How much of this equation has to factor in your ability to contextualize feedback from the people that you care about the most?

[Ray Dalio]

Oh, it's essential, right?

[Gary Vaynerchuk]

I'm aware I set you up here.

[Ray Dalio]

In other words, it's the criticism, it's the game. It's the key here.

[Gary Vaynerchuk]

Do you love when people criticize?

[Ray Dalio]

I love it.

[Gary Vaynerchuk]

Of course you do.

[Ray Dalio]

Of course I love it.

[Gary Vaynerchuk]

I love it so much.

[Ray Dalio]

Well, I love it so much.

[Gary Vaynerchuk]

Do you know why I think I manipulate it? I think a little bit of my shtick is to force negative feedback because I feed off of it so much.

[Ray Dalio]

Well, it does two things. It allows you, first of all to get the things that you might be missing because nobody sees themselves objectively.

[Gary Vaynerchuk]

Of course, that's not. That's possible.

[Ray Dalio]

So not only do you get the objective feedback, but you redefine your relationship with the person, because if that person is Carrying it around.

[Gary Vaynerchuk]

And.

[Ray Dalio]

And they think, oh, you're screwed up this thing, and they're having to bottle it up. You're gonna have a lousy relationship with them. The ability to speak frankly with each other is the most important thing. We built an idea meritocracy. Okay. I was talking about some of my personal preferences and principles, but, okay, now built an organization that is an idea meritocracy. Okay? Meaning how the best idea is.

[Gary Vaynerchuk]

Everybody knows. I just want to help my audience a little bit here. What Ray's company was unbelievably famous for. This is how I interpret it. From afar, very far away. Cause I didn't pay attention to the finance world, but it hit the cultural lexicon was the thought of, like, oh, my God, there's this company, hedge fund, which is very Wall street, where the first year in person from a very different background had an equal voice to the CEO. And they would debate it in a room. It was a radical candor that hadn't been seen before.

[Ray Dalio]

And I want to convey to everybody the magic of how this works. Right. This is one of the things I wanted to convey in this book. Please. Okay. So now imagine that you're in an organization in which you really do believe. It's an idea meritocracy where the best ideas win out. Okay, so then I'm gonna give you the sentence of one sentence about what my company, Bridgewater, was, what I needed.

[Gary Vaynerchuk]

Please.

[Ray Dalio]

And what I recommend to everybody. An idea meritocracy in which the goals are meaningful work and meaningful relationships. That they're equally important because I find them equally rewarding and they reinforce each other. So idea meritocracy, where the best ideas win out. In which the goals are meaningful work and meaningful relationships, which are achieved through radical truthfulness and radical transparency. Radical truthfulness means that anybody can say what they really mean.

[Gary Vaynerchuk]

Yes.

[Ray Dalio]

Okay. And the transparency means that you can't manipulate the truth.

[Gary Vaynerchuk]

That's right.

[Ray Dalio]

In other words, if you have transparency here, we literally record everything for everybody to see. If I'm literally doing a review of somebody or if I'm doing anything, including mostly making my mistakes.

[Gary Vaynerchuk]

I get it.

[Ray Dalio]

I show everybody that process. They show each other. And you have that openness because you have bad things go on in the dark. When you open that, then everybody understands it, and so you get to truth.

[Gary Vaynerchuk]

Do you have a sense of a reaction to the situation in our society right now, where the exposing of the shadows of our society are on full display right now?

[Ray Dalio]

It's great. I think the key to an idea. Meritocracy is three steps. First, put your radical. Put your honest thoughts on the table for everybody to see. Most people don't do that, but put your honest thoughts on there. Everybody puts them on the table. Okay. Now it's a lot clearer. We honestly think that that's step one. Step two is understand the art of thoughtful disagreement.

[Gary Vaynerchuk]

Yes.

[Ray Dalio]

In other words, you react to disagreement in a way where it's curiosity. I might be wrong. How do we get there? Not as a fight. Right.

[Gary Vaynerchuk]

Not a political war. Warfare.

[Ray Dalio]

Not Right. In other words. I'm curious. Human nature and our habit is so counter that two people go to a restaurant. One says, I don't like the food. Somebody's reluctant to say, no, I do. I mean, simple things like that. So to understand the art of thoughtful disagreement, that's step number two. And through that, you can understand each other better. You can probably make a better decision than you can make individually. The power of good collective decision making is enormous relative to what anyone has in their own head. And then the third step is, if you don't have an agreement with that, how do you get past that? You have to have a protocol in any relationship. In some, however you do it, there.

[Gary Vaynerchuk]

Needs to be a judge and jury. Whether it's a process or a human or what have you.

[Ray Dalio]

I don't know. It's the same.

[Gary Vaynerchuk]

It can go on forever.

