Ray Dalio Answers Questions About Education, Capitalism, And Principles

By Amit Chowdhry ● May 25, 2020
  • Billionaire investor Ray Dalio recently answered questions from his followers about education, capitalism, and principles. These are the questions and his responses.

Ray Dalio, Co-Chief Investment Officer & Co-Chairman of Bridgewater Associates, L.P., receives a number of questions that he answers on a daily basis on social media. So he has been sharing the questions and answers weekly on LinkedIn. These are some of the most recent questions and answers that were conducted between Dalio and his followers:

In reference to – Dalio saying “Realize that meaningful work and meaningful relationships will fulfill you and help you be more successful.”

Q.) Question about whether emerging graduates should a job that they find meaningful or one that provides a stable livelihood if they simply do not intersect.

Dalio: The emerging graduate definitely should pursue both because it’s way too early to give on having both and both are available to you somehow. Make your work and your passion the same thing and don’t overlook the money part.

Q.) What do you think about undergrads still paying the same amount for an education that could be totally remote?

Dalio: I think that it’s up to the student to decide what’s the best value alternative. As for whether those providing online education should be charging less because it’s less costly or less valuable, I don’t know enough about what’s involved to say.

In reference to – Dalio saying  “Remember that pain + reflection = progress so that your failures will give you gems/improvements if you diagnose them well.”

Q.) I personally believe this is the most important advice so far in the series. Failure and other painful experiences are the ones that make us grow the most, however only when they are properly analyzed. This is much easier said than done because before someone can rationally reflect on his or her failures, there will naturally be feelings of shame, avoidance, regret, etc. and it takes lots of mental strength to see through all of this.

Dalio: Once you get in the habit of doing this, it will become easier. A related piece of advice that’s super-important is MEDITATE!

Question: Hey Ray, what are your thoughts on college? I notice that you can find a lot of the material they teach in class online for FREE and it’s even easier to understand. So, it makes me question this form of education a little bit. I just wanted to know your thoughts on it.

Dalio: How you think is more important than what you know. It sounds like you have curiosity, drive, and practical cost-effectiveness. These are the most important things. You ask good questions and will come up with good answers. To answer your question – what you learn, whether it comes from online or from being in a class is most important. Because the value of the degree is significant and the value of the money in-person school costs varies by person. I can’t say whether those things are worth the extra cost. You will answer it for yourself and I’m pretty sure you will answer it well.

In reference to – Dalio saying “Refer to principles when you encounter issues to find the appropriate principles to consider how to handle your situation, collect and refer to great principles from people who have been successful, and start to write down your own principles.”

Question: Yes, it is absolutely true to the core of that principle, and it applies to everyone who desires to progress. I came across this Principle-centered paradigm of life that inspired me to write my own principles that empowers me on a daily basis to respond positively to every situation. This is working for me so far, and that list can be modified or updated as we experience the next challenges to grow from inside out. Ray Dalio, all the principles you have been posting are must-haves for any productivity seeking individual, and some of them can be understood only with real-time experience. Thank you for sharing your principles.

Dalio: It’s great that you’re writing down principles that work for you. Being able to easily go from the situation you’re in to the right principle for it is key. To help me and others do that I created “the Coach” which is what I urge you to write your principles in. It’s in the app Principles in Action, which also has all sorts of great stuff and is available for free in the App Store.

In reference to – The Change World Order (The Changing Value of Money)

Question: What does all this mean to me as a 67-year-old man, husband, and father. I own real estate rentals, have a California teacher’s pension, am working a part-time self-employed job making good stead money. What am I supposed to do with this information? Seems like it is for those who have substantial incomes and wealth; not me who is just a typical everyday working dude.

Dalio: You know what’s most useful to you. I hear that this might not be it. I put out what I think is interesting and helpful for people to take or leave as they care to. I hope it’s easy to sort through my stuff to pick what you like and avoid what you’re not interested in. While I hope some of my stuff is useful if you find none of it helpful, that’s ok too.

In reference to Dalio’s guest post on CNN called “We must reform capitalist, not abandon it.”

Question: Capitalism is not a system, it is the fundamental process of how things on Earth works. The way to improve it is by developing our next level of civilization, which means our ability to see past our own basic needs. It’s called compassion. Out species in places have made great strides on understanding this but we still lack implementation.

Dalio: Capitalism is a system that works like a machine, and like all machines, must constantly evolve to get better or it will die. As with all people who control machines, we must compare the outcomes with the goals to see how well it’s working. What do you think our economic machine should be producing and how well do you think it siding in producing that? If it’s working to achieve what you believe the society’s goals are, don’t try to reform it. If it’s not, reform it. As for me, I assume that the system should be a fair system (give everyone who is capable equal opportunity to succeed economically). I know that maximizing the development human potential to as many people as possible is both the fairest and most productive way for society. I know that it’s not doing this; I know why and what can be changed to make these things happen and, as a result, increase the size of the pie as well as divide it better. And, I’m pretty sure that if we don’t do it this way we will have some form of revolution that will risk the well being of capitalism, make economic conditions worse and could lead to even more problems.

Question: Ray, thanks for the insightful article. Curious if you think what we have experienced in the last 3 decades could be categorized as true capitalism? What Barry Thomas is describing rings true. And yes, companies that innovate have been able to break through; but then they benefit from the corruption and government intervention making it even harder for new companies to break through. Seems much more like an oligarchy sometimes.

Dalio: I don’t think there is something that is “true capitalism” as I’ve seen it in all sorts of forms. I do think that there are capital market cycles that are mostly based on debt and that reach limitations which is where I think we are.

Question: When 40% of the population can’t read above a fifth-grade level, there’s a problem. Perhaps we need better public policies to improve equality of opportunity, not just how to redistribute wealth.

Dalio: Equal education and equal opportunity, not equal wealth, are the most important goals to have.

In reference to – Principle of the Day: Be an imperfectionist

Question: How do you know if the factors are important to making the decision? Is there a litmus test for this?

Dalio: Through common sense and trial and error.