Ray Dalio: We’re Heading Into Very, Very Dark Times! America & The UK’s Decline Is Coming!

Pay attention. Pain plus reflection<br>equals progress. And from that<br>principle, my company became the largest<br>hedge fund in the world.<br>Managing how much?<br>$150 billion. But I learned that history<br>of things that never happened in my<br>lifetime before were important things to<br>understand in order to predict the<br>future. And we can get into that if you<br>want.<br>Peace.<br>So<br>Ray Dallio is the legendary billionaire<br>investor<br>who decoded the cycles of human history<br>to predict financial crashes. build the<br>world's largest hedge fund.<br>And now to warn us about what lies<br>ahead.<br>Are you optimistic about the future of<br>the UK?<br>No.<br>What about the United States?<br>No.<br>Why?<br>Okay. In order to bet on what's going to<br>happen on the global economy, I learned<br>that there's five big forces that create<br>a big cycle that's repeated through<br>history which lasts about 80 years. The<br>first is the money debt force that<br>creates wealth and opportunities gaps<br>and it's connected to the second force,<br>the internal conflict where you don't<br>trust the system causing wars between<br>the left and the right and it's not easy<br>answers like tax the rich and we can get<br>into that. But the third is geopolitical<br>force. In other words, international<br>conflict. Then there's acts of nature.<br>And then number five is man's<br>inventiveness particularly of new<br>technologies. Now the question is who<br>wins the technology war because the<br>winner of that determine how the new<br>world order works.<br>Is it something to be concerned about?<br>No. The question is how you as an<br>individual handle it.<br>How do I as an individual handle it?<br>So there's building your financial<br>strength, flexibility, the importance of<br>being open-minded and how to get more<br>out of the minute, not how to work<br>harder. And I really urge your audience<br>to learn all of this. So, first of all,<br>I see messages all the time in the<br>comment section that some of you didn't<br>realize you didn't subscribe. So, if you<br>could do me a favor and double check if<br>you're a subscriber to this channel,<br>that would be tremendously appreciated.<br>It's the simple, it's the free thing<br>that anybody that watches this show<br>frequently can do to help us here to<br>keep everything going in this show in<br>the trajectory it's on. So, please do<br>double check if you've subscribed and uh<br>thank you so much because in a strange<br>way, you are you're part of our history<br>and you're on this journey with us and I<br>appreciate you for that. So, yeah, thank<br>you.<br>[Music]<br>Ray,<br>I I want to describe to you who's<br>listening right now. And the question I<br>have for you is what is the most<br>important thing that this persona of<br>person should be thinking about at the<br>highest level right now. So the person<br>that's listening is someone who is<br>intent on improving their life. They're<br>they're really interested in business,<br>potentially starting their own business.<br>They they care about where they're<br>investing their their time and energy<br>and also where they're setting up their<br>home based on in terms of geography.<br>They are aspiring to accomplish some<br>goal. They're probably between the age<br>of 18 and 50 predominantly and they are<br>very very interested in understanding<br>what's happening in a world that feels<br>incredibly<br>scary,<br>fast-paced and uncertain at the moment.<br>This is a very difficult question, but<br>if anyone I was going to ask anyone, it<br>would have to be you. What What's one of<br>the first things they should be<br>considering at this moment to safeguard<br>their future, their family, their<br>finances?<br>I don't think it's a difficult question.<br>I um I think it's it's very clear. They<br>have to understand how the life cycle<br>works. Okay? They have to understand it<br>how it works. We were just talking<br>before, you know, in the book and there<br>was the arc of the life cycle, right?<br>And you have to understand that you're<br>on an adventurous journey. Okay? And you<br>have a certain nature.<br>You know, those qualities that ma make<br>you have your preferences and so on. And<br>then you're going after the things that<br>you like and you're learning and it's<br>going to have the ups and downs and so<br>on and how you approach that. So you<br>asked from the higher level if I'm<br>looking down you know like that life<br>cycle that arc what's that journey like<br>how do you approach it you know what are<br>your principles how do you even learn<br>how to approach it that's why we're<br>having these conversations right y<br>so that's clear you know what's your<br>nature how's the journey how do you find<br>the path that's suitable to your nature<br>and then you'll go down that path and<br>you'll discover<br>and you'll evolve. What's that like?<br>That's what they need to know.<br>You said what's your nature? What do you<br>mean by nature?<br>People are born with and then also their<br>environment creates their different<br>nature. You know, we have our<br>preferences, our inclinations. We think<br>in a certain way. You chose to be<br>entrepreneurial. Okay? You're living out<br>your nature. Okay? This isn't for<br>somebody else. You know, some people<br>have a different nature. Okay? They<br>would like to have the stability of a<br>job and clarity and so on. So when you<br>have your nature, you want to know that<br>and then find the path that is going to<br>be good for your nature. Then there's<br>the particular tactical stuff. So if you<br>would ask me, should I be in the UK or<br>should I be in the US? Well, that<br>depends on a lot of things, but that's a<br>tactical question.<br>So if I want to be an entrepreneur and I<br>want to build a technology company, do<br>you think I should be in the UK or the<br>US? I think you should be in the US.<br>Why?<br>The US has a culture of um<br>entrepreneurship, inventiveness. There's<br>a whole different culture like in Europe<br>generally speaking and in and in the UK<br>there's an establishment culture, right?<br>And here um you could be 25, have a blue<br>streak in your hair and have the talent,<br>but if you got the talent to pull it<br>off, you can get the resources and you<br>can be an entrepreneur. It's there's a<br>culture of that. That means that it's<br>happening more. That's why you even see<br>the differences in the economies. Okay,<br>where is the inventiveness really<br>happening? Okay, it's happening here. So<br>I would say if you want to be an<br>entrepreneur, this is an environment<br>that's particularly conducive to being<br>an entrepreneur.<br>So what is your honest perspective about<br>the UK at the moment?<br>The UK has a financial problem. Uh the<br>government has a debt problem and it<br>doesn't have enough money for what it<br>wants to do and what it can do. And so<br>what you see is the nondom problem,<br>people moving and so on so forth. And<br>throughout history, when you have these<br>sorts of things, then there's great<br>clashes in people. Okay? And the UK has<br>been in decline since the war. Even the<br>development of the capital markets, can<br>you raise capital there? All of these<br>things are much worse than they are in<br>the United States.<br>And it leads to clashes. He said,<br>"Of course, you know, there are five big<br>forces that create a big cycle that<br>lasts<br>about 80 years, give or take 50, let's<br>say. And the five big forces are there's<br>a money,<br>debt, economy force, okay? Debts are<br>spending power. So what happens is when<br>you give somebody credit they can spend<br>and then but it also produces debt and<br>debt has to be paid back and so what<br>happens is if there's not enough income<br>to pay back the debt then you have um<br>debt rising relative to income it<br>squeezes out spending people don't want<br>to hold the debt assets and so on the UK<br>has gone through that and has gone<br>through that and it's connected to the<br>second force And we're all going through<br>this in varying degrees. The second<br>force is the internal political and<br>social force. In other words, like<br>between the left and the right with<br>wealth gaps and opportunities gaps. We<br>have big wealth and opportunities gaps.<br>So when you have big wealth and<br>opportunities gaps, there's conflict.<br>Okay? Conflict between the left and the<br>right. And when you get to the situation<br>where you don't believe the system is<br>working for you and you don't trust the<br>system, then there are wars. There are<br>internal conflicts over over that and so<br>on. So the third force is the<br>geopolitical force. In other words, u<br>there's a cycle that usually goes from<br>one big war to another big war. So the<br>last war ended in 194544<br>and we began a new order in 1945. And<br>the way that works is that the winners<br>of the war determine how the world order<br>works. They draw borders. They say<br>here's how it's going to work. And<br>that's the new order. Okay? And that<br>continues until there's a rising power<br>challenging an existing power and the<br>existing world order which typically is<br>deteriorating at that time. And then you<br>have international conflict. Okay, these<br>orders, there's a monetary order, they<br>all break down. There's an in internal<br>political order, they all break down.<br>And and there's a geopolitical order.<br>They all have this conflict and they<br>work together. The fourth force<br>throughout history has been acts of<br>nature. Droughts, floods, and pandemics,<br>for example, have killed more people<br>than wars. And acts of nature, nature<br>has a big effect. And then number five<br>force is man's inventiveness<br>particularly of new technologies.<br>Okay, because if you see that<br>inventiveness that has raised per capita<br>incomes, GDP per capita, any measures of<br>living standards over a period of time<br>and and so on. But it is also related to<br>the first four that I said those four<br>four forces interact. Now when we go<br>back to your UK case, okay, they have a<br>financial problem.