瑞·达利欧最新长访：我们正走向非常非常黑暗的时期！美国和英国的衰落即将来临！

• Pain plus reflection equals progress.
• Ray Dalio is a legendary investor who predicts financial futures.
• Understanding cycles of human history is crucial for making informed decisions.
• The future holds uncertainty for the UK and the US.
• Building personal financial strength is essential for individuals.
• Relationships and meaningful work are key to happiness.

Pain plus reflection equals progress. And from that principle, my company became the largest hedge fund in the world, managing how much? $150 billion. But I learned that history of things that never happened in my lifetime before were important things to understand in order to predict the future. And we can get into that if you want, please.

So Ray Dalio is the legendary billionaire investor who decoded the cycles of human history to predict financial crashes, build the world's largest hedge fund and now to warn us about what lies ahead.

Are you optimistic about the future of the UK? No. What about the United States? No.

Why? Okay. In order to bet on what's going to happen in a global economy, I learned that there are five big forces that create a big cycle that's repeated through history which lasts about 80 years. The first is the money debt force that creates wealth and opportunity gaps. And it's connected to the second force, the internal conflict where you don't trust the system, causing wars between the left and the right. And it's not easy answers like tax the rich and we can get into that.

But the third is geopolitical force, in other words, international conflict. Then there's acts of nature. And then number five is man's inventiveness, particularly of new technologies.

Now the question is who wins the technology war? Because the winner of that determines how the new world order works. Is it something to be concerned about? No. The question is how you as an individual handle it. How do I as an individual handle it?

So there's building your financial strength, flexibility, the importance of being open-minded and how to get more out of the minute, not how to work harder. And I really urge your audience to learn all of this.

So first of all, I see messages all the time in the comments section that some of you didn't realize you didn't subscribe. So if you could do me a favor and double-check if you're a subscriber to this channel, that would be tremendously appreciated. It's the simple, it's the free thing that anybody that watches the show frequently can do to help us here, to keep everything going in this show, in the trajectory it's on.

So please do double-check if you subscribed and thank you so much because in a strange way, you are part of our history and you're on this journey with us and I appreciate you for that. So yeah, thank you.

Ray, I want to describe to you who's listening right now and the question I have for you is what is the most important thing that this persona of a person should be thinking about at the highest level right now?

So the person that's listening is someone who is intent on improving their life. They're really interested in business, potentially starting their own business. They care about where they're investing their time and energy and also where they're setting up their home. Based on in terms of geography, they are aspiring to accomplish some goal. They're probably between the age of 18 and 50 predominantly, and they are very, very interested in understanding what's happening in a world that feels incredibly scary, fast-paced and uncertain at the moment.

This is a very difficult question, but if anyone I was going to ask anyone, it would have to be you. What's one of the first things they should be considering at this moment to safeguard their future, their family, their finances?

I don't think it's a difficult question. I think it's very clear. They have to understand how the life cycle works. Okay? They have to understand how it works. We were just talking before on the book and there was the arc of the life cycle, right? And you have to understand that you're on an adventurous journey and you have a certain nature, those qualities that make you have your preferences and so on.

And then you're going after the things that you like and you're learning and that's going to have the ups and downs and so on and how you approach that. So you asked from the higher level, if I'm looking down like that life cycle, that arc, what's that journey like? How do you approach it? What are your principles?

How do you even learn how to approach it? That's why we're having these conversations, right? So that's clear. Know what's your nature, how's the journey? How do you find the path that's suitable to your nature? And then you'll go down that path and you'll discover and you'll evolve. What's that like? That's what they need to know.

You said what's your nature? What do you mean by nature? People are born with and then also their environment creates their different nature. You know, we have our preferences, our inclinations. We think in a certain way. You chose to be entrepreneurial, you’re living out your nature.

Some people have a different nature, okay? They would like to have the stability of a job and clarity and so on. So when you have your nature, you want to know that and then find the path that is going to be good for your nature. Then there's the particular tactical stuff.

So if you would ask me, should I be in the UK or should I be in the US? Well, that depends on a lot of things, but that's a tactical question. So if I want to be an entrepreneur and I want to build a technology company, do you think I should be in the UK or the US? I think you should be in the US.

Why? The US has a culture of entrepreneurship inventiveness. There's a whole different culture, like in Europe, generally speaking. And in the UK there's an establishment culture. Here you could be 25, have a blue streak in your hair and have the talent, but if you've got the talent to pull it off, you can get the resources and you can be an entrepreneur. There's a culture of that. That means that it's happening more. That's why you even see the differences in the economies.

Where is the inventiveness really happening? It's happening here. So I would say, if you want to be an entrepreneur, this is an environment that's particularly conducive to being an entrepreneur.