[Ray Dalio]

Right. It may be the same with your spouse, maybe. I mean, in other words, you still have whoever you're.

[Gary Vaynerchuk]

Is flipping a coin a good idea?

[Ray Dalio]

It could be.

[Gary Vaynerchuk]

Maybe.

[Ray Dalio]

And maybe the rule, in other words, or what I like to do, what I general go to, is mutually agree on a party that you say, okay, help me through this disagreement and help me get to that. That's a good handy process. Or we, in our own way, we have what we call believability weighted decision making. I'd like to tell you about it. Okay. Believability weighted decision making. To describe what it's like, I'll use a simple example.

[Gary Vaynerchuk]

Go ahead.

[Ray Dalio]

You're sick.

[Gary Vaynerchuk]

Yes.

[Ray Dalio]

You have a bad disease and you want to go. And you say, I better go to the doctor. Well, you know that you're not the person to prescribe yourself, so you know that you're not the believable person. So the best thing you could do is to find three people, two or three people, ideally doctors in that case, who will disagree with each other, who are willing to fight, Find the right answer, and we'll disagree. If you do that kind of triangulation, and they all sort of agree. And then you're listening and it makes sense what they're saying. Probably you should go down that path. When they're disagreeing, they're bringing to the surface the issues. When you start to think about how do I make sense of that and how do I weigh that? You're then going to come forward and you're going to weigh, at the end of the decision, you're going to say, who am I going to believe? And what you're going to do in your subconscious mind is going to go, oh, I weigh this one more than that one, and I'm going to make a decision. Okay, so now imagine a system in which everybody has believability weighted points. In other words, imagine that all the people that you're working with actually start to create points. I won't digress yet. And how we do it so that now we know that your believability on that subject is different than your believability, and everybody has that, then you have a weighted average vote based on believability. Okay, that's an idea. Meritocracy. It's gonna get you the best decision. The reason it gets you the best decision is because you as an individual don't have the best answer. In other words, if I come to there, if I'm always the one that's the boss, think about decision making. There's two types of.

[Gary Vaynerchuk]

Before you go there, Rhett, I'm just ridiculously curious now, and I'm doing a good job staying quiet. And the fans are very happy right now while they're commenting about my quietness and the fact that we're so similar, which is probably interesting to them. I'm dying to know this answer. So you did this. You scaled it. It's unparalleled documentation. You know, I could be empathetic to it. I document not only my business, my actual life. Da, da, da, da. On the hedge fund level, it has.

[Ray Dalio]

Nothing to do with being a hedge fund.

[Gary Vaynerchuk]

I'm very aware. On the hedge fund level. Okay, when did the process of things like this or the principles make the wrong call on the execution? On the business level.

[Ray Dalio]

We make mistakes all the time.

[Gary Vaynerchuk]

Of course. Of course. I'm asking you for the pattern recognition, so I'm listening.

[Ray Dalio]

Okay.

[Gary Vaynerchuk]

You're deploying.

[Ray Dalio]

What it does is it shifts the probability of making mistakes.

[Gary Vaynerchuk]

I understand.

[Ray Dalio]

Dramatically.

[Gary Vaynerchuk]

I understand.

[Ray Dalio]

Okay, but I'm not.

[Gary Vaynerchuk]

Let me continue.

[Ray Dalio]

Clarify.

[Gary Vaynerchuk]

Did you find any pattern recognition to the vulnerability of the principles in the execution of the principles in the hedge fund environment.

[Ray Dalio]

And it's not the particular hedge fund environment. It is the notion of individuals being able to separate themselves from their opinions, to be able to know what they're bad at, what their weaknesses are. And by having that person by person so that they can then put together the teams. In other words, people think differently. Somebody's very creative, they're not reliable.

[Gary Vaynerchuk]

Understood.

[Ray Dalio]

Somebody's very reliable, they're not creative.

[Gary Vaynerchuk]

That's right.

[Ray Dalio]

They can't get there themselves without having it all. So to know and embrace their strengths and their weaknesses and to be able.

[Gary Vaynerchuk]

To think, somebody should triple down on their strengths. If you're self aware and you're. Or do you spend time on the vulnerability?

[Ray Dalio]

No, no. The vulnerability you've got to cover, okay. You naturally, okay. Because you're natural, your strength is going to lead to your success and you've got it. Okay. Where I watch everybody fail is in their vulnerability. If you go back and examine the.

[Gary Vaynerchuk]

Problems, are there things that are commodity vulnerabilities versus like. Like to me a vulnerability. Lack of self awareness is a fatal vulnerability. Sorry, Lack of self awareness is a fatal vulnerability versus being good at structuring sentences.