<br>they and almost every country now is<br>dealing with more of that internal<br>political problem<br>for the same reasons. Wealth gaps,<br>opportunities gaps, what do we do? Who's<br>got the power? I don't trust the system<br>kind of thing. Okay. Number three is we<br>are certainly in an international great<br>powers conflict, right? And it certainly<br>affects Europe and the UK as we're<br>dealing with not only the Ukraine<br>situation but the Russian situation and<br>what does that mean and that relates to<br>the money thing because okay where's the<br>money coming from to have defense or<br>military expenditures and so on so<br>forth. So that matters right the<br>geopolitical matters climate certainly<br>matters and then of course technology<br>man's inventiveness.<br>So everything could be looked through at<br>through that lens.<br>And so what does this mean for the UK if<br>all other countries are going through<br>this as well? Doesn't that just mean<br>that all countries are going to suffer<br>equally?<br>No. No. No. Because they're not all<br>equal. Okay. Some are more in debt than<br>others. Okay. Some people are more<br>willing to hold their debt than others.<br>Um some means they they have more<br>resources. Some are bigger and more<br>powerful. Some are less powerful.<br>They're different. Okay. They're all go<br>in different conditions. Some countries<br>have surpluses. Some countries, you<br>know, are not in the middle of where<br>there's having a war.<br>Are you optimistic about the the future<br>of the UK at the moment?<br>No,<br>no.<br>Because it has high debt. It has the<br>social internal conflict. It it's<br>affected by the geopolitical factors.<br>And in terms of inventiveness, it<br>doesn't have the culture that other<br>countries have like like the US. Is that<br>Yes. The cult culture and the capital<br>markets to support that at a scale that<br>it needs to be supported to play<br>seriously in the game.<br>And for anyone that doesn't know capital<br>markets mean basically the investor<br>markets is way of saying<br>well I mean it gets you the money. In<br>other words, you're a guy with you know<br>what happens is um<br>we have to enable people. Okay. What<br>what works is finding great people,<br>talented people, and identifying those<br>who you want to bet on and enabling<br>them. And that works. That's the most<br>important force, much more important<br>than money. Okay? Because you could see<br>who's got the money and power and where<br>did they come from? Where did Nvidia<br>come from? Where did where did they all<br>come from? Okay? There are guys like<br>you, entrepreneur in a sense, who's been<br>enabled, okay, by you because you have<br>the talent and people want to bet on you<br>and that's the capital market. So they<br>give you money to help enable you<br>because they want to bet on you and then<br>good things happen.<br>But are you are you optimistic about the<br>United States at the moment?<br>The United States is very much a big<br>picture. No, I think it's very much in<br>this issue there. So, if I go down my<br>list, it definitely has this uh debt<br>money economy problem. We can get into<br>that. Okay. It definitely has the<br>internal conflict power in which there's<br>a fight between the left, you know, the<br>hard left and the right due to wealth<br>and values gaps and people not believing<br>that the system will work for them. And<br>so democracy is at risk because they<br>don't believe this. They they're not<br>going to follow the rules in the sense<br>they don't believe the rules are going<br>to uh number three it's of course the<br>leading one side in this great power<br>conflict of the world right in other<br>words yes between the United States and<br>the one side let's say and China and the<br>allies their allies on the other side. I<br>mean in the news you just saw the<br>meetings of Xi Putin Modi and that group<br>over there walking down you know and<br>okay so now it should be pretty clear<br>how the sides are lining up okay you<br>it's always better to be in a place<br>that's not in one of those wars like<br>stay out of wars um and of course<br>climate has an effect and of course then<br>we have technology the United States and<br>China are in the big technology compet<br>competitions. The others are really not<br>in the game. They don't have the money<br>that this innovation and talent in a<br>sense to play at that scale and so on.<br>So we have a great you know technology<br>war which can be used to create great<br>advances but at the same time could be<br>used for great conflicts. And so now the<br>question is going to be who wins the<br>technology war because the winner of the<br>technology war is going to win all wars.<br>Okay. In other words, they'll win the<br>economic war. They'll win the<br>geopolitical war because technology and<br>I'm not saying anything that hasn't<br>repeated through history.<br>Give me that historical context if you<br>can just for<br>the technology for example nuclear.<br>Yeah.<br>Nuclear<br>won World War II.<br>And and does this cycle go back further<br>than just<br>Oh, no. It goes back I that book. Okay.<br>Um, in order to understand these things,<br>cuz I have to bet on what's going to<br>happen. I'm a global macro investor. I<br>study the last 500 years of history and<br>and it happens over and over again in<br>all cases.<br>So, I could take the British Empire, I<br>could take you through all the empires,<br>the Dutch Empire before that, and all<br>this, and it it it happens uh all the<br>time. I watched your I watched your<br>videos about this and it was truly<br>fascinating how predictable this stuff<br>is and the work that you've done to<br>uncover this trend throughout history. I<br>mean, it's almost for me it was almost<br>irrefutable watching the evidence in in<br>I think it's like a 40-minute video on<br>YouTube where you show how this played<br>out through empires. And it begs the<br>question, you know, because when you<br>live in the United States, when you're<br>when you're in the present time, you<br>almost never assume that the empire<br>you're in could fall. You just don't you<br>don't see how it could happen. We're so<br>strong. We're so great, you know, we're<br>so that doing AI over here, have money<br>over here, everything's good, the sun's<br>shining.<br>It's inconceivable.<br>Of course, people always think that the<br>future would be a slightly modified<br>version of the present, and it's not.<br>Okay. Watch over decades, but it's like<br>watching a person grow.<br>Yeah.<br>Okay.<br>Yeah.<br>You know, you watch your kid or you<br>watch a person at your age, any age, and<br>that's what you see.<br>Yeah. Okay. And you don't see the life<br>arc.<br>Yeah.<br>Okay. But the life arc is in<br>irrefutable.<br>But the U do you think it's conceivable<br>that in the next 50 to 100 years the US<br>could no longer be the dominant power<br>globally?<br>Yeah.<br>Yeah. More than conceivable.<br>More than conceivable.<br>What does what do you mean by more than<br>conceivable?<br>I mean that these evolutions always take<br>place and they take place in a certain<br>way and that um if you look at the<br>probabilities<br>um and the paths and the symptoms<br>there is a challenge the United States<br>is facing a number of those challenges<br>and we're at a moment where Um it's a<br>question of whether the system and<br>the people<br>could can get control<br>of the situations and deal with it<br>strongly and well<br>in a way where they are not<br>fighting to the point of<br>damaging each other and damaging<br>managing the prospects for the future.<br>But I mean, the United States is very<br>innovative. Got all these great<br>innovative companies here. So surely<br>Yeah. But you you can't make<br>generalizations about the United States.<br>And you can't make generalizations, by<br>the way, about the markets either.<br>um what you see is<br>um<br>1% a small percentage 1% of the<br>population if you're looking at the<br>breakdown of incomes and also you're<br>looking at the innovation the stock<br>markets which stocks are doing well who<br>owns those companies and all of that<br>about three million people in a country<br>of uh 330 million people are really<br>unbelievably doing great and you could<br>pick the neighborhoods they're in and<br>what they're doing. And then there's the<br>top 10%, let's say, which is the people<br>around them. And they're really, really<br>doing great in that world. At the same<br>time, the bottom 60%<br>60% of Americans have below a sixth<br>grade reading level.<br>Wow.<br>And that population<br>in terms of um the basics<br>being productive,<br>you have to be productive and be<br>prosperous. So what what you need to<br>have a su successful society is to have<br>broadbased productivity and prosperity.<br>Okay? And that's a problem.<br>Okay? So, which America are you looking<br>at? And are you watching the war that's<br>happening between these?<br>It's a little bit complicated for me as<br>a as a bit of an outsider because I see<br>Trump saying he represents those people,<br>but obviously Trump is a from the<br>billionaire class himself. So, I mean,<br>is he is he a savior for inequality? Is<br>he correcting? I think I think he sees a<br>lot of the problem and he uh I think he<br>sees the debt problem. I think he sees<br>the internal conflict disorder problem<br>and I think he represents<br>uh the red, let's call it the red<br>states. I mean, you look at a map and<br>there's red and blue and you see where<br>they are, okay? And he represents that<br>and they're united behind him in terms<br>of doing some things. Okay? So he<br>represents let's call it the red side<br>which is located where the maps shows<br>red and then there are the blue and and<br>he's um he views himself as somebody who<br>needs to take charge and to do certain<br>things. Others in that population would<br>say those who let's say are not getting<br>are having the food stamp program cut<br>off or having other programs cut off<br>that they're dependent on would say uh<br>wait a second that's not representing<br>me. And so we have gone that population<br>has gone to significant number behind<br>him<br>that are devotees.<br>They're all in. Okay. At the same time<br>as we have the other side which will<br>have their devotees if you know we're in<br>New York City. Okay. And the up upcoming<br>mayoral uh election will be an example<br>of the two sides. Okay. And they will<br>try to use the system but there's a<br>question will the system have enough<br>support to work. Okay. But that's what<br>we have.<br>Just just to close off on this point of<br>the UK in particular, if if you were to<br>try and fix it, what would you be aiming<br>at? I say this because we do have a<br>millionaire exodus that's widely<br>reported in the UK where I think this<br>year we're set to lose 16,000 roughly<br>16,000 millionaires. Um, when you look<br>at the big big countries like China,<br>America, the UAE, the UK, we're losing<br>more millionaires than anybody else. And<br>I was wondering if you think it's<br>fixable and if you were in charge of the<br>UK, what you might aim at first.