Billionaire Ray Dalio Shares The ULTIMATE SUCCESS PRINCIPLES That Made Him WEALTHY | Lewis Howes

the greatest problem of mankind is people having opinions that they're stuck on because it prevents them from moving forward to finding the best answer i think you gotta have a dream the school of greatness yeah please welcome welcome back everyone to the school of greatness i am very excited we have mr ray dalio in the house thank you so much for being here ray oh i'm thrilled to be i am i'm grateful for you because you have such a wealth of wisdom not only on wealth accumulation and finances and the history of the financial system uh which we're going to get into as well but the more i dive into who you are you understand people and you've created this incredible way to build something by understanding people and in your book on principles it's really more a book about understanding people from my point of view and the science of how people think how they work and how to connect them to a greater idea and you've done an incredible job at understanding how to do this for your vision and for your company so i'm really grateful you're here and i'm grateful for your mission and your work well i hope i can be of some use uh i focus on it i do my best on it because i think it's important i'm curious the greatest relationship in your life who has that been for you the person in your life who's made the biggest impact well my wife she's been a partner for 43 years um you know so at all dimensions you know i love her um intellectually spiritually physically in all all dimensions and so and we share the most important things you know everything from the children and the grandchildren to excitements of life so uh without a doubt uh it would be her yeah and you you write the book in her honor which i saw in the beginning i'm curious what's the greatest lesson she's taught you about becoming a better man and a better business leader well i i i get to see the world through her eyes you know and and through her heart so she shows me so many things i would say it you know through all the years it's been many many many different things right now um she's in the process of over the last 10 years of helping the poorest most disadvantaged kids in bad neighborhoods in in high school to try to get them through high school and so on and so she's given me a window into uh a different world that has been helpful uh but it's uh you know it's everything it's spirituality it's uh you know different places in the world it's um so many things that's beautiful uh you've seen a lot of pain in your lifetime maybe maybe personally you've experienced somebody just in the world from the different pains that have happened in the world whether it be the economy or injustice different things that happen death you've seen a lot of loss just in general in life and you talk about how pain plus reflection equals progress i'm curious it seems like there always needs to be some type of breakdown in order for people to be able to look back and ask themselves okay what's working what's not working what do i really want and how do i get there do you think it's possible to have progress without some type of pain in our individual lives well pain is a heck of a teacher by comparison i mean you know like when when you get the pleasure uh then you then you just keep doing what you're doing but it doesn't teach you to change you know pain when you put your hand on a hot stove or do anything that uh got you into a position teaches you maybe about how to approach it differently and also pain teaches you about how reality works reality is reality we're given reality a lot of people say they want to fight what reality is uh you know oh it's what was me and stop thinking about it being differently just understand like why did that thing happen to me and how do i put it in perspective it's like nature does it doesn't care about you right it cares about the you know the universe and so when you have those experiences just understand how reality works and also how to approach it better that's smart i think so i think payne is the best teacher what do you think has been the greatest pain in your lifetime that you had to learn a lesson from well of course um the greatest pains are losing people that i love the most which then gets me to reflect on the arc of life right and what it's all like but um things in terms of i've come differently i i remember a case that changed me profoundly to tell you the story quickly so i started my business in 1975 investing and it's you know it's easy to be wrong in investing that's part of the game um but in 1980 81 i calculated that american banks had lent a lot more money to countries than those countries were going to be able to pay back and that they would therefore have a big debt to fault and that would cause an economic crisis and it got a lot of attention because it was a uh controversial view and then in mexico defaulted in august 1982 so that prediction sort of wow came right and some countries did and i got a lot more attention because of that was right and i thought we were going to go into an economic [Music] spiral a depression a big debt crisis and i couldn't have been more wrong and um i i was exact that was the exact bottom in the stock market yeah and i lost money i lost money for myself i lost money from my clients i had to let everybody in my company go and i had to i was so broke i had to borrow four thousand dollars for my dad wow pay some of my family bills so i mean i was it it it was a lot of pain this was 82 yeah so you're broke then 82. broke totally no money no money no wow and that was one of the best things that ever happened to me it was very painful but it was one of the best things for because it gave me uh the fear of being wrong without me losing my audacity in other words um it gave me an open-mindedness it made me start to think um what how do i deal with what i don't know so i it made me find the smartest people i could find who disagreed with me to start to understand their thinking it made me think about how i could maintain that uh that upside you know risk goes with return so i didn't want to have an ordinary life so i still wanted the big upside return but how could i do that without less risk that's right and i so that was a problem that that was part of my reflection and that reflection led me to understand how i could diversify better how i could stress test my thinking better and so on then i brought in the smartest people i could find who were independent thinkers who would disagree with me and then i and and and i did that and that was the exact bottom financially and so on in my life from that point up to um you know not long ago fortune described bridgewater as the fifth most important country private company in the country in the u.s and so it was that pain and reflecting well on that pain that gave me a greater ability to deal with what i don't know and i learned this is an important thing to learn that i learned that uh whatever success i had came more from my knowing how to deal with my not knowing than from anything i knew in other words what you know in your head is only a small percentage of what the important things and the right things to know is and so to be able to go outside of one's head and to take in the best of the best of the best wherever it comes and then use that to make decisions and all of that came from that painful very painful mistake where do you think you'd be today if in 82 you didn't go broke and have that massive pain i'm sure i'd have a you know a very uh ordinary i don't know life i don't know you know because i wouldn't have known how to have great upside while having acceptable risks right in other words like like i at the time i