[Ray Dalio]

Yeah. Lack of self awareness, particularly what I'm saying is lack of self awareness where it produces what you don't know. Your weakness is. Is killing you. Okay. To be able to orchestrate. Well look, you run a business, I run a business, 1500 people. Okay, that's. And you take that and you said what you do is you orchestrate the power of other people. And it's like an orchestra.

[Gary Vaynerchuk]

I totally understand.

[Ray Dalio]

Some guy is playing violin and another guy is playing. Playing the elbow. And those people actually have different skills.

[Gary Vaynerchuk]

Putting players in a position to succeed.

[Ray Dalio]

Right, right, right. And in order to do that you have to really know what they're like. And you know what the biggest problem of most people and the biggest problem of most companies. They don't want to really get at what people are really like. Include. They don't want to look at their weaknesses.

[Gary Vaynerchuk]

Of course not.

[Ray Dalio]

That's the biggest source of failure. And it's therefore if you know that it's the biggest path to success.

[Gary Vaynerchuk]

A hundred thousand percent. Do you believe that people are incentivized in the short term which makes them close the eyes because they think they can get through the funnel all the time.

[Ray Dalio]

Right. It's like the first order consequences and the second order consequences more often in life. Life tricks you because the first order consequences are the opposite of the second order consequences. Meaning if you look at it's like food. All the food that's delicious is probably bad for you and all. I mean a lot of them and the food. So. And it's the exercise. Okay. And it ain't fun. I don't like it. The first order consequences are the opposite of the second order consequence. A lot of life. It's almost like you're being tricked and life is going to trick you.

[Gary Vaynerchuk]

I believe that you're going to go.

[Ray Dalio]

The guy who goes after the first order consequences without regard to the second order consequences is going to be.

[Gary Vaynerchuk]

I call it checkers and chess.

[Ray Dalio]

Okay.

[Gary Vaynerchuk]

People are always just doing the first.

[Ray Dalio]

That's right. And so that is the key, 100%. That's why you have developed that instinct that we just talked about a little bit ago where you can succeed from failure. A lot of people don't get this. Most people don't get this because they think failure. I don't want failure. But because you learned and I learned how to make the most out of failure. My instinct is almost failure equals success. Now that sounds dumb.

[Gary Vaynerchuk]

No, it doesn't.

[Ray Dalio]

I call it failure equals success.

[Gary Vaynerchuk]

Micro failures, macro wins.

[Ray Dalio]

Right. Because you learn whatever you do, as.

[Gary Vaynerchuk]

Long as it doesn't eliminate you.

[Ray Dalio]

That's exactly.

[Gary Vaynerchuk]

That's it.

[Ray Dalio]

If you don't get killed, knocked out of the game. Okay. Keep playing. Okay.

[Gary Vaynerchuk]

You know how many fighters get knocked down in the first round and win the fight? A high percentage. It's just. It's just so interesting.

[Ray Dalio]

Right?

[Gary Vaynerchuk]

I love this shit so much. Right? I believe in this. I believe in this tremendously. And where it takes me and it took you in a certain path. Where it takes me. The inner relationships. I think a lot of people can't execute what you and I believe in deeply because of their inability to contextualize feedback of their inner circle.

[Ray Dalio]

But I found, I built a whole culture based on this. And I built and I found this. It takes about 18 months to get in the habit. It's all a matter of habit.

[Gary Vaynerchuk]

I understand.

[Ray Dalio]

And if you create a culture.

[Gary Vaynerchuk]

I understand.

[Ray Dalio]

In which it becomes part of the culture. It's like a culture in which people I don't know are eating and doing healthy things. Then it becomes self reinforcing and it can be done. What I did in the book was to put together all the protocols because I want to book not just theory like this. I wanted to get to produce personal change. In other words. And if you're doing the personal change thing, you got to do certain things that are protocols that I learned over Those by making the mistakes over something like, you know, whatever it was. Forty some odd years, that's what I learned.

[Gary Vaynerchuk]

Did your parents instill self esteem into you or did you think that you developed it over time by what you surrounded yourself with?

[Ray Dalio]

I don't. My. My mother loved me a lot. I think my dad loved me a lot, but I'm. I don't know where. My dad was a jazz musician and I. So I didn't. He stayed up late at night and he would come back and I didn't see a whole lot of him. I don't know exactly what that meant to me. That's all deeply subliminal or whatever. But I did think my mom thought I was terrific and she loved me a lot. That was a blessing. I was also blessed to be able to have the most fundamental things of being able to, you know, have a stable house. I could go to a school. That was a good school, those things. A lot of people are not in that position.

[Gary Vaynerchuk]

Are you competitive?

[Ray Dalio]

No, I'm not competitive as much as driven.

[Gary Vaynerchuk]

I understand.

[Ray Dalio]

Okay.

[Gary Vaynerchuk]

Did you ever cry when you lost the game?

[Ray Dalio]

Hmm? I don't know.