<br>It's diff, you know,<br>first of all, if you go back to the<br>basic problem,<br>which is there's too much debt,<br>there are deficits,<br>there's differences in<br>education and opportunity levels<br>and so on. The most important thing that<br>you can have<br>is a strong middle.<br>Political middle.<br>Political middle<br>to be analytically strong and also<br>strong enough to get the people to do<br>what needs to be done even if they don't<br>want to do it to get to be productive.<br>Now that's an easy thing to say.<br>It's not an easy thing to do. But you do<br>need that strong middle and you do need<br>to convey to people that you need to<br>have the strong middle to change<br>productivity<br>and you know and are you in it? Are are<br>you in it? Are you patriotic and in it<br>and you know but you look at history how<br>did the United States come to be the<br>United States? People will go to the<br>places that are better than them then<br>stay in the places that worse for them.<br>This is fundamental right<br>incentives.<br>Okay. So you have to make the place<br>better.<br>Okay. Now I would say also you can take<br>pockets and they go into the pocket and<br>let it spread out. But you also have to<br>have this equal education or you know<br>you've got to strive for equal<br>opportunity. But anyway, it's a<br>difficult question that I'm afraid I'm<br>incapable of<br>um solving.<br>It was unnerving to hear the tone of<br>your voice drop when I asked it. You<br>seemed slightly um<br>as if you you've kind of given up on the<br>UK a little bit. Your facial reaction?<br>Well, I'm I'm just a I'm just a I'm a<br>practical guy.<br>I'm a realistic guy. I made my money.<br>I'm in the business and it's my nature<br>to try to be realistic<br>and to bet on how things will transpire.<br>And that's not healthy. The situation in<br>the UK is not healthy. And the situation<br>in the United States is very risky in<br>many ways. It's what we're describing.<br>So, you know, and then if you look where<br>are people going then then you see the<br>places that have the qualities we're<br>talking about. They're civil.<br>They're creative.<br>The people aren't at war with each<br>other.<br>What happens next in history?<br>Well, usually there's a a big fight for<br>control,<br>political revolutions and things like<br>that.<br>the system breaks down<br>because they don't trust the system.<br>So<br>will the legal system resolve that? Will<br>the parliamentary system resolve that<br>these disputes<br>satisfactorily<br>to the satisfaction of those people and<br>the other people who have different<br>points of view and the sides won't<br>believe it. And this goes back<br>this goes back to Rome. It goes back to<br>Caesar,<br>you know, the Senate. And you know this<br>goes back through history all the time,<br>right? And in in the 30s, four major<br>democracies<br>chose to be autocracies. Okay, that<br>happened in Italy, Germany, Spain, and<br>Japan.<br>What's autocracy for anyone that doesn't<br>know the word? Well, it's it means a<br>dictatorship<br>essentially of a limited number of<br>people at the top who are autocratic,<br>which means that they are directing<br>things rather than a democracy<br>in which um there's representatives of<br>all different points of view that get<br>together and follow rules to make<br>decisions.<br>So the UK could become an autocracy as<br>could the US. I guess<br>um you're going to see a lot of pressure<br>for that strong leader who will get<br>control of things and make it work well<br>and will and you're likely to see two<br>different views as to which side, you<br>know, the red and the blue sides, so to<br>speak. You're likely to see that type of<br>clash. You said the US is playing a<br>risky game itself. Is that from a de<br>debt perspective or otherwise<br>from these things? Okay.<br>From the debt, from the internal<br>conflict, from the changing world order,<br>the geopolitical world conflict, you<br>know, I don't know. We're playing with<br>nuclear weapons and, you know, in wars<br>and different places and then of course<br>climate and then the technology war. How<br>we're doing that. Yeah,<br>I saw that image the other day of Putin<br>and um President Xi and China together<br>walking together. If China does become<br>the dominant force in the world, the<br>dominant power does is that a smooth<br>transition? First of all, I don't think<br>either side is going to be the clearly<br>dominant power for for a very long time<br>and and the the quickest way to have it<br>is some kind of a war and that's a<br>dangerous thing and but maybe it evolves<br>hopefully the way the Soviet Union<br>evolved that the the worry of mutually<br>assured destruction<br>keeps everybody not having that kind of<br>war and then what then then the systems<br>one system or another system wins<br>but that's an evolutionary process and<br>you know I can't say and um<br>do you think much about time frames<br>because when I was watching when I was<br>going through the changing world order<br>there seems to be somewhat consistent or<br>predictable time frames when these these<br>transitions happen. Do you think about<br>where we are?<br>Well, they're long-term big cycles.<br>Yeah.<br>Right. It's it's like a life cycle on<br>average they are about a life cycle<br>about 80 years but it's not<br>predetermined just like your life cycle<br>is not predetermined like if you take<br>care of yourself and you you know I<br>don't know smoke eat well exercise and<br>so on so forth then you will probably<br>have a longer life cycle than if you<br>don't take care of yourself and it's um<br>kind of like that you know and so you<br>see them in industry they evolve but you<br>can see the symptoms.<br>Okay, you can see the actions and the<br>symptoms which like taking a physical uh<br>then gives you a sense of where they are<br>in their life cycles.<br>We're 80 years from World War II.<br>80 years from World War II. Yeah.<br>And you're seeing the symptoms.<br>Yeah. Symptoms are clear. They're all in<br>that book. You can see the charts of all<br>the systems.<br>Is it something to be worried about or<br>concerned about<br>if you're in the United States?<br>No I mean, yes.<br>And then the question is how you as an<br>individual handle it.<br>How do I as an individual handle it?<br>Well, first of all, I think I think you<br>have to be aware of the situation and<br>the risks<br>for me and my family though in terms of<br>risks<br>and how I should um counteract those<br>risks. Is it a case of me saving for a<br>rainy day? Is it a<br>That's part of it. Yeah.<br>Um there's a there's a saying in Hong<br>Kong um a Chinese saying which is a<br>smart rabbit has three holes. And what<br>that means is you can see is it the UK<br>or the US and and I can then move to the<br>better place and get out of the place<br>that's a terrible place. So can I<br>successfully be an immigrant or whatever<br>and change my location? throughout<br>history that's been important. So the<br>ability to go to good places and away<br>from bad places. Um so that's part of<br>it. Um secondly,<br>building your financial strength is<br>important which has to do with how you<br>earn, spend and save. That will<br>determine the amount. And then what you<br>do with that amount is invest. And so<br>how you invest<br>uh is also important.<br>So if you have your financial ability<br>and you can make the move and then you<br>have knowledge<br>you know about what's happening<br>so that you can change things. Those are<br>the things you need. So on that first<br>point about a smart rabbit having three<br>holes,<br>is it therefore<br>a better decision at this point in time<br>to not to not buy a house? Because a lot<br>of people end up buying a house and<br>anchors them to to a place and it means<br>that they then have to pay into a<br>mortgage. So a lot of lot of the<br>financial advice most of us have growing<br>up is when you get enough money to buy a<br>house, move in, pay that mortgage for 25<br>years. But if I'm in a new economy, in a<br>new world, and flexibility and the<br>ability to get up and go and move is<br>there's there's uh value to that.<br>The ability to move capital matters. And<br>if you look at history, this has been an<br>important consideration. Yes. So it<br>matters. So if you're nailing yourself<br>down and that's your primary capital and<br>it's nailed down there, then that's does<br>limit your flexibility. And on the point<br>of earning, spending, and saving, wonder<br>what you you're a you're a a father,<br>aren't you?<br>Yeah.<br>What what advice are you giving to your<br>children about earning money in the in<br>the current world, where where they<br>should set up their shop, the skills<br>that are most valuable to acquire, the<br>technologies, the we talked about the US<br>being a place to one of the better<br>places to build your career for all the<br>reasons you described. Well, that's,<br>you know, that's kind of like the<br>particular that you asked me for. That's<br>below the level of the higher level.<br>Okay. The higher level is I have a<br>principle. Make your work and your<br>passion the same thing. And don't forget<br>about the money part.<br>Okay? If you make your work and your<br>passion the same thing so that you're<br>really enjoying your work, you'll have<br>an enjoyable satisfactory life and<br>you'll probably be better at your career<br>that um as a result probably advance and<br>so on. So you have a happier life and<br>you will have a more probably a more<br>successful life. But it is true that the<br>careers that you choose will have<br>financial implications.<br>Mhm.<br>And if you say, "I want to be a poet or<br>something along those lines." You better<br>consider the financial implications of<br>that. That doesn't mean that you have to<br>go make a ton of money because I think<br>that that's I think a lot of people fall<br>into that trap that they think the money<br>is um like vast amounts of money is vast<br>amounts of success. And that's not true.<br>In other words, is your work and your<br>passion the same thing? So, I think that<br>what brings people happiness is<br>meaningful work and meaningful<br>relationships.