So what is your honest perspective about the UK at the moment? The UK has a financial problem. The government has a debt problem. It doesn't have enough money for what it wants to do and what it can do. And so what you see is the non-dom problem, people moving and so on and so forth.

Throughout history, when you have these sorts of things, then there's great clashes in people. And the UK has been in decline since the war. Even the development of the capital markets, can you raise capital there? All of these things are much worse than they are in the United States. And it leads to clashes.

You said, of course, you know, there are five big forces that create a big cycle that lasts about 80 years, give or take 50, let's say. And the five big forces are there's a money debt economy force, okay? Debts, their spending power. So what happens is, when you give somebody credit, they can spend, then it also produces debt and debt has to be paid back.

And so what happens is, if there's not enough income to pay back the debt, then you have debt rising relative to income. It squeezes out spending, people don't want to hold the debt assets and so on. The UK has gone through that and has gone through that. And it's connected to the second force. And we're all going through this in varying degrees.

The second force is the internal political and social force. In other words, like between the left and the right, with wealth gaps and opportunity gaps, we have big wealth and opportunity gaps. So when you have big wealth and opportunities gaps, there's conflict, okay? Conflict between the left and the right.

And when you get to the situation where you don't believe the system is working for you and you don't trust the system, then there are wars, there are internal conflicts over that and so on. So the third force is the geopolitical force. In other words, there's a cycle that usually goes from one big war to another big war.

So the last war ended in 1945, 44, and we began a new order in 1945. And the way that works is that the winners of the war determine how the world order works. They draw borders. They say, here's how it's going to work, and that's the new order, okay?

And that continues until there's a rising power challenging an existing power in the existing world order, which typically is deteriorating at that time. And then you have international conflict. Okay, these orders, there's a monetary order, they all break down. There's an internal political order, they all break down, and there's a geopolitical order. They all have this conflict and they work together.

The fourth force throughout history has been acts of nature. Drought, floods and pandemics, for example, have killed more people than wars and acts of nature. Nature has a big effect. And then, number five force is man's inventiveness, particularly of new technologies, okay? Because if you see that inventiveness that has raised per capita incomes, GDP per capita, any measures of living standards over a period of time and so on.

But it is also related to the first four that I said. Those four forces interact. Now, when we go back to your UK case, okay, they have a financial problem.

They and almost every country now is dealing with more of that internal political problem for the same reasons. Wealth gaps, opportunities gaps. What do we do? Who's got the power? I don't trust the system, kind of thing.

Okay, number three is we are certainly in an international great powers conflict, right? And it certainly affects Europe and the UK as we're dealing with not only the Ukraine situation, but the Russian situation. And what does that mean? And that relates to the money thing because, okay, where's the money coming from to have defense or military expenditures and so on and so forth? So that matters, right?

The geopolitical matters, climate certainly matters. And then, of course, technology, man's inventiveness. So everything could be looked through that lens. And so what does this mean for the UK if all other countries are going through this as well?

Doesn't that just mean that all countries are going to suffer equally? No, no, no, because they're not all equal. Okay? Some are more in debt than others. Okay? Some people are more willing to hold their debt than others. Some mean they have more resources. Some are bigger and more powerful. Some are less powerful. They're different, okay? They're all going in different conditions.

Some countries have surpluses. Some countries are not in the middle of where they're having a war. Are you optimistic about the future of the UK at the moment? No. No, because it has high debt. It has the social internal conflict. It's affected by the geopolitical factors.

And in terms of inventiveness, it doesn't have the culture that other countries have, like the US is that. Yes, the culture and the capital markets to support that at a scale that it needs to be supported to play seriously in the game.

And for anyone that doesn't know capital markets mean basically the investor markets is a way of saying, well, I mean, it gets you the money. In other words, you're a guy with H. You know, what happens is we have to enable people, okay? What works is finding great people, talented people and identifying those who you want to bet on and enabling them.

And that works. That's the most important force, much more important than money because you can see who's got the money and power. And where did they come from? Where did video come from? Where did they all come from? Okay. They're guys like you, entrepreneur in a sense, who's been enabled.

Okay, because you have the talent and people want to bet on you. And that's the capital market. So they give you money to help enable you because they want to bet on you. And then good things happen.

But are you optimistic about the United States at the moment? The United States is very much a big picture. No? I think it's very much in this issue.

So if I go down my list, it definitely has this debt, money economy problem. We can get into that. Okay. It definitely has the internal conflict power in which there is a fight between the left, the hard left and the right due to wealth and values gaps and people not believing that the system will work for them.

And so democracy is at risk because they believe they’re not going to follow the rules in the sense they don't believe the rules are going to. Number three, it's of course the leading one side in this great power conflict of the world. Right? In other words, yes, between the United States and the one side, let's say and China and the Allies force.