[Gary Vaynerchuk]

Okay.

[Ray Dalio]

You know, I don't think so.

[Gary Vaynerchuk]

Right.

[Ray Dalio]

I don't think so.

[Gary Vaynerchuk]

Okay.

[Ray Dalio]

But I don't really know, you know, because it's such a long time ago, right?

[Gary Vaynerchuk]

It wasn't like eight years ago in Monopoly.

[Ray Dalio]

Yeah.

[Gary Vaynerchuk]

I mean, I'm just, you know. Listen, I'll be honest with you. This is super. I wish you knew more about me. They are literally. There is an enormous amount of people watching right now that are freaking out because not only are we similar in our framework, we're using similar. I mean, I use audacity and humility. I will show you content. One of the great things about documenting everything is I'm not pandering to this conversation. I will show you videos from five, six, seven years ago. I believe in audacity and humility and self awareness. This is the only thing I believe in. Yeah, I don't even know what else to tell you. Like, this is the framework. I call it a blueprint. You call it a principle. It's the punchline. It's short term, long term, it's the value of patience. It's micro failures, macro wins. It's just all the same shit. I might not even read the book anymore.

[Ray Dalio]

I understand this is what you're talking about. This is how much you know and how good you are at something. This is humility.

[Gary Vaynerchuk]

I get it.

[Ray Dalio]

If you want to be successful, be here.

[Gary Vaynerchuk]

I got it.

[Ray Dalio]

Man, right now you understand it. A lot of people understand it. It's not what our education system teaches.

[Gary Vaynerchuk]

No shit.

[Ray Dalio]

Our education system is the opposite.

[Gary Vaynerchuk]

Right. I got D's and F's.

[Ray Dalio]

I understand. I was a lousy student.

[Gary Vaynerchuk]

No, no, no. Were you D's and F's? You got C's.

[Ray Dalio]

I got C's.

[Gary Vaynerchuk]

Respect.

[Ray Dalio]

Okay, so I was. Okay, okay. But I mean, like, I get it. Okay.

[Gary Vaynerchuk]

Do you believe? So let's talk about that because I think people will find that fascinating. You have an all time career. I'm pretty damn convinced as long as I stay healthy, I'm gonna have an all time career. We get seasoned. Do you think that we had so much natural self awareness and self esteem being built by our moms that it gave us the audacity at such a young age to quantify what the hell we were in and starting to develop other things that were naturally gonna happen later?

[Ray Dalio]

I don't know. I could only tell you what it was for me. Right? Okay. I mean, for me it was like all that other stuff was like, memorize this, remember this, follow instructions. My brain didn't work that way. Right. I have a terrible rote memory. Like if I have to remember anything that doesn't have a reason for being what it is, all numbers, names and all that. So there was something in any case. But I had a lot of curiosity.

[Gary Vaynerchuk]

The lack of practicality.

[Ray Dalio]

No, I wasn't practical.

[Gary Vaynerchuk]

Did that seem like to me. They're still doing it, Ray. When the information's on the goddamn phone right in front of you.

[Ray Dalio]

I understand. I mean, and that means you. I mean, to me it destroys your thinking, your curiosity. Anyway, I don't know why I was that way.

[Gary Vaynerchuk]

Lack of education can be a disproportional strength.

[Ray Dalio]

Oh yeah. Because you have to discover. Because you have to discover for yourself. Discovering for yourself. There's a negative correlation. You have to discover for yourself. Do you follow instructions or do you discover for yourself?

[Gary Vaynerchuk]

Do you remember?

[Ray Dalio]

How can you be an independent thinker? Like, oh, we just went through this issue in the investment area.

[Gary Vaynerchuk]

Yes.

[Ray Dalio]

Or if we're taking entrepreneur.

[Gary Vaynerchuk]

Yes.

[Ray Dalio]

I just told you, you gotta be an independent thinker. Okay? How do you get to be an independent thinker?

[Gary Vaynerchuk]

Gotta taste it. Seriously.

[Ray Dalio]

Not by following instructions and memorizing.

[Gary Vaynerchuk]

Why do you think I don't read any fucking books?

[Ray Dalio]

And all the way until you're coming out of school?

[Gary Vaynerchuk]

I get it, Ray. It's why I don't read books. It's why before we went on air, everybody I was telling Ray about what I'm up to here. Cause we didn't talk about it last time I had a taste this for myself. I could have hired people that ran CPG brands. I need to discover it for myself, contextualize it for myself, and understand the attention graph of the end consumer for myself.

[Ray Dalio]

Right. So let me. And I'm the same way that. Just as I learned. But that's how our brains work that way. Let me say that other people's brains also work differently.

[Gary Vaynerchuk]

Not as good. No, I'm kidding, I'm kidding, I'm kidding. I know, I know, I know, I know.