<br>Okay? If you have meaningful work, you<br>know, that you're into and your, you<br>know, your passion and your work's the<br>same thing. And you have meaningful<br>relationships, whether through that work<br>or beyond, you're going to have probably<br>a great life. Okay? And so, you have to<br>keep that in mind. And it doesn't have<br>much correlation past a certain level of<br>money.<br>Uh it doesn't have much correlation with<br>um that well-being with the amount of<br>money you have. And if you see studies<br>across societies and you'll see that<br>past that certain basic level, there's<br>no correlation between the amount of<br>money they have and how much happiness<br>they have or well-being. Okay? that the<br>highest level of co correlation across<br>societies and studies of happiness and<br>well-being is community. Do you have a<br>sense of community? Do you have those<br>around you who are your community?<br>You'll live longer that way. You'll have<br>a more joyous life and it'll be a better<br>outcome. But anyway, so thinking about<br>those things I think is important<br>based on your life cycle in this book<br>principles your guided journey. create<br>your own principles to get the work and<br>life you want. Do you think you have to<br>play different games in different<br>seasons of your life cycle as it relates<br>to generating wealth? And what I'm<br>talking about here is really like risk<br>profile um or what I should be<br>optimizing for. Should I be should I be<br>trying to hang around with Ray Dalio or<br>should I be focusing on the job that<br>pays me the most?<br>First of all, the answer is yes.<br>And the second question you asked the<br>answer is um that you should be around<br>the the people who are the best people<br>to teach you to operate by the the<br>mentors and the learnings and so on. You<br>should be around the best people and<br>when I say best people I mean people of<br>good character and good capabilities.<br>Okay. And uh so you should be around the<br>best not the job that pays you the most.<br>And I could explain why that is, but and<br>yes, in terms of that arc, you will play<br>it differently at different parts of<br>your life cycle. So in the early part of<br>your life cycle, what you're going to do<br>is I mean the more learning and<br>experiencing is the most important thing<br>that you can do in the learning in the<br>early part of your life cycle.<br>It's like you're going to make your<br>choices. what direction am I going to be<br>in and so on so forth. So learn. Okay,<br>that that's that's most important. And<br>then what you're at the end of your life<br>cycle, you're pretty much relieved from<br>all of that. You're not going to be<br>working to earn, okay? You're going to<br>be free of all of that. You're going to<br>have um and you have freedom of choices<br>and so on. And you're going to be<br>thinking about transitioning. how do I<br>transition well-being or how do I<br>transition my wealth or how do I<br>transition and so on you know that's<br>that's where you are still learning is a<br>joy but at the same time in terms of<br>trying to accomplish it's not the same<br>at your late part of your life cycle as<br>it is in your early part of your life<br>cycle<br>so I want to ask about your early life<br>cycle and what the most important<br>strategic or wealth generating decisions<br>you made that you would encourage<br>encourage everybody to consider if their<br>nature is aligned to yours.<br>Okay. My nature was I hated school. I<br>didn't like the whole thing of<br>remembering this and remembering this<br>and then give it back to me and there<br>were these uh you know history like<br>there's William the Conquer in 1066 and<br>what did he do and you know like all of<br>that was what education represented. And<br>when I was um 12, a kid, I earned money<br>with odd jobs like um I had a paper<br>route and um I mowed lawns and I caddied<br>and I took my cadding money and when I<br>was 12 I got everybody was talking about<br>the stock market. So I put some money in<br>the stock market. I didn't know what I<br>was doing, of course, but I um I picked<br>um the stock that was the only stock I<br>ever heard of that was selling for less<br>than $5 a share. And my reasoning was I<br>could buy more shares, so if it went up,<br>I could make more money. Okay, that was<br>a stupid criteria, but it was a company<br>that was about to go bankrupt. And<br>another company acquired it and it<br>tripled in price. and I said, "I like<br>this game."<br>[Music]<br>So, I got I got hooked on the game. I'm<br>still hooked on the game, right? So, I<br>liked it. Okay. That that affected me.<br>So, I barely got into uh CW Post College<br>and then I went to uh Harvard Business<br>School and that opened my eyes to the<br>world in in many ways because of who<br>were there and what it was like and all<br>that, you know, the best and the<br>brightest kind of thing. But I always<br>still traded markets because I always<br>played the game. I could tell you<br>stories. You want a couple of quick<br>stories?<br>100%.<br>Okay. So, I'm clerking on the floor of<br>the New York Stock Exchange between<br>graduating from college and in the<br>summer between graduating from college<br>and going to uh Harvard Business School.<br>And that is 197 the summer of 1971.<br>Mhm. And on August 15th, 1971,<br>Richard Nixon<br>gets on the television and says<br>that, you know, the promise that that<br>you were going to be able to take your<br>paper money and go get gold, you can't<br>do that and we're not we're going to cut<br>off that off. He didn't say it in<br>exactly those words, but money then was<br>gold and what we think of as paper<br>money, fiat money was claims on the<br>gold. So I walked on the floor of the<br>New York Stock Exchange that summer and<br>I thought the market was going to go<br>down a lot and the market went up a lot<br>and I didn't understand why because I<br>never went through a devaluation before.<br>And I studied history and I found that<br>in March of 1933,<br>Roosevelt got on the radio and made the<br>exact same announcement that you're not<br>going to get your gold and they're going<br>to print the money. And when you print a<br>lot of money, you have that. Okay. So, I<br>learned that history of things that<br>never happened in my lifetime before<br>were important things to understand.<br>Okay. I went back then to Harvard<br>Business School two for two years and<br>and two years later as a result of all<br>the printing of money and the oil shock<br>because of all of that uh we had the in<br>1973 oil shock and now because of my<br>background I'm head hired to be director<br>of commodities at a Wall Street<br>brokerage firm.<br>Okay.<br>Mhm.<br>Which and then all sorts of things<br>happened. Um turbulence and so on so<br>forth. That firm went broke. I went to<br>another firm and I was uh rowdy. I<br>wasn't your typical good employee, you<br>know, follow everything. And uh so I got<br>fired and that was in uh 1975<br>and then I but uh clients all liked me<br>and for things and so they would pay me<br>for advice and I continued to trade the<br>markets and that's when I formed<br>Bridgewwater.<br>Okay.<br>And what<br>that was 1975.<br>I just passed along Bridgewater 50 years<br>later.<br>Yeah.<br>Okay. So there's a journey there that<br>has failures and successes and<br>learnings. You know, I have a principle.<br>Pain plus reflection equals progress.<br>Okay? Your best learnings come from the<br>pain. It's a message. Pay attention.<br>Learn how reality works and how to deal<br>with it differently so you have<br>principles for re dealing with reality<br>better. And I learned that process. And<br>from that process, my company<br>Bridgewwater became the largest hedge<br>fund in the world. Um, extremely<br>successful,<br>managing how much?<br>$150 billion. 1,500 people, $150<br>billion.<br>And that's made you a very wealthy man.<br>And made me a very wealthy man, which by<br>the way was not my intention.<br>Okay. I just wanted to play the game and<br>to have meaningful work and meaningful<br>relationships. That was paramount. But<br>it happened to be the game I played. If<br>you're good at the game, you make a lot<br>of money. And now I'm at a stage in my<br>life where I'm I want to pass things<br>along. I need to pass things along,<br>right? So, hence the books, hence our<br>conversation<br>and here we are. That's the life arc.<br>But I learned a lot. And so that's the<br>journey.<br>I think B2B marketeers keep making this<br>mistake. They're chasing volume instead<br>of quality. And when you try to be seen<br>by more people instead of the right<br>people, all you're doing is making<br>noise. But that noise rarely shifts the<br>needle. And it's often quite expensive.<br>And I know as there was a time in my<br>career where I kept making this mistake<br>that many of you will be making it, too.<br>Eventually, I started posting ads on our<br>show sponsors platform, LinkedIn. And<br>that's when things started to change. I<br>put that change down to a few critical<br>things. One of them being that LinkedIn<br>was then and still is today the platform<br>where decision makers go to not only to<br>think and learn but also to buy. And<br>when you market your business there,<br>you're putting it right in front of<br>people who actually have the power to<br>say yes. And you can target them by job<br>title, industry, and company size. It's<br>simply a sharper way to spend your<br>marketing budget. And if you haven't<br>tried it, how about this? Give LinkedIn<br>ads a try. and I'm going to give you a<br>$100 ad credit to get you started. If<br>you visit linkedin.com/diary,<br>you can claim that right now. That's<br>linkedin.com/diary.<br>Just for context, people don't like<br>talking about money and I understand it,<br>but you're a prolific philanthropist.<br>Also, Google says that your net worth is<br>in the tens of billions of dollars. And<br>I'm sure there's some people that have<br>clicked on this conversation and aren't<br>aware of the scale of wealth you built<br>up and the scale of Bridgewater Capital<br>and how prolific and famous it is in the<br>investing world. In that 50-year life<br>arc, one of the things you mentioned is<br>pain. All of us will encounter pain. And<br>you said pain plus<br>reflection.<br>Reflection equals progress. How have you<br>leared to deal with pain? You've had a<br>lot of pain in all facets of life<br>because you've lived the life arc um and<br>you continue to. How what's the best<br>principle for dealing with pain?