And of course, climate has an effect. And of course, then we have technology. The United States and China are in the big technology competitions. The others are really not in the game. They don't have the money, this innovation and talent, in a sense, to play at that scale and on.

So we have a great technology war which can be used to create great advances. But at the same time could be used for great conflicts. And so now the question is going to be who wins the technology war? Because the winner of the technology war is going to win all wars.

Okay. In other words, they'll win the economic war, they'll win the geopolitical war, because technology. And I'm not saying anything that hasn't repeated through history. Give me that historical context if you can. Just the technology, for example, nuclear. Nuclear won World War II.

And does this cycle go back further than just? Oh, no, it goes back that book. Okay. In order to understand these things, because I have to bet on what's going to happen. I'm a global macro investor. I studied the last 500 years of history and it happens over and over again in all cases.

So I could take the British Empire, I could take you through all the empires, the Dutch Empire before that, and all this. And it happens all the time.

I watched your videos about this and it was truly fascinating how predictable this stuff is. And the work that you've done to uncover this trend throughout history. For me it was almost irrefutable watching the evidence in. I think it's like a 40-minute video on YouTube where you show how this played out through empires.

And it begs the question, know, because when you live in the United States, when you're in the present time, you almost never assume that the empire you're in could fall. You just, you don't see how it can happen.

We're so strong, we're so great, you know, we're so doing AI over here, have money over here. Everything's good, the sun's shining. It's inconceivable, of course. People always think that the future would be a slightly modified version of the present.

And it's not okay, watch over decades, but it's like watching a person grow. Okay. You know, you watch your kid or you watch a person at your age, any age, parents, and that's what you see.

Yeah, okay. And you don’t see the life arc. Okay, but the life arc is irrefutable. But do you think it's conceivable that in the next 50 to 100 years the US could no longer be the dominant power globally?

Yeah. Yeah. More than conceivable. What do you mean by more than conceivable? I mean that these evolutions always take place and they take place in a certain way.

And that if you look at the probabilities and the paths and the symptoms, there is a challenge. The United States is facing a number of those challenges. And we're at a moment where it's a question of whether the system and the people can get control of the situations and deal with it strongly and well, in a way where they are not fighting to the point of damaging each other and damaging the prospects for the future.

But I mean, the United States is very innovative. Got these great innovative companies here, surely. Yeah. But you can't make generalizations about the United States and you can't make generalizations, by the way, about the markets either.

What you see is 1%, a small percentage, 1% of the population. If you're looking at the breakdown of incomes and also you're looking at the innovation, the stock markets, which stocks are doing well, who owns those companies and all of that, about 3 million people in a country of 330 million people are really unbelievably doing great. And you could pick the neighborhoods they're in and what they're doing.

And then there's the top 10%, let's say, which is the people around them and they're really, really doing great in that world. At the same time, the bottom 60%, 60% of Americans have below a sixth-grade reading level.

Wow. And that population, in terms of the basics, being productive, you have to be productive and be prosperous. What you need to have a successful society is to have broad-based productivity and prosperity. Okay. And that's a problem.

Okay. So which America are you looking at? And are you watching the war that's happening between these? It's a little bit complicated for me as a bit of an outsider, because I see Trump saying he represents those people.

But obviously Trump is from the billionaire class himself. So I mean, is he a savior for inequality? Is he correcting. I think he sees a lot of the problem. And I think he sees the debt problem, I think he sees the internal conflict disorder problem. And I think he represents the red, let's call it the red states.

I mean, you look at a map and there's red and blue and you see where they are, okay. And he represents that. And they're united behind him in terms of doing some things.

Okay. So he represents, let's call it the red side, which isn't located where the map shows red, and then there are the blue. And he views himself as somebody who needs to take charge and to do certain things. Others in that population would say those who, let's say, are not getting or having the food stamp program cut off or having other programs cut off that they're dependent on would say, wait a second, that's not representing me.

And so we have gone, that population has gone to a significant number behind him that are devotees. They're all in, okay. At the same time as we have the other side, which will have their devotees if, you know, we're in New York City, okay.

And the upcoming Mayor election will be an example of the two sides. Okay? And they will try to use the system. But there's a question. Will the system have enough support to work? Okay. But that's what we have.

Just to close off on this point of the UK in particular, if you were to try and fix it, what would you be aiming at? I say this because we do have a millionaire exodus that's widely reported in the UK, where I think this year was set to lose 16,000 millionaires.

When you look at the big, big countries like China, America, the UAE, the UK, we're losing more millionaires than anybody else. And I was wondering if you think it's fixable and if you were in charge of the UK, what you might aim at first?

You know, first of all, if you go back to the basic problem, which is there's too much debt, there are deficits, there's differences in education and opportunity levels and so on, the most important thing that you can have is a strong political middle.