reflected it i i felt it was like like the following i'm on one side of a jungle and i'm on this one side of a jungle and i and you could go in order to imagine you could have great success if you can cross the jungle alive to get to the other side but in the jungle are all sorts of terrible things that could kill you and and so on and you have a choice you can have this bore boring or you could have this ordinary life or you can try to cross the jungle now each one of us would approach that differently for me i had to have the greatest life i could have so i had and i have a little bit of a taste of adventure so how would you cross that jungle and what i learned was that the best way to cross that jungle would be with a team of people people who i cared about they cared about with me who could see things that i couldn't see and i could see things that they couldn't see and that way you could be effective together and when i and so that's what i did that's how it worked and what i also learned through that thing is like i don't want to get out of the jungle i don't want to get to the other side because the actual act of being in it with them and to do those things is itself rewarding so i i'm i'm confident that i wouldn't have learned that if i didn't have that kind of experience so you're still in the jungle today yeah i'm in my job but my jungle all everyone's jungle um is a life arc there's a life arc right um you have to recognize the life arc you know zero to i don't know 80 85 or something is the life arc um something like that i'm 71 i know where i am on that journey okay it's important to know where are you on your journey and then when you start to think about that like where will i be in 10 years i'm going to be a different person in 10 years okay where will the people i love be think about yourself where will you be in 10 years and where will the people you love be it could be your kids it could be your parents where will they be and what will their experiences and the journey that they're going through and you're going through and this script in the journey by the way is is is pretty well known right like um i think i'll give you example i think it comes kind of in three phases uh the first phase is when you're dependent on others and you know you're learning okay then what happens is you get out of school and you become independent and you go to work and then it's entirely different you're in the second phase of your life when others are dependent on you and you're working and you're trying to be successful and then you and and but there are the arcs and you could see it the markers along those lines you know do you get married when do you have a kid when like i i realized like when my kids have kids i'm now in my third phase okay so so you see these things you know yeah and so you have to see that so what i want at this phase of my life at 71 i'm in tr in transition from my second phase in which i've uh worked and i've won and i've you know i played you know it's like had my battles and it was great and so on and now i'm in a mission to pass along the things that were valuable to me i want to pass them along to others and then i'm going to go quiet and then i'm in that other phase you know but you learn things and so this is kind of a mentor pass it a long phase how do you stay confident in transition from kind of one identity to a new identity that's something new that's something unknown whether it be in your personal transition life or in the financial world where things are unknown things are transitioning or it might seem like it how do you personally stay confident in the transition first of all you're really talking about comfort with ambiguity yeah okay um and the way uh the way that i feel it is uh life is like an adventure i mean if you knew everything it wouldn't be nearly as good right and so the ambiguity is part of it it's part of the game it's just the way it is and then so to then experience that and and and to know how to deal with ambiguity because the same rules apply you know feel it feel it what's it like how does it feel where are the pulls to how do you learn how do you learn how to approach it what's it like speak to others who have been in there in that spot before um you know taste it and so on our preferences change you know as you as you're going through all those things so you feel it out you learn about it you go to the things that you feel the pull toward i'm curious you have your feelings you've been talking about for a few moments but i know you're a very thoughtful human being you create algorithms for your entire work your team everything is based on algorithms kind of thoughts and ideas but i'm hearing you say you're a deep feeler as well are you would you say you're more led by thoughts or your feelings and no i think it's the alignment of them okay here's the facts of pertaining them there is a subliminal mind that we have and there's a conscious mind freud discovered that there's a subliminal mind so we have and in that subliminal mind we we just don't see it because you know because it's not conscious but it it has a big effect and so feelings and those things are coming through that subliminal mind and it really has a big control and then there's a conscious logical mind so they for everybody and so they're in your mind they're like everybody's mind they're these kind of two minds that are working now i i find that when i align them meditation has had a big effect on me i've been meditating since uh 1969. wow so so for a long time because what that does literally it's an exercise where you repeat a mantra um the sound and then you lose sort of a consciousness and you go into the subconscious mind but in any case to reconcile feelings with thoughts to recognize feelings with logic and align them like each has to double check for me like if my feelings i'm yes i'm a big feeling person the the most important things in life for me are what inspiration love um you know what what is it about i mean what are you doing it for but at the same time to be able to get their logic and be able to express oneself and and you know in algorithms or so is it is a good thing so when they're aligned it's kind of a double check and it works at both levels so i think that's most important when you doubt a decision or maybe just a moment in your life personal or business related doesn't matter when you when you're in doubt of something what is your personal mantra to get you back to a kind of a centered aligned place where you can make a better decisions well um on the doubts you know the question is always like how big of a deal is it and what is this type of bed and so on and yeah you know little doubts no okay that's no big thing um you know life and death decisions uh those kinds of things they're big you know those are the big questions um and what i um what i realize uh on those is um a doubting is part of that process you can only be sure a certain amount how do you get to the best triangulation in other words take in from the smartest people and your own thoughts and so on so that you're making that understand how reality works and then try to make sure that none of your um decisions are the ones that knock you out of the game in other words like i've got an expression for people who uh who work for me you can scratch the car but you can't total the car you know you could so realize okay you don't win it all you you know you you make your best bets but don't have the one so you have to eliminate the the killer ones because you have enough killer ones um and one and odds are one of them's gonna get you right so so you know i approach it basically uh that way you know try to make the diversification try not to have any killer eliminate all of those that