#23 Ray Dalio: Life Lessons from a Self-Made Billionaire

**Shane Parrish** (0:08)
Welcome to The Knowledge Project. I'm your host, Shane Parrish, the curator behind the Farnham Street Blog, which is an online community focused on mastering the best of what other people have already figured out.
The Knowledge Project is a place where we look at interesting people, ideas, and uncover frameworks to make better decisions, live life, and understand reality. On this episode, I have Ray Dalio. Ray is the founder, chair, and co-chief investment officer of Bridgewater Associates. Bridgewater started out of a two-bedroom apartment in New York in 1975 and has grown into the largest hedge fund in the world and one of the most important private companies in the United States. As you'll hear from this conversation, this was no fluke. We talk about why Ray punched his boss in the face, his principles for living and work, the nuances of Bridgewater's culture, technology, why so few people deal with reality, mental models, how to build an idea of meritocracy, and how to make better decisions. And there's so much more. Intellectually, Ray's answers will cause you to question why things aren't more like this. They might just change the way you live. I hope you enjoy this conversation as much as I did.
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Ray, thank you so much for agreeing to this interview.

**Ray Dalio** (2:28)
I'm thrilled to be here.

**Shane Parrish** (2:29)
I want to start with the story of you punching your boss in the face. Can you tell me a little bit about that?

**Ray Dalio** (2:36)
Well, he and I were drunk on New Year's Eve.
We had this playful, fun, challenging relationships, and I decked him and he crashed the car when he went home, and his wife chewed him out, and I figured that I was going to lose my job. Then he came in the next day or the day after with a black eye, and he had no problem with me. He said, hey, listen, that was what it was like. It was a moment and it was fun, and I had a lousy New Year's Eve, but no hard feelings, and we got past that. Why are you interested?

**Shane Parrish** (3:23)
Oh, I'm interested in that story because it's the story that everybody talks about, but nobody really knows a lot of the details behind. I mean, it's something you've released before.

**Ray Dalio** (3:32)
I was at a certain age and I had a certain spirit, I would say, I don't know what you'd call it, but I was a little bit wild at the time. And anyway, it's interesting to evolve.

**Shane Parrish** (3:52)
Tell me what a day looks like for a typical day, if there is one for the world's largest hedge fund manager.

**Ray Dalio** (4:00)
Well, I wake up and immediately check what the markets and the news are doing. And then I was in a stage where I used to run the company and then deal with the market simultaneously. So I was juggling both things.
Now I'm at a stage where I'm just following the markets and the economics. It's not a fast-paced type of existence. It's more of a thoughtful type of existence. So I've got a group of brilliant people. I come in. We usually hit a big meeting.
It'll usually be a research meeting. We're examining something that is happening. Everything happens over and over again. Everything we think of this as everything's another one of those. So by being able to look at history and make the connections and examine how the mechanics of the cause-effect relationships are, that's what we spend a lot of time doing. And then we convert those rules, those principles into algorithms. So through the day, I'm doing that mostly and reflecting mostly on the markets with interesting people. And we debate a lot.