<br>First of all, um to calm yourself down<br>and to get centered. Meditation has had<br>a big beneficial effect on my life. We<br>can get into meditation in a minute of<br>how it has. But the ability to, you<br>know, in a sense calm yourself down<br>and when the time is right to reflect on<br>what's happened both to understand how<br>reality works. You know, you want to be<br>a hyper realist. I understand how<br>reality works. Therefore, I need to do<br>this under this set of circumstances,<br>which means developing principles. And<br>so what I did when I would do that<br>anytime whenever I would think what what<br>should I do whether painful or not I<br>would pause reflect<br>on you know what should I do if that<br>happened again and that's how I would<br>write down my principles and what I did<br>was I wrote down a lot of principles<br>a lot of principles<br>a lot of principles if this happens that<br>happens and whatever and then so I wrote<br>these principles down and then I found<br>that in investing<br>um if I can computerize those<br>decision rules I could back test them<br>see how they would have worked and so<br>on. So I built systems, decision-making<br>systems. Um, computer would make<br>decisions. So it was AI before LLMs, but<br>it was AI to have decision-making<br>criteria. So it would be like I I would<br>make a computer chess game that would<br>play while I was playing my mental chess<br>game, what moves we would make. And it's<br>completely automated and so on. But I'm<br>what I'm trying to say is that<br>reflecting on how does reality really<br>work<br>and what do I do when this happens to<br>that happens is the development of<br>principles and that has been invaluable<br>and it also makes me see things<br>differently because a lot of people um<br>and if I didn't do this I would be<br>seeing almost as uh a blizzard of things<br>coming at me<br>instead<br>I see everything as another one of<br>those. So let let's say for example it<br>it's a species. So it's like seeing okay<br>that's what kind of species is it and<br>how do I deal with that species? So it's<br>one of those rather than just a lot of<br>things coming at me.<br>Pattern recognition of<br>Yeah. But but let's say if you think of<br>a it's a duck.<br>Okay. Okay.<br>Oh okay. It's a duck. How do I deal with<br>a duck? Or it's a lion.<br>Okay, how do I deal with a lion?<br>Rather than just a lot of things coming<br>at it. So this principle thinking and<br>seeing it that way had a big effect on<br>the quality of my decision making and<br>and that helped.<br>Two questions I had there is to become a<br>principal thinker I need to do more<br>reflection, right? And then the other<br>think about how does how does the<br>machine how does how does life how do<br>these things work? So that's what I<br>mean. Okay.<br>And to write that down.<br>Uh yeah. Yeah. Write down your thoughts.<br>I find sometimes what I would do is I'd<br>uh dictate them into my iPhone.<br>Okay.<br>Okay. I'd say no. Okay. Ah this is how<br>when you're making a decision. Why did<br>you make that decision?<br>So, not just make a decision, but think<br>about the criteria you're using to make<br>the decision<br>also my emotions, my trauma, my<br>insecurities, my anxiety,<br>right? And and you might say when<br>reflecting on that, is that helpful? Is<br>that harmful?<br>And what do I do about that? Like for<br>example when what you're referring to is<br>yes the um that the motions and the<br>things and all of those um we uh you<br>have to understand that that basically<br>the brain's got two parts to it right it<br>has the logical<br>part of your brain reasonable tries to<br>reason things through and then which is<br>conscious and then it has the<br>subconscious mind which is the<br>subliminal that is really driving you<br>and so when you can reflect okay how are<br>my emotions entering into it what do I<br>you know and so on and you can think and<br>you can align that that's very powerful<br>and meditation by the way naturally does<br>that because what you do when you<br>meditate and maybe a times come I should<br>explain meditation okay how it works um<br>what you do is it's a process process by<br>which you sit quietly and you repeat in<br>your mind what is called a mantra which<br>is a sound that it's a word that has no<br>meaning. Let me say the most classic<br>example of that would be okay. So you're<br>quietly there and you go with your<br>breath you go you know<br>[Music]<br>like that but you need to be taught but<br>anyway I um and so when you're doing<br>that<br>uh because your m is in your mind or<br>your mantra is in your mind you're not<br>able to have other thoughts.<br>You'll see yourself wavering between<br>doing that and staying on the mantra and<br>then having thoughts. Um but what and<br>then you go back to your mantra. When<br>you are uh in the mantra a a lot then it<br>disappears. The sound disappears and you<br>go into your subconscious mind. That's<br>what they call transcending.<br>Transcendental meditation is the type of<br>meditation I do. And so you go there and<br>you're not in a conscious state and<br>you're not in a subcon unconscious<br>state. You're in a conscious state. So<br>it's subconscious state. It's not<br>unconscious is you're sleeping.<br>Conscious is that you're awake like we<br>are. You're in this. So it's a different<br>state. Like if you hear that noise, you<br>would hear that noise. It would be big.<br>Not when you're sleeping. But when<br>you're in your subconscious state, then<br>it's relaxing.<br>uh it's helpful and this process helps<br>to um bring your conscious state and<br>your uncon subconscious state into<br>alignment.<br>In other words, you recognize both and<br>it calms you down. It it's like the<br>ninja in the ninja movies, you know,<br>they're fighting but they it seems in<br>slow motion. The camera shows them in<br>slow motion and they're doing whatever<br>they're doing along that. It kind of<br>makes you in that kind of state of mind<br>so that you're dealing with what's<br>coming at you in that way. And so what<br>you referred to is this um these things<br>that happen and how you deal with those<br>is really important to the quality of<br>your decision-making.<br>How influential was transcendental<br>meditation in your success?<br>Oh, enormously successful. Enormously<br>significant. Ve very very significant.<br>In other words, that way of singing<br>seeing things<br>and how often<br>and and by the way, there's you know<br>there's I I would say say there's a<br>serenity prayer. The serenity prayer is<br>God give me the serenity to accept that<br>which I can't control<br>and give me the power to control that<br>which I can and the wisdom to tell the<br>difference.<br>Okay. And so to how you approach these<br>things, we're talking about reflection.<br>You ask me reflection. Okay? If you can<br>reflect in that quality way, then you<br>deal with anything. And I've I've dealt<br>with uh the worst possible thing. Um I<br>lost a son. Okay? And I would have<br>rather died. I would have rather lost<br>everything to lose my son. So it's the<br>worst possible thing. and and then to<br>see what it did you know the damage and<br>the harm from family terrible. Okay.<br>Then to go through that with meditation<br>with reflection and so on uh was<br>invaluable and people have their own<br>challenges but to be able to do it that<br>way I I really urge your audience I urge<br>you to uh to learn that that's very<br>helpful. How how did that tragedy change<br>your your perspective and your your<br>principles in any way on life on on<br>happiness on success on all these things<br>that you've written about?<br>Well, it's again I you know I go above<br>it and um you reflect on the life arc<br>and I realize at that higher level that<br>that's what the life arc is like. you<br>you'll in in all my books there's this<br>ar um arcing<br>this arcing here's a bigger version of<br>it uh yeah there's this arcing okay I<br>don't know if you're camera sees that<br>okay whatever it is and that's what life<br>and evolution is like to me meaning you<br>make advances<br>you will have setbacks<br>okay if you reflect Well, and you learn<br>how reality works and how you will deal<br>with it,<br>you will get past that and go on. And<br>that's just what it is. That's just the<br>way life is. And if you do that well,<br>then that's your best possible life.<br>Are you religious? Are you a religious<br>person?<br>I'm not religious, but I'm spiritual.<br>Okay. The Dalai Lama who I had the<br>pleasure of meeting told me u and I I<br>agree with um that religions are<br>typically<br>um a mix between superstitions<br>and spirituality. There's half of it is<br>that element that nobody knows but there<br>is<br>the way people should deal with each<br>other. There is karma.<br>Okay. All religions<br>there's the part of them that says do<br>unto others as you would have them do<br>unto you or what goes around comes<br>around and then you get to the<br>particulars. Okay. And it is true<br>that if we work well together<br>that even little things I can do to help<br>you can make a big difference in your<br>life and little things that you can do<br>to help me make a big difference in our<br>lives. And so it's practical and it is<br>also joyous.<br>Okay, that creates a relationship. And<br>we talked earlier about how that<br>meaningful relationship is like the<br>source of great happiness. But when you<br>have a community and you do that, you<br>have a better society. And almost all<br>religions will tell you that there'll be<br>elements of those. And when I believe in<br>spirituality, what I also mean is uh<br>we're all part of this greater hole.<br>Okay? We're all part of the greater<br>hole. And if you could see yourself as<br>part of the greater whole and love the<br>greater whole uh and whatever that is<br>spirituality really okay and so I will<br>go through my life arc okay and I will<br>die and I'm comfortable with that okay<br>in that okay it's all part of the<br>greater whole you know na nature and<br>whatever it is that's true I can't tell<br>you about other things but I do believe<br>in the things I just told you<br>when it comes to living a successful<br>life we've talked about having dreams<br>and understanding your nature and<br>aspiring for things and then<br>understanding reality which<br>transcendental meditation is a great<br>mechanism and vehicle to do um and in<br>your in your book about a successful<br>life you talk about plus determination<br>plus determination<br>hard work<br>if I want to be a successful<br>man or woman, how important do you think<br>hard work is?