are unacceptable and then go for the upside and and doubt but you know i'm used to doubt i doubt you know there's there's everything every time you put on a position in the markets for example i am never sure if it would be easy if i knew so there's a lot of doubt right so so doubt is part of it but you know don't have don't put yourself in a position that you can have unacceptable when you go broke hanged around a little bit is okay yeah right so how do you have confidence when you're doubting yourself and you're like i think this is gonna do well based on all the math and historical evidence and feelings how do you have confidence when you you know place that bet i have enough bets that uh i make the bets so that none no one of them i'm i won't allow anyone that'll kill me right and then i raise and i'll typically only want to make bets that i feel good about and i will have them stress tested my bets by having other people stress test it so yeah just imagine i don't know you're playing a chess game okay now okay maybe you're a chess master but okay what are you gonna do you have to still make a move so okay what's the best thing to do now imagine you could ask the best chess masters in the world what you do and think about the pros and cons and make your decision and and just not make it that also one's going to knock out of the game so it's that you mention a team going through the jungle with you and supporting you whether it be mentors or hiring how have you learned to bring together this great team that you've assembled where people are going to disagree with you it sounds like people would have different thoughts and be able to free to disagree with you on certain things how do you know when the disagreement becomes toxic when you can look at it from a point of view of like okay i need this disagreeing thought but when does it become toxic where you actually need to let go of that person in your life or on your team well what's so interesting to me i think is that you immediately your question about the disagreement is toxic um that's the first thing that people go to somehow they think disagreement is toxic and supposedly it's because the part of our brain which is the amygdala which is this fight or flight takes disagreement as the equivalent of a fight and so it anyway gets triggered that way now instead imagine it's a curiosity in other words i view it as a curiosity i mean i could tell if somebody's uh wanting to disagree with me or i'm disagreeing with them because i want to hurt them i mean that's a different thing if you want to hurt them okay then that's a different thing but i mean like disagreement should be a comfortable thing that prompts curiosity and so on and mutual respect like if like how could i ever get along with you if i couldn't disagree with you i like how many times you know i mean you're gonna disagree like you might one thing another then that's the beginning of trying to find out what's correct in the path so a good partner is going to disagree with you and you have to get past it so the fact that you're asking that question the way it is which is a normal question that everybody would ask so reflects the fact that there's a hesitancy for disagreement that gets a bad thing and it's a fight and it's nastiness rather than just a disagreement that needs to be figured out and how have you personally learned how to disassociate the maybe personal attack against your ideas or your position on a a stance or whatever between someone personally attacking you and just oh this is a curious idea that they have let me ask them more about it how have you learned how to do that and what advice would you have for others first of all i learned by it because it you know like it works i i mean uh you know like i'm afraid of the opposite and and how can i have it helps my decision-making it helps our relationships what are they going to do bottle it up and i'm going to bottle it up is that smart i mean you know that that sounds stupid to me you'll you don't even know what's true you can't figure it out so everybody's confused because nobody knows what each other's really thinking and then also like uh you know you won't get to the right answer and i mean that just is too stupid a path for me for me to do it it's too risky pass and it's so much rewarding so much more rewarding to do the other right have you always been like that or was it until you went well i think what helped me get that way was the markets okay because again what happens is you know there's just being right or wrong there's just a winning or a losing and and okay so just imagine you're uh you know it's like being a trained monkey you you you know like it what works you okay should we push a button should we push the button okay okay yes okay it makes sense is better than i'm gonna push the button push the button whatever it is okay no i don't see it that way okay let's figure it out and so on so i think and then the scorecard i think probably had the benefit of that kind of notion i got a score card okay i don't know like i'm not sure okay bill bring it on please stress test me oh that's great we have we're good partners so that to some extent i think uh played a role in you know my types of experiences maybe if everybody had a scorecard on all their decisions and then was being able to experience essentially you try it one way you try it the other way and you start to see what's better and you get punished one way you get rewarded the other way naturally you want to go in the direction you get rewarded right so you stop thinking okay my way is the way you start basing it based on data and scorecards isn't that so stupid my way is the way i just want to make the right the best decision possible i don't care where it comes from yeah but did you at one point in your life for a period of time were you committed to your way and thinking that you had the answers well i i like i say i think before that uh 1982-ish incident i probably was a lot more okay yeah okay you know i think it's right and what i think is right and i'm a smart guy and so on so i was like you know that life is a good teacher just a good you know like two by four in the head you know and you got a couple of those and you know pain plus reflection equals progress yeah what is thoughtful disagreement in your mind and how important is that in this moment especially with the this political unrest and economic unrest and just everything how do people have thoughtful disagreement as opposed to kind of toxic disagreement well first of all they you know they got to want it but let's assume they want it you know then there are three things you have to do basically first you have to put your honest thoughts on the table and have the other person put their honest thoughts on the table okay so now you know what you honestly think both sides that's great then you then there are protocols for disagreeing well you know i wrote a bunch in the um in the book yeah um yeah and um like i could go through some of those types of things there are certain exercises that you could do you know there's a i have a two-minute rule you speak with two minutes without the other you start to think are you blocking um you have a mediator maybe in other words somebody when you're disagreeing if you can't disagree say we mutually agree that this person will be our mediator and and or and or maybe to the judge they'll decide maybe it's a group that decides that in other words you have a protocol for disagreeing and then um and then deciding sometimes in that disagreement hopefully you both learn a lot and you may reach an agreement but you still may not have an agreement but then you try to say what's the best protocol for moving fast that discipline you know uh like a uh