[Ray Dalio]

This is the thing.

[Gary Vaynerchuk]

Why do you. Why do you think I surround myself with people?

[Ray Dalio]

Exactly.

[Gary Vaynerchuk]

But it was a good joke, Ray. Okay, all right, keep going.

[Ray Dalio]

Good joke. That's the thing when you realize you need it all.

[Gary Vaynerchuk]

I agree.

[Ray Dalio]

Okay.

[Gary Vaynerchuk]

And you need offensive lineman get paid too. I agree, man. A left tackle is really expensive.

[Ray Dalio]

Right?

[Gary Vaynerchuk]

I'm with you, brother. Let's take a phone call. I'm. I'm so curious to. What Vaynernation put your phone numbers into Facebook, as you know. We have to take a call. This is a very intriguing conversation, mainly because two or three years ago, an enormous amount of people that knew me best told me that I should be a hedge fund manager. Not because of the economics, but because of the way my brain worked. And it's just. It's been interestingly running, sitting here, knowing how the most successful you are in that world. I'm like, oh, shit. They might have been right. Anyway, who's calling first?

[C]

Tim.

[Gary Vaynerchuk]

Tim. Ray. How much longer? Well, just little. Let's take it way down while we get Tim on the phone. How much longer are you gonna be promoting? I'm just curious. On a micro.

[Ray Dalio]

Basically just through January or so. And then what I wanna do is pull other people's principles out and go that route and make it clear on that. But basically, Tim, it goes down.

[Gary Vaynerchuk]

Yes, sir, this is Gary Vaynerchuk and you're on with Ray Dalio.

[C]

Gentlemen, this is Tim Ferriss calling.

[Gary Vaynerchuk]

No, it is not. Get the hell. You guys are real characters. Hello, Timothy.

[C]

Good evening, Gennady. Nice to see you. And my question is for Ray. Ray, I'm so excited by what you're sharing with the world and it's of such great value. I have to. To ask you, because our conversations have been so impactful for me, could you give any advice to people who are watching and listening to this, who have struggled with or struggle with depression or bipolar disorder? Challenges of that type.

[Ray Dalio]

Yeah, as you know, I'm an expert on. I have a son who's bipolar and he's gone through the whole thing. And so, I mean, I can give, you know, a lot. And by the way, he's totally successful, he's totally together and he went through the journey. He did a. Paul's. Paul Dally is his name. He did a book, a movie called Touched with Fire. I recommend you see Touch with Fire. Anyway, it conveys it. And so I'm an expert. I mean, we did this.

[Gary Vaynerchuk]

I'm listening.

[Ray Dalio]

Okay, so if you're first realize that insanity is at the brink of genius, in other words, that there's quite a lot, it's just almost a tuning thing, the thinking differently, that creativity. So, okay, it's a tuning thing. And then what? Okay, so the advice is when you go through the bipolar first to recognize that you have to go along with the program, to follow other people. You have to take your medicine. The things that the rules were, take the medicine, get to bed at before 11 o'clock every night because there's a biorhythm thing that's going on. Make sure. In his case, meditation helped him a lot. It helped him keep centered. And most importantly, don't do substance abuse in any kind of way. Okay. Keep ultra clean. So those were the things.

[Gary Vaynerchuk]

But would that be difficult with the medicine part, step one, because you could go too far with it.

[Ray Dalio]

No, the medicine, the medicine is a tuning thing.

[Gary Vaynerchuk]

Understood.

[Ray Dalio]

You start in, you're talking about other things. So what they do is they bled, they, they knock you with the medicine to try to get you centered, in control. It produces a numbness. That numbness has the effect of, you don't want the numbness. You say, I want my life. Also, when you have to understand what a kick it is to have manias, like it's a super high. And so you're denied that kind of super high. And so that's a very difficult thing to get past. But when you start to crash enough, as we talk about failure and crashing, this is super crashing. And then you say, okay, I don't want it anymore. And you have to realize that to tune that medicine is going to take a while. It's a little bit of this and a little bit of that and the tunes it. And then so to be able to do that, to be able to realize that you will be more creative than ever, he's become incredibly creative because he can deliver on that other stuff. So when you start to realize that other people can do it right. So that's the punchline. Jim and I talk about this because, you know, it's an issue.

[Gary Vaynerchuk]

Yes.

[Ray Dalio]

So, Tim, talk to me.

[C]

No, I just wanted to elicit that because I'm sure there are people listening who can benefit from those recommendations. I've found that the going to bed by 11 or certainly before midnight, even though I've historically been a night owl, is a really effective intervention or preventative measure, like you mentioned. And the meditation, whether it's transcendental meditation or using an app like Headspace Phase is also a fantastic way to tune, like you said, the awareness of your emotional state so that you don't get carried away by the story that you tell yourself or the stories that you might tell yourself. So I agree with you. I just wanted to hear someone of your credibility expand on it a bit. For people who are listening, who might think that they're uniquely flawed in some way that's unfixable, they're broken. Because I just don't believe that to be the case, even though I've struggled with a lot of this.