<br>Well, gives you power. It's very<br>important, right?<br>Some people some people, you know,<br>I'm not saying they want to choose it,<br>but the ir the irony of things is<br>there are first order consequences and<br>there are second order consequences.<br>This is like a rule of life, okay? And<br>most of the time the first order<br>consequences<br>whether they're likable or not<br>has the opposite second quarter second<br>order consequences. What I mean by that<br>is like eating or exercising. Okay, eat<br>the foods you like.<br>Second order consequence is probably not<br>going to be good. um you know I don't<br>want to exercise<br>um second order consequences won't be as<br>good. Okay. Working hard which gives you<br>strength. Where does strength come from?<br>I mean strength comes from working hard.<br>So working hard will will give you<br>power.<br>Power will make things easier and make<br>things better. That's just the way it<br>is.<br>and being open-minded while you do it.<br>Something that was<br>openminded to you.<br>Yeah. I say uh the importance of being<br>open-minded and assertive at the same<br>time. Um I I<br>I watch<br>people becoming so<br>tied to their own opinions like this is<br>the greatest tragedy of mankind.<br>The greatest transgen of mankind because<br>it so easily can be fixed is<br>holding a strong opinion that is wrong<br>that you could have made right<br>better<br>if you were open to learning more. If<br>you would said, "I want to be stress<br>tested. I want my thinking to be stress<br>tested. I want to make sure that I'm<br>making the better decision and so I'll<br>be challenged. But a lot of people view<br>that challenging like a fight.<br>It's not a fight. If somebody holds a<br>different opinion, it should prompt a<br>curiosity.<br>You know, I don't know. Am I wrong or is<br>they wrong? There's a 50% chance. I<br>don't know. Maybe I'm wrong. So, it<br>should prompt curiosity and in exchange<br>to try to make sure that you're seeing<br>the whole picture and so on. But<br>subliminal instincts are I'm going to<br>stick with it and I'm going to have a<br>fight. That's a problem<br>because there's too much on the line for<br>so many people to<br>it's subliminal. It's it's it just goes<br>back to the mind thinking that the<br>intellectual challenge is a fight and<br>it's egotistical. You know, ego,<br>I must be right.<br>As an as an investor and entrepreneur,<br>that's obviously particularly important<br>because you're constantly dealing with<br>your information and feedback, which you<br>need to be flexible. That was one of the<br>two things that changed my<br>uh my my my whole direction and made me<br>successful. I I can explain it if you<br>want.<br>Please.<br>19<br>79 and 80<br>I had calculated that American banks had<br>lent more money to foreign countries<br>that they were going to be able to pay<br>back and that we were going to have a<br>debt crisis.<br>Very controversial point of view. In<br>August of<br>1982,<br>Mexico defaulted on its debts and over<br>the next decade, many other countries<br>did and it caused bank problems.<br>However, at that time, I thought things<br>were going to get bad and that was the<br>exact bottom in the stock market, August<br>1982.<br>So, I couldn't have been more wrong.<br>I lost money for me. I lost money for<br>the clients. I lost money. I was so<br>broke that I had to borrow $4,000 from<br>my dad to help to pay for family bills<br>because I was faced with the choice.<br>What am I going to do? And and do I do I<br>go back to work on Wall Street, get a uh<br>tie, get on the train, and go back that<br>which is again not in my nature or<br>whatever. And and two things changed me.<br>Okay, reflection.<br>First of all,<br>um, I learned what we were just talking<br>about. I learned humility and fear of<br>being wrong and open-mindedness.<br>So, I wanted the smartest people who<br>could I could find to stress test my<br>opinions because I'm always realized I<br>could be wrong. And then I learned how<br>to diversify my bets so that I could<br>dramatically reduce my risk without<br>reducing my returns. Okay, that was the<br>bottom. Okay, from that point all the<br>way over that following those principles<br>took me to the biggest hedge fund in the<br>world, the most successful and so on<br>because I applied it to the markets,<br>applied it to what we did and so on. So<br>that notion of reflection and then how<br>do you deal with what reality is like<br>and then you know okay the learn learn<br>radical open-mindedness in other words<br>and like there's a principle in the book<br>you have to take in before you put out<br>or that um decision making is a two-step<br>process first take in then decide. Okay.<br>So, yes, open-mindedness.<br>You don't doesn't in any way minimize<br>your ability to decide. So, you still<br>have the freedom to decide, but it's<br>crazy not to be open-minded.<br>You recognize that the biggest threat to<br>good decision-m is harmful emotions. And<br>that two-step process is first learn and<br>then make the decision. Which is funny<br>because it sounds simple, but when you<br>said it, I think about all the worst<br>decisions I've ever made in business.<br>And I missed step one.<br>I forgot to I forgot to take a minute<br>and do the evidence gathering or the<br>like information gathering process.<br>Yeah, just smart people who care about<br>your decision say stress test me.<br>Why don't we do that?<br>That ego<br>and also instinct that that's a fight.<br>Is there any advice you would give me on<br>becoming a better decision maker? So I<br>have a fund, I have many businesses. Is<br>there any sort of practical<br>simple foundations of becoming a better<br>decision maker that we haven't talked<br>about? Get smart people to interrogate<br>my thinking. Um, be open-minded.<br>I think we've talked about almost all of<br>them. Um, I think then you have to then<br>know about how to leverage yourself.<br>Okay. In other words, as you do more and<br>more,<br>uh, how do you do more and more when<br>your brain has a capacity limit, okay,<br>and there's only certain number of hours<br>in the day or the week, okay, you have<br>to know how to do that.<br>Is that focus or is that something?<br>No, no,<br>no.<br>It's knowing how to do it through<br>others.<br>Okay. It's knowing how to pick others<br>and orchestrate. Well, it's like uh<br>running a symphony or whatever. Okay.<br>get the best players.<br>Okay, when I say uh you know um good<br>character and good capabilities and<br>orchestrate them well and then provide<br>that um that leverage like uh um when I<br>was doing the most I had 30 direct<br>reports<br>whatever the number is. So uh it the<br>process is how to get more out of a<br>minute or a day,<br>not how to work harder, okay? It's how<br>to leverage yourself. And you're going<br>to leverage yourself by picking the<br>right people who you can trust. They're<br>not going to screw you. They're going to<br>operate in your interest and they're<br>going to be capable. And so a lot of<br>people what you can do is you can deal<br>with them and then you can say like I I<br>would deal with them on this 30 reports.<br>I'd have maybe um an hour meeting with<br>them once every two weeks and and they<br>go off and do things. And when you do<br>that you can even find people who are<br>much better at things than you would be<br>if you did them. Because if you have<br>these different things, okay, you better<br>because otherwise you don't have the<br>capacity.<br>You have these two key challenges to to<br>overcome as an entrepreneur, which is<br>find these great capable people that<br>have great character and then like bind<br>them with the right culture to make sure<br>that they do the best work,<br>right? And and in other words, it's<br>meaningful work and meaningful<br>relationships<br>through radical truthfulness and radical<br>transparency.<br>Radical truthfulness and transparency.<br>Okay. First, if you can have um<br>meaningful work and meaningful<br>relationships, the people are on the<br>mission with you.<br>Wow, that's fantastic. But<br>you you better be truthful and<br>transparent. That'll show that you're<br>honest and you better because you have<br>to get a truth including what people are<br>bad at and how to deal with all those<br>things<br>and and most people hide them.<br>They don't bring them out into the open.<br>Okay, they everybody's worried about<br>hurting each other's feelings or you<br>know uh that and then so they're not<br>honest with each other and and they're<br>that's the barrier you we talked about<br>the barrier of disagreement there's it's<br>like that okay um you know uh I don't<br>know are you good at that or you're<br>striking out if you're striking out and<br>what is it how do we deal with it you<br>better talk about that clearly because<br>you need to have an a team of players<br>you know you have to work yourself so<br>your team is an A team of players who<br>are tight.<br>How did you do that at Bridgewater? How<br>did you make people honest?<br>Oh, well uh f first of all um I had a<br>policy talk behind another person's back<br>um critically. That happens three times,<br>you're out. And then I would have<br>radical transparency so everybody could<br>see everything. So you could see why I'm<br>making decisions and I would reflect.<br>But the main thing is you know you know<br>if it's happening or not. Okay. And I<br>made that comfortable<br>because that's ordinarily uncomfortable.<br>We talked about the fact that there's an<br>intellectual you and there's an<br>emotional subliminal you. Okay. I made<br>them understand like if I had a team a<br>football team<br>and so on that this is going to be<br>better for the team. is going to be<br>better for you and you'll have your<br>evolution because what do you want to<br>have dishonesty? Do you want people to<br>think one thing about you and really say<br>something different?<br>How is that going to work? So there's an<br>intellectual<br>okay we believe it and then also by<br>having the meaningful relationships. I<br>mean I'm not I don't force them. I<br>create a culture of meaningful<br>relationships so that they have known<br>each other for a long time. They go go<br>to each other's parties or they go to<br>each other's<br>there are funerals. There are baby<br>showers. There are these things. Not<br>that anybody's f I created uh clubs. I<br>said, "Any club that you want to create<br>that has more than uh 20 people um<br>whatever it is up to $500 per half." So,<br>so I don't care what it is. If it's play<br>softball or play chess or whatever it is<br>that you're enjoying each other's<br>company or you want to go to ball games<br>or something, I don't care what it is.