you have a judge and a jury and you know they have a case and anyway what do you have good protocols so so you have to have three things you have to put your uh honest thoughts on the table um you have to go through processes that helps uh to reach the right answer depending on how serious the question is right if it's um and then number three you have to have a way of getting past that decision and moving on um i have a basic view though whenever there's any disagreement or anything that's not going well stop okay pause don't just keep banging at each other when it's escalating when people are yelling at you just pause and and sort of go above it and say what are our ground rules for disagree what how should we be with each other and you turn your attention rather than to the argument at hand but say okay if i think this and you think this how do we do this and then once you agree okay then you go back into the argument and then you follow those protocols because half of the problem is that people just don't even agree to know how to disagree but but if you do it that way with those protocols and so on and you get past your disagreement it's it's great yeah i want to talk a little bit answer your part two of your question yeah um the greatest problem of mankind i believe wow that's a big statement the greatest problem of mankind and it is an exceptional problem at this moment in time is people having opinions that they're stuck on that um they won't you know like i have to have my opinion and that's right and so on because it prevents them from um resolving it up from moving forward to finding the best answer from compromising and or doing you know so like everybody's arguing over everything and and they and you know they're it's almost like they're killing each other and and we're in a society you know i have another principle which is when the causes that you're behind are more important to you and others than the system the system is in jeopardy so do you are you just literally going to go fight so here we are as we think will we fight or we have or will we have protocols for having thoughtful disagreements and getting past them that's why i love your principles and protocols in your opinion how has this last couple of years been in the history of uh investing for you in the history of the last 40 50 years is this a really really bad time in your lifetime or is this just another bad time but not greater than previous bad times you mean in the world in the world yeah um there are three things that are going on now the three most important things that are going on to great extremes that have not existed since the 1930-45 period okay and it's important to know those three things and then to understand them well okay uh the first is um what is going on with money and credit when you get to something like a zero interest rate and um you need buying power the government needs buying power but they can't they can't tax it and they can't so what we have is the production of a lot of debt that the central bank prints money and buys that debt to spend and the last time that happened in the last few years it happened starting in 2008 interest rates hit zero they couldn't lower their interest rates so they had to print a lot of debt and the government went in and bought it okay and we're coming to the end of a debt cycle okay so this is a big thing like because where does the money come from and who will get what the government will now determine that and then they'll print it and it'll devalue money okay this is and how money flows a big deal so that's number one the second one are wealth and political gaps that are causing great conflicts throughout history there's always been the main things that everybody's always fought over is uh money and power particularly political power so what we have is a situation when you have a large wealth gap and you have an economic downturn particularly if you put a large a lot of debt having at the same time you you have a fight i mean that's been true through history um and it it's reflected in the political gap so the political gap is um you know it's classic political gap left right you know um okay capitalist socialist how do you distribute it how do you how are you going to deal with that that that becomes the other and how you fight so that's the second of the two you know this wealth political gap that's causing the conflict and it's coming at a time where we don't have much money because we're print we don't have a good financial position we're printing and then and putting it out so we're still paying off debts still right yeah but with made-up money i mean meaning what what happened like kovid was such a good example okay you have covid and a a lot of people and companies had falls in their income that were would be ruinous okay if if checks didn't go out we would have had a revolution right and and so that those checks and how do you save everything and so on okay so and it's not like the government had real money like they it's if they didn't have any money they already owe a lot so they just printed more money to give they made more debt than the government and the federal reserve printed it and that you know the checks went out which diminishes the value of money and so on and changes things yeah so then the third thing is the rise of a great power to challenge an existing great power so the rise of china to challenge the united states in all history there are world orders what that means are are um you know they're the dominant power you know it's like in nature almost you know the big bull or something anyway there's the dominant power and then what happens is in 1945 um the united we entered the american world order we the united states won the war and it um it ended and then in 1945 the the winners of the world carved up the war world we had uh 80 of what was considered money at the time gold 80 of the world's money essentially we counted for half the world's economy and the rules were set in the united states basically that's why the united nations is in new york the world bank and the imf are in washington dc because we began the american century okay that's and then uh we are now at a time we've never had somebody another power challenge us in the same way there was the soviet union but they were always a fraction of the size economically so couldn't compete on that same basis they had nuclear weapons but they didn't have the economic power and so on but now we're dealing with china coming on as a power i spend a lot of time in china over the last 36 years by the way and i admire how they're doing a lot of things right i mean i know it's controversial to say that but um in terms of like they're a power yeah whoa like since since i started going there uh their average income has increased by 30 times you know so they're a comparable power and they're also growing faster and so that has has an effect so those three things are things that never happened in my lifetime before but happened before in history which led me to do the studies of of what happened in history and the lessons i could gain what is that those three things uh money and credit wealth and political gaps and the rise of china what is someone like myself or some 30 40 or 45 year old 20 year old what should they you do with that information what should they be aware of how should they apply it does it apply to people uh in america general america or is it only applied to the wealthy what should we be thinking about it affects everybody you know it affects like we know let's start with ourselves most importantly forget about the outside thing can we be healthy and strong and what do we need to do like to know that you you have to be in it together like if we can row in the same