[Gary Vaynerchuk]

But it's also.

[Ray Dalio]

I just wanted to say it a very important way, a very important thing is that you're probably gifted 100,000%. In other words, read the book Touched With Fire by Kay Jamison and all that. If you take the people, this is people who are the most creative people in the world. I mean, you could have Winston Churchill and. I mean, I could list all of these unbelievably creative people who are bipolar. Okay? So there's a big gift element, but it has to be managed. You have to get it tuned right. You know this, Tim, because you, you know, you experience it. We experience it. And so to realize that also, that means that people who are not suffering from these challenges also have the ability to move beyond it. They should have tolerance of other people. They should have understanding, so they should be successful. Tim, thank you for bringing that up, Tim.

[Gary Vaynerchuk]

First of all, thanks for calling. It makes this super rad and fun. Second of all, earlier I told Ray I was impressed with his hustle. He's showing up in many, many places. I also wanna give you that accolade. First of all, thanks for coming the other day. Second of all, you're hustling like, I can't avoid you. The book seems to be going well. How's it going?

[C]

It's going great. I appreciate it.

[Ray Dalio]

And let me just. Let me just say something about the book, which is really cool, because by coincidence, we're all talking about principles So I wrote this book which is, you know, how to think about principles in general and my principles. And he immediately comes, same thing. By coincidence. You got a book of a whole bunch of people's principles, essentially. That is so. It's fantastic, right?

[Gary Vaynerchuk]

Do you want to destroy Tim's book sales? Do you want this to dominate? How do you feel about that? No, no.

[Ray Dalio]

Like Tim, man, we are in this thing together.

[Gary Vaynerchuk]

Together. Bundle packs.

[Ray Dalio]

Okay, Bundle.

[Gary Vaynerchuk]

Wait a minute. I'm joining too. Crushing it. Come out now, January 30th on Amazon Principles. I mean, like we can go a three way path. Kim, did you see the girth of Tim's book?

[Ray Dalio]

Yeah, but it's a reference book.

[Gary Vaynerchuk]

I know, I saw it.

[Ray Dalio]

It's not like you sit there, oh, I know.

[Gary Vaynerchuk]

You could consume it. Of course. The format was brilliant.

[Ray Dalio]

Right. And the curiosity that you might have. Oh, I wonder what that was.

[Gary Vaynerchuk]

But how about how good looking Tim is? We haven't talked about that part yet.

[Ray Dalio]

Okay, so, Tim, what's your principle? I know what it is. Stoicism.

[C]

It is. That's a primary bedrock. And I think that also helps with the management of what we were talking about and not making this up. The most frequently bought together with my book is Principles by Ray Dalio.

[Gary Vaynerchuk]

I love that. Hey, Tim. One of my favorite moves of all time in the thing that I'm fascinated about, which is attention, was during the height of trl, P. Diddy would leave his office and go. I think he was Puff Daddy back then. And he would go to TRL while Carson was on the air. And Ray, this was a show. Do you know what TRL was? Yeah. Okay, so you know, Carson Daly would be on. He would have the Britney Spears in the one directions and the thing. Oh, not one direction. Excuse me, like 90 degrees of the World. And it's funny how that slipped up and that's funny. Anyway, nonetheless, he would have all these act ons and Puff Daddy would leave his office at bad boy, drive to Times Square, run up the elevator, the stairs, get on set and run. Basically run on set. Hack the attention of the youth of America to get the exposure. Tim, calling this show right now is the P. Diddy move of 2017 in publishing personalities. Tim, I'm impressed. I'm very impressed by your strategies and I love you very much.

[C]

I love you guys too. I don't want to monopolize the conversation.

[Gary Vaynerchuk]

See ya.

[C]

But Ray, thank you for indulging the question and I think it's really important. So I appreciate you putting it out.

[Gary Vaynerchuk]

In the World take care of you.

[Ray Dalio]

Tim, for bringing it up.

[Gary Vaynerchuk]

See ya. While we're getting one more phone call. Sports, just because it's a big interest of mine, what's your life with sports, whether playing or consuming?

[Ray Dalio]

Not much.

[Gary Vaynerchuk]

Zero.

[Ray Dalio]

Well, like, like, I, I, I, I don't get distracted. Okay.

[Gary Vaynerchuk]

You like ping pong?

[Ray Dalio]

I, what I do, I don't have much time for this.

[Gary Vaynerchuk]

I respect that.

[Ray Dalio]

Yeah.

[Gary Vaynerchuk]

How about growing up? Did you consume any sports growing up?