<br>I'll pay for half up to that up to $500.<br>So I to nobody has obligations to or<br>something but if I have that kind of<br>meaningful relationships so you can talk<br>honestly with each other uh I found that<br>very helpful<br>and you've built a famously built an<br>idea meritocracy which in my<br>understanding means where the best idea<br>ends up winning in the company versus<br>just your idea because you're the most<br>powerful person in the business<br>right I mean I want what do I want I<br>want the best idea to win This sounds<br>simple but but again it's it's not how<br>businesses operate. One of the<br>fascinations I've always had is that<br>when businesses get bigger and they have<br>more intellectual horsepower by I mean<br>if you just added up how many brains<br>they had they sometimes get less<br>innovative and it it feels like the the<br>CEO<br>well because they become more more<br>bureaucratic and more fragmented.<br>Yeah.<br>Okay. There's um I found it to be true<br>and it's wellestablished fact that if<br>you get a group of people past a certain<br>size which is 75 to 100 people<br>um they don't know each other. Okay,<br>they they they start to become different<br>and then you lose those relationships.<br>You lose a lot and so on. I found it<br>because uh um at the holiday season<br>every year, what I would do is I would<br>write everybody<br>notes, long notes in their cards and I<br>would pick an individualized holiday<br>gift for them. And when it got to be to<br>67 people, I remember the year, it broke<br>my back. I mean, I I just couldn't do<br>it. Okay. And I realized that at that<br>point I was<br>going into another frame. Okay. And so<br>it's a organizational reality that you<br>can keep that group and then what you<br>have to do is then you have different<br>those different areas and you have to<br>create cohesiveness between those<br>different and cohesiveness common<br>mission and how do you do that between<br>that. So, like for example, when we<br>would have our holiday party where it<br>used to be everybody would be, you know,<br>sort of go in and you have a holiday<br>party and everybody together, what I<br>found out is we had a big arena that we<br>would uh go to and I'd have both. I'd<br>have okay um that department is in that<br>area and whatever and then they come out<br>and they all mingle together and so on.<br>So there's an organizational<br>thing that you've got to realize in<br>terms of culture and and management of<br>that.<br>It's like villages in a city I guess<br>like yeah you basically keep build the<br>villages and then<br>good example city. Interesting. Okay.<br>Yeah. Our media company's at that exact<br>point now. It's at it's at that 90 90<br>odd people.<br>Okay. There you are.<br>So when you said 75 to 100 I was like ah<br>interesting.<br>Yeah. I was thinking about all the<br>things I should be doing now to<br>counteract some of those adverse effects<br>of the culture splintering or<br>relationships breaking down. But I guess<br>you've described it there. Uh<br>interesting. And I have to say one of<br>the things I found to be most I'm 33<br>years old. I just turned 33 last week.<br>It's crazy how<br>how often people say that hiring is the<br>most important thing. Yet when you look<br>at how what entrepreneurs are spending<br>their time on, it's usually like the<br>product, the marketing, etc. and it's<br>maybe like one or two hours in some<br>cases if they're lucky on finding truly<br>exceptional people. They often just<br>outsource it to someone else, the<br>recruitment team. When you think back<br>through your career, how important was<br>it to find truly exceptional people?<br>Of course. Well, I systemized it first<br>of all. Um I think that anything I do or<br>one does can be systemized. So I would<br>think what are the personalities, what<br>are the backgrounds of the people that<br>I'm hiring, what are the choices, how do<br>I specify it? And I've and I got it by<br>also maintaining a lot of data with<br>people. There's um there's a TED talk I<br>did that uh explains how like data uh<br>everybody's going around and they're<br>operating in a certain way. So I know<br>what people are like. If you know what<br>people are like, you know what you can<br>expect of them. And then I would then<br>say uh in a very data way, those people<br>who are successful in these jobs have<br>the following attributes<br>that would create a job specifications<br>for that type of job. So I I knew that<br>in that type of job there would be that<br>type of person I'm looking for.<br>Okay. what works they work okay data and<br>then I would find that would be my job<br>spec and and so we had the systems and<br>then we had some people who are<br>responsible for doing that because<br>you're right it takes time how can I<br>interview all those people and so on but<br>who can you trust and you're operating<br>that way and then evaluation process<br>doesn't stop when you hire them okay the<br>valuation process continues from that<br>moment and you still learn more about<br>what they're like and you do that same<br>process and still think would I still<br>have hired them and and if I wouldn't<br>have hired them you know in the first<br>place then they shouldn't be there and<br>so I have a process and people people in<br>process<br>do people change after a certain point<br>so if you've hired someone in six months<br>and 12 months and they haven't changed<br>is it worth giving them another year is<br>it worth a performance review<br>I found out that<br>for me the big question mostly there<br>were two big questions but um the big<br>question is how do you adapt to my<br>culture<br>and that would take about 18 months to<br>find out like can you speak honestly<br>about what can we have thoughtful<br>disagreement do you like this<br>evolutionary process where you're<br>challenged and all of this kind of thing<br>that culture that' take about 18 months<br>and then roughly speaking then learning<br>about the people their strengths and<br>weaknesses<br>would take 18 months two two years maybe<br>something along those lines and so then<br>you know you could pretty much decide<br>but always being open every day by day<br>so nobody's surprised that you're always<br>talking about things you know how's it<br>going<br>make sure you keep what I'm about to say<br>to yourself I'm inviting 10,000 of you<br>to come even deeper into the diary of a<br>CEO. Welcome to my inner circle. This is<br>a brand new private community that I'm<br>launching to the world. We have so many<br>incredible things that happen that you<br>are never shown. We have the briefs that<br>are on my iPad when I'm recording the<br>conversation. We have clips we've never<br>released. We have behind the scenes<br>conversations with the guest and also<br>the episodes that we've never ever<br>released and so much more. In the<br>circle, you'll have direct access to me.<br>You can tell us what you want this show<br>to be, who you want us to interview, and<br>the types of conversations you would<br>love us to have. But remember, for now,<br>we're only inviting the first 10,000<br>people that join before it closes. So,<br>if you want to join our private closed<br>community, head to the link in the<br>description below or go to<br>daccircle.com.<br>It's a really interesting time to be<br>leading a business. 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And you can tap into<br>tomorrow's talent at fiverr.com/diary.<br>And for 10% off your first order, use<br>code diary. AI is um a bit of an alien<br>that seems to have entered the room um<br>and has is going to change more almost<br>every every industry. Great.<br>Yeah.<br>I can't tell if you're being sarcastic.<br>No. Truly, if you are um working with<br>it, controlling it, if it's a good<br>partner to be able to get a lot of<br>leverage, it's truly fantastic. As I<br>said in almost everything I did, we had<br>the criteria, we had the systemized.<br>Would you do that? Would you not do<br>that? How do you know how does reality<br>work? What are the principles? And and<br>so it's a fantastic leveraging like I<br>described. You know, I would make the<br>decision-making model like the computer<br>chess game that would make it. Well, now<br>it's better than uh ever those those<br>resources. So it leverages you<br>enormously.<br>What about having a strong middle? We<br>talked about having the strong sort of<br>economic political middle.<br>Political middle. Yeah. Yeah.<br>Is it going to drive inequality?<br>Yes. It's going that's like all good<br>like all things. going to be um it has<br>good things and bad things and we were<br>talking let's say first about managing<br>and doing that I think in managing and<br>knowing what people are like and how<br>they're all it's going to be very<br>valuable<br>mostly very valuable in terms of<br>changing um there'll be uh a limited<br>number of winners and a bunch of losers<br>and um I think it's going to create much<br>greater polarity which as we're seeing<br>um through the system the ways that we<br>talked about you know that top 1 to 10%<br>benefiting a lot and that you know so<br>that will be a dividing<br>uh force I think<br>it's got to got to pose the question<br>with robotics accelerating at the speed<br>of of light with optimist and Tesla and<br>all the things they're doing and all<br>these other companies humanoid robots<br>and then with artificial intelligence<br>having trillions of dollars plowed into<br>it and accelerating. We're in this crazy<br>boom at the moment. With these two<br>things combining, you're going to be<br>able to have a humanoid robot who that<br>can navigate human spaces, but is also<br>smarter than I am. Lawyers, accountants,<br>uh lots of people in the medical<br>profession. Why would you why would one<br>need them if we had a humanoid robot<br>that is smarter than all of us and has a<br>PhD and everything? Well, we will not<br>need a lot of those jobs for the reasons<br>that you're saying. Okay. And then the<br>question is what our society does<br>and what do you think we do in such a<br>world?<br>I think we fight over about what we do<br>unfortunately. Um<br>but as I say I I don't think we have<br>escaped a world where most people to<br>have a healthy society most people have<br>to be productive<br>and prosperous. I don't I I think people<br>need to be now certainly there and there<br>certainly needs to be a redistribution<br>policy. I don't think that's just a<br>redistribution of money policy because<br>uselessness and money may not be a great<br>combination.