direction okay if if we can have thoughtful disagreement and get past that if we can be in it together like the wealthy and the poor and and and you know and if you figure it out and and i know it sounds so difficult but at the same time if you read history and you see what happens when it's not when you have a civil war like we could be on the brink of a civil war that sounds so crazy but the truth is in most countries in in in almost every century there was a civil war or a revolution some form a civil war revolution um so it's almost inevitable that we're gonna have something okay you either resolve it or you you start fighting so badly that you damn you really do tell yourself to each other until you resolve it yeah well the the once you cross a certain line there's no coming back okay because you do the damage you you you demonize and that person such an enemy or that class of people is such an enemy that you that the communication is gone and the fight well you see this in politics today in other words is there a respect for the system and a mutual respect of trying to fight find resolve these types of things or will they go to any lengths to win because a constitution or law will only carry you to so far okay there has to be an element of respect for it right if you think about the presidential election it's quite something that we as a country as a people um when somebody might win the popular vote somebody else wins the electoral vote there's not even an argument like in other countries you might say those who had the popular vote would say what the hell i won the popular vote i think it matters and somebody says electoral vote and so on okay there's not a question about that okay now when you start to say okay is it this vote or that vote or this thing or that and how far are you willing to go to fight and does the rules matter when you start to get cross that line and you do harm you hurt and you alienate then you go to accelerate this process and people should know what that looks like how terrible it is so maybe if they know what it looks like and how terrible it is and they can empathize a little bit but i i see people don't don't see it i'm living in greenwich connecticut um connecticut has the highest per capita income in the country and it's got the largest wealth gap most of the people in connecticut are pretty poor really some cases very poor oh i'll give you an example this is the community my wife works to help high school students 22 of the high school students in connecticut are either disengaged or disconnected what that means is disengaged means there have an absentee rate which is greater than 25 percent and they're failing classes they don't show up to class that's right they show up you know uh three quarters of the time and they're failing or that's disengaged disconnected is they don't know where they are they've dropped out of school 22 one in five so school is not working for them and they're in desperately poor areas like okay we had the coronavirus and so her efforts and our efforts are philanthropic that's what got her involved um they don't have computers they don't have connectivity they they have they have problems getting food they get food in school they need the food in school because they don't have adequate food okay and this is connecticut and it's right up the road so we had to we we bought these kids 60 000 kids computers and then we're trying to get connectivity and so on and you start to see this okay this is the same world now um i so i live one every neighborhood with my community and then there's the other they don't understand each other they're they're um they haven't lived there they haven't empathized and in fact there are resentments on both sides right like um the people in my community they don't feel uh they're very rich by comparison to um those other people but also to take care of their families to educate them they have their own challenges the work-life balance and so on they have their financial insecurities and so on so that's what they're focused on and then they might think all these other people they're not taking care of themselves why don't they pull themselves up by the bootstraps do you know what it's like to be a kid growing up in that neighborhood and trying to what what are you talking about you can't pull yourself up from i mean well you know there's a problem there's not enough food there are gangs they even walking to school neighborhoods that are gang shootings and you can't and there are not enough police to do it okay so these two worlds and then the others uh say you know well um here we are and you're walking around with your fancy cars and your you know fancy clothes and and so on and we're suffering i mean come on and so they don't understand each other and so on we have to get past this we have to be in it together i think otherwise we're going to kill each other how do we what's the main thing that both sides need whether that be in greenwich connecticut or in the usa on different sides is it empathy is it compassion is it a awareness what is that thing that both sides need in any rich poor dichotomy well there's the there's the intellectual thing they need in the emotional thing they need okay intellectually what they need is maybe emotionally the fear and the understanding that where this will lead will be devastating okay if they don't deal with it if they don't deal with it together and you look at history you need the fear you can't give people necessarily empathy or love you know we could say oh they should care about the other person okay that's too much to ask i mean yeah you know that's not realistic okay but realistic is that you if you don't if we all don't get it together or going to have you know you like all that stuff you got well you ain't going to have it anymore and and all of a sudden the things that are the most basic in terms of uh take care of it and then if you start to realize um that it's productive like if you if what do you need to be successful it's all i had when i grow up was um i had uh parents who loved me and took care of me i went to a public school okay and i came out to a world in which there was equal opportunity those are all the only things you need and you know health care but when you're young you don't need much of that so those are the only things you need um now even in these communities sometimes you can't get the parents but you you can get people who care about them they're teachers and so on but you have to just try to strive for equal opportunity do you think we have the opportunity no of course not let me look at any any of the statistics i mean i i i can give you examples i i studied um this issue because first we when populism started to come around and um i thought that was i needed a study uh donald trump is as a populist and so and then it's all around the world and i and i needed to study then the different quintiles the top twenty percent next twenty percent so on and i saw what the pictures of the lives of the majority of people are like the bottom sixty percent um um and equal opportunity um no put that in perspective the those in the top 40 percent um spend on on average on their kids education five times as much money as those in the bottom sixty percent it's a self-perpetuating thing it's not a bad thing those parents care about having their kids well educated so because they do and they take care of their kids they're taking care of their kids they're getting them well educated and so on but not being well educated means you're not going to have equal opportunities and so as that gets narrower and narrower you have that phenomenon that you you know so there are a lot of ways you can measure whether there's equal opportunity if we if but i