[Ray Dalio]

I played golf. I, I was on a high school football team. What position? Safety. I was a strong. Well, I forgot what they call a strong line.

[Gary Vaynerchuk]

Strong side linebacker.

[Ray Dalio]

I was on the line.

[Gary Vaynerchuk]

Very nice. Rushing the quarterback.

[Ray Dalio]

Yeah.

[Gary Vaynerchuk]

Trying to sack the quarterback.

[Ray Dalio]

That was my job.

[Gary Vaynerchuk]

You enjoyed it or you did it because it was the thing to do?

[Ray Dalio]

Yeah, I didn't really enjoy it very much. No, because what it was is like, it was just sort of like following and hitting, you know, it wasn't one of those things in which I had any. They gave me plays and the plays was you hit that guy. No room for improve improvisation.

[D]

Hello, Christy.

[Gary Vaynerchuk]

No. Is that Christy?

[C]

Should be Chrissy.

[Gary Vaynerchuk]

What's your name, my friend? Yeah, Chrissy.

[D]

Christy and Brian.

[C]

Gary.

[D]

How are you?

[Gary Vaynerchuk]

We're doing well, Christy, how are you?

[D]

I'm doing good. Let me put, let me put you on speakerphone, Chris. He's right here next to me.

[Ray Dalio]

Hold on.

[Gary Vaynerchuk]

No worries.

[D]

You there, Gary?

[Gary Vaynerchuk]

We are here and we're. Ray, say hello.

[C]

Hello. Say hello.

[Ray Dalio]

Hello, Christy.

[Gary Vaynerchuk]

Do you guys have a question?

[D]

We do. We were just sitting here finishing dinner. We're talking about it. We're like, oh, my gosh, I hope Gary calls us because we're huge fans.

[Gary Vaynerchuk]

Well, thank you very much. Thank you, Christy.

[D]

Our daughter's chiming in. She's two years old. She's saying yes as well.

[Gary Vaynerchuk]

I love it.

[Ray Dalio]

That's the best. I got two grandkids close to that.

[Gary Vaynerchuk]

So what question do we have?

[D]

We are currently reading the book Ray, and we just started reading it. It's a fascinating book. You talked about it with Tony Robbins not too long ago. And we both want to know what your favorite principle has been so far.

[Ray Dalio]

Well, my most important principle.

[Gary Vaynerchuk]

Hold on real quick. Don't answer it. His favorite from the people he's been asking or his personal favorite.

[D]

His personal favorite.

[Gary Vaynerchuk]

Understood.

[Ray Dalio]

Thank you. Knowing how to deal with my not knowing. Okay. Starts off, embrace reality and deal with it. So to appreciate reality, knowing that I don't know, to separate myself from my own points of view and to take in the best and to learn and to evolve all of those principles related to that. That's really where the greatest power comes from.

[Gary Vaynerchuk]

I love it. Brian, Christie, thank you guys so much for calling. Thanks for reading the book.

[D]

Thank you, Gary. We really appreciate it. We, we follow you, everything you do. I was just listening to, to your speech in OSLO and the 180, the $80 principle. We just started doing it with our small business and we're already seeing feedback from it, so we.

[Gary Vaynerchuk]

Go figure. Thank you both. Thank you so much.

[Ray Dalio]

Oh, can I ask you the quick question of what the $80 principle is?

[Gary Vaynerchuk]

So I, I am very. I think the reason I'm really starting to gravitate towards you is one of the things that's fascinating about what I'm doing is I'm putting out so much content. I've been starting to talk about it as like open sourced entrepreneurship. Unlike a lot of individuals that are living my profile, I have very little ask for my audience. I'm not interested in monetizing my audience. I have a separate business world. It's not what I do. Right.

[Ray Dalio]

I understand completely.

[Gary Vaynerchuk]

Good. So I figured you would. So one of the things that's interesting is I live much more in principles. To me, in the way that you would use it. To me, things are very macro. There's rules about patience and the long game and humility, self awareness, lack of romance. I'm just not romantic about anything that happened yesterday. Things of that nature. Okay, well, what that does is it gets very theoretical and I'm concerned that my audience is getting the framework, but they are so hungry for the details. Back to schooling and things of that nature. And I always say leave that to others. But once in a while I get inspired. So I love leaving 2 cents. What's your 2 cents on the issue? Right. You're leaving your 2 cents. I came up with this concept on Instagram. When you put in a hashtag, it will show you nine posts at the top around that hashtag. So if we put in meditation right now on Instagram, there will be nine posts that are featured ahead of the others. That's the UI of the product.

[Ray Dalio]

Oh, I didn't know that.