<br>So I think that you have that has to be<br>figured out and the question is whether<br>we're too fragmented to figure that out<br>and agree on it and I'm worried about<br>that.<br>Interesting times. Is there any<br>historical precedence for this in your<br>view? Someone that knows history. Is<br>there any historical precedence for<br>something like AI and robotics<br>converging?<br>Well, um<br>through<br>um evolution,<br>we have gone from a period of time which<br>was called the dark ages or the<br>agricultural age in which um basically<br>there was land. it's agricultural and so<br>on and people were treated they were<br>essentially like oxen most people and<br>then there were the landowners who were<br>the nobles and then there were the<br>royalty who uh were the families that<br>control most things and so on and then<br>in history with the uh invention of the<br>printing press there became more<br>knowledge<br>um uh more intelligence and we see an<br>evolution in which um you start to see<br>new ages emerge and thinking emerge and<br>power change and I won't take you<br>through the whole history but you start<br>to see that individuals can be clever<br>enough to earn money that so you begin<br>the age of exploration and the<br>industrial revolutions in which machines<br>replaced people and it's almost like<br>they first replaced them physically that<br>um in other words they didn't have they<br>were not like oxen doing the thing so<br>you get a tractor or something and and<br>it's almost like from the body up in<br>terms of the mind and so you've seen<br>that evolution through time and the rise<br>of intelligence in its various forms go<br>through this arc of rising in<br>intelligence and now you see that<br>intelligence<br>matters more than anything. Okay? It<br>matters more than money. It matters more<br>than anything because intelligence will<br>attract people among those with money to<br>invest in them in the development of<br>that. And so we have seen this arc<br>through history develop in that way,<br>right? And we've seen people replaced.<br>Now the question is as we get higher and<br>higher in thinking, okay, whether we've<br>run out of capacity to shift or whether<br>we're just going to be totally replaced.<br>Our muscles have been totally replaced,<br>but okay, as this is happening, our best<br>thinking may be totally replaced and<br>we're going to have to deal with that<br>question.<br>Are you hopeful?<br>I'm excited.<br>I'm<br>I think it all comes down to human<br>nature. Okay. I'm excited in that.<br>Fast forward, make the most of it, jump<br>on it. Woo! You know, I'm excited. I've<br>also watched uh the evolution of<br>species.<br>Almost all species have come and gone<br>for certain reasons and they uh one of<br>the reasons that they come have come and<br>gone is because almost their strengths<br>are not in all respects great strengths.<br>you can use these things, intelligence<br>to your detriment.<br>And I believe that um the things that<br>these technologies and so on bring us<br>while very important, it extends life<br>expectancy and all of that<br>is not import as important as human<br>nature.<br>And so if you were to go back in time<br>and we're at different societies, do you<br>have happier societies? Is the<br>well-being greater?<br>Okay. So you can go 50 years ago and you<br>might say the well-being is greater 50<br>years ago. Not in all ways, not in in<br>many ways the technologies and the<br>consequences of those are much better,<br>but you may have had a better life. And<br>it's human nature of how people are<br>going to deal with each other. So I<br>think the real question is can people<br>rise above<br>this and and which it goes back to the<br>spirituality question. Can people then<br>rise above it so that they think of the<br>collective good and they think of you<br>know collectively how do we make the<br>best and also karma you know in other<br>words um the realization that if I help<br>you in ways that can be so simple for me<br>to help you make such a big difference<br>in your life and you do the same and we<br>have win-win relationships it'll be good<br>but if we don't do that And I worry<br>about human nature and I worry about<br>this process,<br>especially when you've got geopolitical<br>tensions. And<br>it's because of human nature.<br>I've had a lot of conversations on the<br>podcast about AI and I just can't seem<br>to get to my own solid conclusion about<br>this because when I look at human<br>nature, as you say, I see greed, I see<br>power, hunger, status.<br>Yeah. Some problems you just just accept<br>the fact that you may not be able to be<br>confident about a prediction in the<br>future. So, it'll always be a question<br>and just get on with the fact of using<br>it for yourself in the best way that<br>works for you.<br>That's what I'm doing. We have a closing<br>tradition on this podcast where the last<br>leaves a question for the next not<br>knowing who they're leaving it for. You<br>know this person um because I've seen<br>you with them. Um the question they left<br>for you is what is a book or books that<br>you've recommended or gifted more than<br>others and why? can't say your own but<br>right<br>um there are three books<br>there's a book on evolution written by<br>Richard Dawkins<br>uh river from<br>Eden I think it's called then a book by<br>um<br>Will and Ariel Durant which are the<br>maybe the greatest historians<br>in time and it's called lessons from<br>history it's a very short book. I think<br>it's 104 pages. They wrote massive<br>amounts about 5,000 years of history and<br>so on. And they sort of condense their<br>lessons, lessons from history.<br>And then um<br>Joseph Campbell's The Hero's Journey.<br>Is it the the hero with a thousand<br>faces?<br>Yes, that's it.<br>Hero with a thousand faces.<br>And why Dawkins book? Why did you say<br>that one? Oh, he understands evolution.<br>Everything is evolving. Okay. All<br>species. Man is one of 10,000 species.<br>I mean, and they're and they're all<br>structured similarly. There's a<br>structure. They they you know, like um<br>two eyes, a brain that has a structure<br>to it. Um that and the same parts of the<br>brain. There's the cereum, the<br>cerebellum, the prefrontal cortex.<br>there's this structure that makes you<br>think differently and and so on. There's<br>evolution. There's all evolution. So,<br>it's not just limited to um human<br>evolution or what humans are like. It's<br>the force of evolution. Man is only um<br>mankind's only about 200,000 years old.<br>That's in history that's short.<br>Okay. And and the species and all<br>species evolve. Okay. And it's very<br>interesting. So that's And you know<br>that's what his books are about and you<br>know I think they're very good<br>and Joseph Campbell's the hero's journey<br>the hero with it's it's about human<br>nature and and the evolution of life and<br>the life journey that we're talking<br>about.<br>What I find so interesting Ray is how<br>you draw on principles from other<br>domains whether it's from nature or<br>biology as you were talking about there<br>to tie into your work in business and<br>investing and everything else and life<br>and happiness. And it really says<br>something to me about<br>being more eclectic and be broadly<br>curious in order to be successful in my<br>more<br>narrative. Yeah. I just see I I don't Is<br>that to me maybe too much of a<br>specialist kind of mentality but the<br>world is being interrelated to these<br>things if you want to understand how<br>reality works. Um you can't say I'm<br>going to be just a specialist.<br>I mean these are all affected by each<br>other.<br>Thank you so much for write writing<br>these books. They are iconic and uh the<br>YouTube videos that explain these these<br>books are iconic. I don't know who you<br>have on your team that makes the<br>animations and pulls it all together.<br>But not only is the content so important<br>because they are principles, so they're<br>enduring through time, but they're so<br>unbelievably accessible to all people of<br>all ages. And if if you if people<br>haven't read this book, I'd be shocked.<br>But um all of these books are fantastic.<br>The this book, Principles by Ray Dalia,<br>which I'm going to link all of them<br>below for anyone that wants to read<br>them. I suggest you read them all, um<br>will be formative in your life, even if<br>you're not interested in business or<br>investing because as as it says on the<br>book, they're principles and the the<br>economy affects us all in ways that we<br>might not understand. We're all trying<br>to be successful or happy in our own<br>right. And that that's interwoven into<br>all of these books. So, thank you. I<br>hope you write more books. Well, and<br>thank you because yeah, I'm at a stage<br>in my life, this is a symbiotic<br>relationship otherwise we wouldn't be<br>here. Okay. And my um my benefit is that<br>I want to pass along these things and<br>we're doing it together. And I have<br>found and it's joyous to me to know that<br>these things have made a big difference<br>in people's lives. People come up to me<br>and they say, "Thank you for the<br>difference you've made." And you know,<br>at this stage in my life, that's what I<br>want to do.<br>I think that's an understatement. I<br>think it's had a profound impact. In<br>fact, every person I know, all of my<br>best friends have taken something from<br>your work which has had a profound<br>impact on their decision-m which has led<br>them to be happier in some way. And when<br>I told my friends that I was<br>interviewing you, I'm interviewing 16<br>people while I'm in New York over the<br>over the next month. When I told my<br>friends, my best friends in the world,<br>that I'm interviewing you, all of them<br>were telling me to pass on a message of<br>thanks because there's something in one<br>of these books that's helped them. And<br>they're all young people in that first<br>season of their life. And there's<br>there's something in all of these books<br>that's um pushed them closer to their<br>success and their happiness. So, thank<br>you for on behalf of me because you've<br>had a profound impact on me. But thank<br>you.<br>Thank you for giving me that joy.<br>You know that. Thank you.<br>I really really mean that. Thank you so<br>much, Ray.<br>[Music]