What is Avid Weekly Ideas?
Each week I publish an idea or two either from a book I am currently reading or from my backlog of book notes. 📚
Of course, this isn’t intended to replace book notes or reading the book itself. Instead the aim is to extract a key idea or two from a book that struck me as insightful and share-worthy. Then I package it into a bite-sized digestible chunk. I hope these little nuggets of insight will spark some inspiration or ideas in your own mind. 💡
Life is Complicated
One aspect of life that always struck me as fascinating is the fact that we are born with no “operating manual.”
Imagine if you bought IKEA furniture and there was no manual showing you how to assemble it…that would be a challenge wouldn’t it? Or at least it would make your life at that point unnecessarily difficult.
Yet human life on earth is vastly more complicated, and here we are without any operating manual.
A small tangent to the main point of this article: but if you are interested here is Jordan Peterson articulating so well the complexity of reality.
Which leads me to today’s book of focus.
Ray Dalio on Principles
Since going through life can be crazy at times (there is no map nor manual you’re born with) what are we to do?
The core thesis of his book is that the closest thing to having an “operating manual” is by acquiring principles throughout your life and applying them constantly to the vast amount of situations and decisions that you will inevitably face throughout your life.
So what are principles?
Principles are effective ways of dealing with reality.
Dalio calls them fundamental truths that can be applied again and again in similar situations to help you achieve your goals.
You might know them by other names such as mental models, axioms or laws (not so much in the legal sense of the word).
A life with no principles
Dalio uses the metaphor of a blizzard to represent the constant barrage of problems and issues that life constantly throws at us.
Every day, each of us is faced with a blizzard of situations we must respond to. Without principles we would be forced to react to all the things life throws at us individually, as if we were experiencing each of them for the first time.
A life with no principles is a recipe for getting buried under the force of the blizzard.
Tell-tale signs of this are if you feel like you are constantly busy, lacking energy or perpetually overwhelmed and frustrated.
He goes on to describe a better way and emphasizes that all successful people operate by principles:
If instead we classify these situations into types and have good principles for dealing with them, we will make better decisions more quickly and have better lives as a result. Having a good set of principles is like having a good collection of recipes for success. All successful people operate by principles that help them be successful, though what they choose to be successful at varies enormously, so their principles vary.
Navigating through the blizzard
Life carries us forward through time and each day we have “encounters with reality that require us to make decisions.” We cannot stop time from flowing forward and we cannot avoid these encounters. The only thing we can do is to approach them in the best possible way.
And that is what acquiring principles is all about. To help you navigate through life as best you can.
Okay let’s get into more detail! 😊
After establishing the importance of having principles so as to not live life blind with no map, Dalio spends two-thirds of the book listing out specific principles he has acquired throughout his life.
He broadly breaks them up into Life Principles (Part II of the book) and Work Principles (Part III of the book).
The book is quite long so I will mainly focus on just a few principles that particularly resonated with me.
“Another one of those”
This is one of the key points Dalio stresses upon throughout his book and in many of his interviews.
You need to develop the ability to look at things from a higher level.
To take a step back and see most things for what they are, that is, just “another one of those.”
What that means is every problem you face, every new situation you come across, don’t just make the mistake of approaching it as a new or novel experience – as though you are the first person in the world who has experienced this.
For example let’s say you are facing one of these situations.
- An upcoming job interview
- An exam to study for
- Financial difficulty
- Struggling to buy your first home
- Unable to decide on what stocks to invest in
- Finding a life partner
- And the list can go on endlessly…
Do you think you are the first human to have faced such problems? Of course not.
The point is, just about any problem you have faced in your day-to-day life has been faced by many other humans, at present or throughout history.
Another quick tangent: Here is an apt passage on this point from Ecclesiastes 1, as written by “the Teacher.”
Looking from a higher level
As I look back on my experiences, it’s interesting to reflect on how my perspectives have changed.
When I started out, each and every twist and turn I encountered, whether in the markets or in my life in general, looked really big and dramatic up close, like unique life-or-death experiences that were coming at me fast.
With time and experience, I came to see each encounter as “another one of those” that I could approach more calmly and analytically, like a biologist might approach an encounter with a threatening creature in the jungle: first identifying its species and then, drawing on his prior knowledge about its expected behaviors, reacting appropriately.
One tip from Dalio is to have a healthy respect for history and draw from the lessons of the past.
When I was faced with types of situations I had encountered before, I drew on the principles I had learned for dealing with them. But when I ran into ones I hadn’t seen before, I would be painfully surprised. Studying all those painful first-time encounters, I learned that even if they hadn’t happened to me, most of them had happened to other people in other times and places, which gave me a healthy respect for history, a hunger to have a universal understanding of how reality works, and the desire to build timeless and universal principles for dealing with it.
Work on your machine
This was one of my favorite ideas from the book. Though this is in the section of the book on work principles, I feel that it is just as applicable in your personal life.
It is the idea of working inside a machine versus working on a machine.
Working in a machine is being reactive. You deal with problems coming at you ad hoc. It is quicker in the short term.
Working on a machine is about zooming out and taking a step back. It is about going to the core of the problem and designing a reusable solution that will make your life much easier in the future. Usually this takes more time up front.
Focus on each task or case at hand and you will be stuck dealing with them one by one. Instead, build a machine by observing what you’re doing and why, extrapolating the relevant principles from the cases at hand, and systemizing that process. It typically takes about twice as long to build a machine as it does to resolve the task at hand, but it pays off many times over because the learning and efficiency compound into the future.
There are many examples of this and one of my favorite is an Egyptian parable which I will share in a future issue of Avid Weekly.
For now, one simple idea is fishing. The original humans must have speared for fish one by one. Each catch was a unique catch. But at some point someone decided to work on a “machine” and ended up inventing a fishing net. Note that in order to do so he or she would have had to spend extra time up front to work on the net and potentially sacrifice some fish in the short run. But in the long run they would reap the results. 🐟
Here are a couple more passages where Dalio elaborates on this principle:
Another blizzard analogy.
Most people get caught up in the blizzard of things coming at them. In contrast, successful people get above the blizzard so they can see the causes and effects at play. This higher-level perspective allows them to see themselves and others objectively as a machine, to understand who can and cannot do what well, and how everyone can fit together in a way that will produce the best outcomes.
Look down on your machine and yourself within it from the higher level.
Higher-level thinking isn’t something that’s done by higher-level beings. It’s simply seeing things from the top down. Think of it as looking at a photo of yourself and the world around you from outer space. From that vantage, you can see the relationships between the continents, countries, and seas. Then you can get more granular, by zooming into a closer-up view of your country, your city, your neighborhood, and finally your immediate environment. Having that macro perspective gives you much more insight than you’d get if you simply looked around your house through your own eyes.
That’s all for today, I would love to hear some examples of how you are working on your machine in your day-to-day life. So feel free to drop a comment or tweet me @AvidBookReadr 😊
TL;DR of key ideas
- Reality is very complicated and we are born with no “operating manual”
- Enter principles – the closest you can get to having an operating manual
- If you study successful people you will find they all operate by best principles which they either learned themselves (by reflecting constantly) or from others (such as from history)
- What are principles? They are effective ways of dealing with reality. Dalio calls them fundamental truths that can be applied again and again in similar situations to help you achieve your goals
- Some key principles include looking at your situation from a higher level and working on your “machine” as opposed to working in a machine
If you liked this week’s idea, please consider reading the entire book to get the full context, meaning and nuance. As always, happy reading! 📚
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