[Gary Vaynerchuk]

So I told people, if you have no audience and nobody knows who you are, you can produce content, but you can also become part of the community. And so what I did on Twitter in the early days, Ray, when nobody knew who I was when I was running a wine business, is I went on Twitter and I answered everybody's wine questions that they were tweeting about. I left My two cents at scale. So I said, look, there's nine. There's nine posts per hashtag. Every day I want you to pick 20 hashtags that are relevant to your business or your ambitions, your non profit, whatever it may be, right? So 9 times 2 cents for every post, go to those posts, look at the post, consume the post, and add value to the conversation. Don't leave a post that says, buy my book. Check out my profile, follow me. No, be thoughtful of what you see and then contextualize it and leave a meaningful point of view in the comment section. If you do that for nine posts on it at a time per hashtag, you end up leaving $1.80 a day of your $0.02 times 90.

[Ray Dalio]

Ooh, cool.

[Gary Vaynerchuk]

And so what's been amazing is this has only been out for two or three days, and I'm so glad it got brought up. I'm getting enormous feedback. These are people who have 100, 200 followers.

[Ray Dalio]

See, that's very practical.

[Gary Vaynerchuk]

It is very practical, right? And that is very rare for me because I'm just not into that. It's not how I process.

[Ray Dalio]

Okay, but you see, you know those things. That's why I'm saying, like, if you could do the following, I'm just gonna give you advice.

[Gary Vaynerchuk]

Please. I'm listening. I love it. I love it. I'm open to it, especially given it coming from you, based on what I know about you.

[Ray Dalio]

Do it in your own way. Because when you're actually at a nitty gritty level and you say one of those and you then just dictate it, like, you're great verbally. Yes, you can just knock these things off like this.

[Gary Vaynerchuk]

You'll love this. I apologize. This is insane that this is happening. Iris, this is how you have to edit the day. Today. Iris came to me. She films me all day today. I'm at a conference. I'm making a joke that I like her the best more than Drock and Bab and the other people that film me. And I said, because of that, I'm gonna start articulating. And this is maybe in the subconscious. I didn't even know we were doing the Q and A show today. Theoretically, I knew it was coming this week, but it could have been tomorrow. I literally started explaining things. They came to me and they said, we're gonna put up your slide at the end of your talk. I said, could you put up the slide for the first two minutes when I go up there and then you can show me live on the three different screens? And then you can end with my slide. That's just my normal demeanor. But what I did was I challenged myself back to what you just asked me to do. And I looked in the camera and I explained to my audience in real time why I did that. And it's because the way Twitter works, if there was even one person in that audience that would see the slide go up, follow me on Twitter, or get to know what my handle was, and they wanted to tweet my quotes while I was speaking, that wouldn't have been able to be done had the slides come at the end. And that's why I always ask for my slide to go up in the first two minutes with my social media handles, so that the audience can become the amplification of awareness of what I have to say. And so I'm starting to get into a process in this point in my career where I am starting to challenge myself to get into these details. And I assume that makes a lot of sense, because that's what you do.

[Ray Dalio]

So as you see in the book, and it's the same thing, what you have is the high level principle. And then you gotta get down to that formula. Like your $80 formula actually gives that. So can I ask you a question? Yeah, go ahead.

[Gary Vaynerchuk]

I think I've struggled with that because I enjoy the unveil too much. I have felt in the last six months, and now it's synthesizing in this moment right now that there's been a little bit too much of me enjoying the aha of the detail, making the macro statement and having it be true two years later instead of over articulating it.

[Ray Dalio]

No, no, no.

[Gary Vaynerchuk]

I know. I get it.

[Ray Dalio]

I tell you, there's a difference. Aha. I mean, like, if you write down every principle and so on, even the act of you thinking it and writing it down and clearing it and showing it to us. Lights up discovery.

[Gary Vaynerchuk]

I get it. Lights up discovery. I enjoy that in a macro. It's why nobody produces, right? I don't know if you know. I assume you don't. Well, actually, through the process, you may. Nobody's producing the level of content and putting it down that I am. I believe in it so much that I've created a human production company infrastructure.

[Ray Dalio]

Do you have a book of principles?

[Gary Vaynerchuk]

No, I don't do it. I understand, Ray. This has been super enjoyable.

[Ray Dalio]

It's been blasphemy too.

[Gary Vaynerchuk]

Ray, every guest on this show gets to ask the question of the day. So right now you're gonna look into that camera and on Facebook and YouTube. Thousands and thousands of answers. Here's a chance for you to do a little focus group. Make a statement. I could care less. Ask them what their favorite color is. I doubt that's what's gonna happen. What question would you like to ask the Vayner Nation?

[Ray Dalio]

Can you separate yourself from your opinions so that you open yourself up to the entire possibility of different points of view to get the best ones for you? That's the biggest source of success.

[Gary Vaynerchuk]

Love it. Ray. Again, thank you.

[Ray Dalio]

All right. Thank you.