don't even know we can agree that we should have equal opportunity i mean like i i'd almost take a poll you know of the american people and see could we agree that we should have equal opportunity okay that would be an accomplishment okay then if you could do that then we say can i take measures metrics by which key performance indicators by which i could say how are we doing on the equal opportunity goal right and then and then monitor that and you say oh it's getting better or odds getting worse if we could do that we'd accomplish a lot yeah we got to get to that place first this is fascinating i'm i'm curious about the mindset of making money and there's a massive wealth gap there there are people that who are making money and some that seem to be making more and more money and others that are always seem to be stuck in the ability to make money to save money to invest money they always seem kind of trapped in not making it what would you say is the mindset that wealthy people have around making it and growing their money for them versus the mindset of people that stay stuck in not making it well i i want to distinguish there's big differences in opportunities yes so let's say supposing you have two people of comparable opportunities yes and then they were going to do that okay the marshmallow test as you as you know apparently is you take a kid and you say okay you can have one marshmallow now or you could have two marshmallows in 15 minutes if you don't eat the first one yeah if you don't eat the first one right yep okay once you start to realize that deferred gratification is going to make you better and so on and you start to count count and you say like something like how many days weeks months or years can i live if i don't have money come in and you start to focus in on that that's the first step okay like the marshmallow test okay so i want to save you got to start there then if you do that you're necessarily going to go save in what and then you'll start to get exposure to how these things are different okay then you start to care once you have one of these and one of those and you start to experience and then you start to learn and basically that's what makes the difference that's it the so first having the ability to have delayed gratification then obviously diving in researching testing and trying different things but the more and more you can say you don't want something now for greater later is the essential key well and what it does then when it comes to the money that means money yeah now at that moment that you don't want it you have savings that means i want savings right okay now you got savings so the next thing inevitably that's going to come at you is where do i put it and then you get your choices and then you experience it and you learn right yeah because there's lots of place to put it for investments there's real estate there's stocks there's building your own company there's different places to invest what have you found are the top places that people should be investing well i think first you you start with what are the most important things that you're closest to like is it your business first calculate how many days weeks months or years you can live on your saving because when you do that you'll start to you'll gain security you'll gain that okay so look at how much you're spending okay and then say how much do i need and whatever that number is you're going to need more than that because it may go down rather than go up so okay now do i have a year spending okay you so i think i think you you start there then you start to think um what are the things that are most important for me like and then you start with your your business or your residents that have a symbiotic relationship and that you know well let's say if you start with your business okay you're closer to that investing in yourself with whatever that may end up being that may be your best investment not not real estate not stocks not the market well it depends if you're if you're not you know if you're doing something where you can do it yourself and that's the thing but if you're in a job and and that that's not the thing right because you because you're in a different position okay but anyway if you and then i i really think there's something good about your home a basic thing about your home because uh it's nice forced savings and it also means that you you fix it up you you know you're saving you find out there's oh well if i add this thing or that thing and you're enjoying it so when you're enjoying it and you're controlling it and it's yours and so on uh that's that's pretty good and if you know if they keep mortgage tax deductions and so on you know there might be some benefits to it also okay but that's not a black and white answer you know so you could take a short pencil and say is it better to rent or buy okay that's a different question maybe i said but by and large am i going to move you know all of those other questions but so when you start with okay what is it that's close to home and how much you need a certain amount that's liquid in other words you got it in your house you got to make a mortgage payment or something and all of a sudden you're you know you know it's not liquid and you lose your job well that can cause you trouble so how much do i have that's liquid how much do i have that's not liquid okay and you start to get those things right okay i've got enough liquid i got enough okay not liquid and those other things okay pretty soon you're you're getting yourself in good shape yeah you do those things you know you're pretty much in good shape and then you're also having some experiences and then you go beyond that you know and then so you start to okay what you know okay what's a stock what's a bond and then you know you learn from experiences i learned through my my experiences i started when i was uh a kid 12 i used to caddy and i took my caddying money and i put it in the stock market and i was lucky what happened to me by by the way is i took my catting money and um i bought the only company that i ever heard of that was selling for less than five dollars a share and i thought that that you know well i was really dumb i thought um i'll buy more shares so if it goes up i'll make more money uh and it was the only company it was a company that was about to go broke but somebody some other company acquired it and it tripled and i thought ah there's an easy game and i like it easy money so but you know you experiment and you learn you're a very philanthropic individual you and your wife your foundation your company you give back in a lot of ways some might be through donations like computers some might be through financial some might be through just your work and your content on linkedin which is amazing i recommend everyone subscribe to on linkedin the content there is amazing you're giving back in lots of ways i'm curious what's the greatest gift a rich person or someone with money can give someone who doesn't have money to give the knowledge uh teach a man how to fish is better than to give them a fish i mean i think you can give them both you can give education and you can show but uh ability the the capacity to be productive because you know if i can give you the capacity to go out in the world it's like go into a jungle i give you a knife and can you live in the jungle okay if i give you that capacity that's the best thing i can give you that's why i wrote the book and you know pass it on i wrote those principles over years and i wrote them down and that's what i want to pass along that's the most important thing yeah but but if you but if you've got money you can help people uh a lot in a lot of different ways which is thrilling what would you say then are the three greatest skills that people that aren't financially abundant or that are struggling financially should learn to master in order to be in a better position financially three skills what would you say they should learn well as i said before i remember watching the movie i was young david copperfield with w.c fields and he speaks to david copperfield and he says he said something like and i'll put it in dollar terms you're in a hundred dollars and you spend 105 dollars that's misery if you earn a hundred dollars and you spend 95 you'll have a good life i mean and what wasn't exactly like that but it was but but basically i know so many people who don't earn much but are there because if you start to think about what it is that it costs you to live in terms of let's say the basics you know uh give me a bit to sleep and give me the food let me be educated and so on so forth i think most people can get themselves in a position where you know they're net positive so if you can be net positive and you could do that that you know that's number one i you know as i carry that so that's you know that's number one then i guess it was the list that we went to you know the second is you know what do you do next in terms of what do you need what do you invest in you know and then and then you know going beyond it and then there avoid the following mistake the most common mistake of investing thinking that the investment that did good is a good investment people rather more expensive the things that quite often those markets that did really really well became more more expensive and everybody smart money is all the time compete comparing them and competing so what happens is um the naive money buys the thing that was hot or is hot the thing that has been terrible which might be the thing that's beaten down so i would say also an important element okay so here's another one that's really important diversify um so don't put all your eggs in one basket right because what i learned about this is that first of all all investments uh compete and it's not easy to sell tell whether one investment is better than the other because if people could do that life would be easy and everybody make a ton of money so and this is a competitive game that's very difficult to compete in so it's very difficult to say which one's better or worse you could take experts and you could and do all sorts of tests and you'll find out that they can pick that and you can't tell whether the worst ones are going to be better so because of that you understand that um even picking the best ones is difficult and particularly if you're naive like we spend hundreds of millions of dollars each year on research to try to give us an edge okay now you've got to compete with us so uh competing in the markets is more difficult than competing in the olympics you wouldn't go think i'm going to compete in the olympics but there are more people who try harder in order to do that so it's a zero-sum game so but diversification um that they're different uh will reduce your risk without uh reducing your return yeah so if you know how to diversify well so um that's critical so i would say again uh get get your savings right and the reasons i say i would say um have great humility about what you what you don't know don't buy the thing that was hot just because you think it's hot um and then know how to diversify well that those would be the most important things i could convey i love that you talk about the in the sports analogy the olympics you're speaking my language now as a former football player some of the greatest quarterbacks seem to get not too high they're they get excited but not too excited and not too low uh when things go good or bad how important is that skill to be emotionally resilient on both levels high and low for you how important is that skills it is one of the most important things possible and it's not easy to do um so i needed to uh you know do two things um i found that by writing down my principles and the rules and then testing how they would have performed over time and that's where the algorithms came so that i can basically just like a machine play it click click click click click okay with execute the game plan you know don't do it oh because i know what the experience is like the experience is like you're wrestling around with it you're losing money like the day you put on a trade it doesn't go either straight up or straight down and goes against you so now i don't know you're losing money okay how much should you lose what's your game plan you've got to know your game plan and stick to the game plan and you can't be shaken out and yet um the emotions are going to cause you to doubt yourself and plus it brings you stress and all of that so you have to execute a game plan that's very well thought out right yeah um then over time you start to develop some better instincts like if you're excited and you're going along be scared you know if you're if you're doing something you're really worried about and and nobody else is doing it may be good don't be dissuaded see the markets are very different than consensus decision making it's counter consensus because the consensus is built into the price right so if everybody loves something it's expensive and if everybody hates something it's cheap so where most people say ah this is like oh what a great company okay amazon is a great company we got amazon's a great company who doesn't got that amazon's a great company okay and then okay i'm gonna go on the amazon okay but if everybody's got that it's it's a great company and it it becomes increment less great than they anticipated bam that baby goes down so you have to um start to develop some of those instincts or a game plan and what what financial advice would you give to millennials who who don't have these these tools yet besides obviously getting your book and starting to practice some of these things but i feel like millennials are overspending more than ever they're uneducated on finances and personal finances what what advice would you have there pay attention to the feedback you get from the realities you encounter yeah okay i mean you know pain plus reflection you will get the pain pay attention to it listen to it because you're gonna get the pain yeah and do you think it's you have the wealthiest friends in the world you're friends with some of the wealthiest people in the world do you think it's easier to get wealthy wealthy or stay wealthy which one is harder to do get there or stay there is definitely harder to do than get there getting there can also be like has a certain element of luck you know um i was in the right place at the right time i held this thing or uh bought it or i am at that company i'm working at that company and you know all of a sudden it goes from this to that and you know you're holding on to it and it goes okay that's who oh wow okay it's winning the lottery kind of thing okay do that again right okay and then again and you do it again and can you make the thing the thing work over and over and can you hold on to it and so on yeah because that's that's where you know it's like um well using your sports analog right you know you can luckily crack it that cracked the bat and you know i mean or whatever you the hail mary pass and so on when you have to do it on an ongoing basis regularly that's the test of talent and that's harder yeah yeah i've got i want to respect your time ray i've got two final questions if that's okay with you we might go a minute over if that's okay with you uh before i ask those questions i want to make sure people get your book because this is decades of wisdom uh one of the greatest mentors financially you'll ever meet is right here in this interview and this book is decades of wisdom from testing pain pain after pain trial and error and incredible lessons from rey's mentors that he's learned from and applied in his life over and over again with an algorithm approach to life and for me the thing i love about this is it's so much about emotional intelligence from what i learned in the book a lot of it is understanding yourself understanding people understanding emotions which is one of the reasons i created the school of greatness was to create the tools for people that they didn't teach us in school they don't teach us how to be emotionally resilient which is something you've learned through you put a lot of money in something you lose it you've got to learn to be emotionally resilient so make sure you guys get this book also follow ray on linkedin your linkedin posts are amazing a lot of bite-sized information from the book there uh and so go follow you ray dally over there on linkedin twitter instagram facebook as well all ray dalio and principles.com has incredible content and information there so if you want a more mentorship from ray then you've got the information you've just got to take action on it you also have a i don't know if you're talking about the personality test but this is coming out in a few months let's talk about that this is a test that i took that you've been developing for years with behavioral scientists and researchers on how to understand the people that you're hiring or working with or people in your family in your life or yourself or yourself so you know what you should be taking action on or creating in your life what you're good at and things like that i took this test powerful i've taken a lot of personality tests but this is probably one of the best and most accurate that's going to be coming out soon so what they can get on your newsletter list or what should they yeah um it'll by the way it'll be free amazing so uh but yes um if you go to principles.com that way you can uh you can you'll see the information there if you're following ray anywhere on social media i'm sure when it comes out you'll be talking about it they'll be posting it online and in your newsletter so make sure to subscribe to that because this test will help you understand yourself better and make better decisions in your life and also the people around you so and i didn't know it's gonna be free so that's amazing so it should be out here in a few months make sure you guys go to principles.com to check that out and get access to it when it comes out two final questions for you that's okay yeah number one this is a hypothetical question i ask all my guests at the end it's called the three truths and i'd like for you to imagine that you get to live as long as you want to live ray uh but for whatever reason it's your last day on earth and for whatever reason hypothetically all of your content like your book your social media this interview your videos for whatever reason you got to take them with you to the next place so no one has access to your content anymore or your principles but you get to leave behind three things you know to be true from all the lessons you've learned in your life and what i like to call your three truths that you'd share with the world what would you say would be those three truths for you i guess i would relate it to what i would say before about uh the principles which is that um life is a a a journey an adventure that is an ark it has a life arc um and to know how to uh play that well to have principles that you believe in and that you um related to that is um that knowing how knowing how to deal with what you don't know is more important than anything you know and that i think the most important thing in life is meaningful work and meaningful relationships if you if you love your work and you have a passion that you're pursuing like you do and you have meaningful relationships either in that work or beyond that work there's nothing richer you can't get a better life those are beautiful truths thank you for sharing those and before i ask the final question i would acknowledge you ray for for being an incredible giver in the world because of someone who is one of the richest people in the country in the world you're you've accumulated so much but you're wanting to give so much back now and i really acknowledge you for that for yourself it's a pleasure it's i think like i'm not going to do anything just so you understand people yeah pat on the back and everybody says okay thank you whatever so what but the truth is there's an evolutionary process you take care of yourself and and so on and what do you need and then there's an increment of like how much okay you heap on yourself versus you look around you and you start to see what's needed and so on and so there's a natural evolution i think i i think most people would have that kind of evolution so i don't think it's such a big deal well not everyone has that there's some people that just continue to want to focus on themselves and their ego and the fact that you you don't need to write a book and share all this stuff this probably took a lot of time and energy you could have kept just doing your thing but you're you're providing this you're providing free tools and you're taking the time to show up for interviews like this and share your wisdom which a lot of people don't have that wisdom so well let me ask you why are you doing your school of greatness my mission is to serve humanity at the highest level and i'm doing it for i'm doing it from an uh a pain if i if i think about it because i i felt very insecure as a kid growing up i felt like i didn't have the tools to to manage my pain emotionally physically mentally financially and i wanted to learn from myself by interviewing the greatest minds like yourself and then create a platform to share the wisdom for free to people so for me it's it's a selfish need but also how can i impact the most people with my personal needs as well we understand each other yeah i get it i mean i so right so it's it's your selfish need that brings you so much joy so we get each other right yeah exactly exactly well i appreciate you i acknowledge you very for showing up and uh my final question because i know i'm a few minutes over now is what's your definition of greatness greatness is self-actualization i think it's um evolving well and contributing to evolution i love it i'm i'm very grateful for you sharing and i'm grateful that you've evolved well over the years that you could share this wisdom with us and uh when you have your next book in the future out hopefully we can have you back on and share some more great wisdom with our audience but right thank you i look forward and thank you for doing this thank you for your time and and all your inspiration appreciate it my pleasure if you want to learn how to become happier in your life then make sure to check out this video right here sky's the limit possibilities but if it goes through the lens of who i am is this past story this limitation this person that tried to achieve it and failed is someone who gets loved by failing over and over as someone who has to stay small significance by failing right

Channel: Lewis Howes

Views: 220,979

Keywords: Lewis Howes, Lewis Howes interview, school of greatness, self help, self improvement, self development, personal development, success habits, success, wealth, motivation, inspiration, inspirational video, motivational video, success principles, millionaire success habits, how to become successful, success motivation, Ray Dalio interview, Ray Dalio speech, ray dalio ted talk, ray dalio principles, ray dalio success, financial freedom, how to become wealthy, success advice

Id: kEKp1lK5qwA

Length: 74min 2sec (4442 seconds)

Published: Wed Dec 09 2020