To be analytically strong and also strong enough to get the people to do what needs to be done, even if they don't want to do it, to get to be productive. Now, that's an easy thing to say. It's not an easy thing to do, but you do need that strong middle.

And you do need to convey to people that you need to have this strong middle to change productivity. And are you in it? Are you in it? Are you patriotic and in it?

But you look at history. How did the United States come to be the United States? People will go to the places that are better than them, then stay in the places that are worse for them. This is fundamental, right? Okay.

So, you have to make the place better. Okay. Now, I would say also you can take pockets and they go into the pocket and let it spread out. But you also have to have this equal education or, you know, you got to strive for equal opportunity.

But anyway, it's a difficult question that I'm afraid I am incapable of solving. It was unnerving to hear the tone of your voice drop when I asked it. You seemed slightly as if you've kind of given up on the UK a little bit. Your facial reaction?

No, I'm just a practical guy. I'm a realistic guy. I made my money, I'm in the business. And it's my nature to try to be realistic and to bet on how things will transpire. And that's not healthy. The situation in the UK is not healthy.

And the situation in the United States is very risky in many ways. It's what we're describing. So, and then if you look, where are people going? Then you see the places that have the qualities we were talking about. They're civil, they're creative. The people aren't at war with each other.

What happens next in history? Well, usually there's a big fight for control, political revolutions and things like that. The system breaks down because they don't trust the system. So will the legal system resolve that? Will the parliamentary system resolve that?

These disputes satisfactorily to the satisfaction of those people and the other people who have different points of view and the sides won't believe it.

This goes back to Rome, it goes back to Caesar, know the Senate. This goes back through history all the time, right? And in the 30s, four major democracies chose to be autocracies. That happened in Italy, Germany, Spain and Japan.

What's autocracy for anyone that doesn't know the word? Well, it means a dictatorship, essentially of a limited number of people at the top who are autocratic, which means that they are directing things, rather than a democracy in which there are representatives of all different points of view that get together and follow rules to make decisions.

So the UK could become an autocracy, as could the US. I guess you're going to see a lot of pressure for that strong leader who will get control of things and make it work well. And you're likely to see two different views as to which side, the red and the blue sides, so to speak.

You're likely to see that type of clash. You said the US is playing a risky game itself. Is that from a debt perspective or other? From these things? From the debt, from the internal conflict, from the changing world order, the geopolitical world conflict? You know, I don't know.

We're playing with nuclear weapons in wars in different places. And then, of course, climate and then the technology war. If China does become the dominant force in the world, the dominant power, is that a smooth transition?

First of all, I don't think either have it as some or mutually assured destruction keeps everybody not having that kind of war. And then the systems, one system or another system wins. But that's an evolutionary process.

And I can't say do you think much about time frames? Because when, when I was going through the changing world order, there seems to be somewhat consistent or predictable time frames when these transitions happen, do you think about where we are?

Well, they're long-term, big cycles, right? It's like a life cycle. On average, they are about a life cycle, about 80 years. But it's not predetermined, just like your life cycle is not predetermined.

Like if you take care of yourself and I don't know, don't smoke, eat well, exercise and so on, so forth. Then you will probably have a longer life cycle than if you don't take care of yourself. And it's kind of like that.

And so you see them in history, they evolve. But you can see the symptoms, okay? You can see the actions and the symptoms, which, like taking a physical, then gives you a sense of where they are in their life cycles.

We're 80 years from World War II. 80 years from World War II. Yeah. And you're seeing the symptoms? Yeah, symptoms are clear. They're all in that book. You can see the charts of all the systems.

Is it something to be worried about or concerned about if you're in the United States? No, shit. Yes. And then the question is how you as an individual handle it. How do I as an individual handle it?

Well, first of all, I think you have to be aware of the situation and the risks for me and my family, though, in terms of risks and how I should counteract those risks. Is it a case of me saving for a rainy day? That's part of it, yeah.

There's a saying in Hong Kong, a Chinese saying, which is a smart rabbit has three holes. And what that means is, you can see, is it the UK or the US? And I can then move to the better place and get out of the place.

That's a terrible place. So can I successfully be an immigrant or whatever and change my location? Throughout history, that's been important. So the ability to go to good places and away from bad places, that's part of it. Secondly, building your financial strength is important, which has to do with how you earn, spend and save.

That will determine the amount. And then what you do with that amount, invest. And so how you invest is also important. So if you have your financial ability and you can make the move and then you have knowledge about what's happening so that you can change things, those are the things you need.

So on that first point about a smart rabbit having three holes, is it therefore a better decision at this point in time to not buy a house? Because a lot of people end up buying a house and it anchors them to a place, and it means that they then have to pay into a mortgage.

So a lot of the financial advice most of us have growing up is when you get enough money to buy a house, move in, pay that mortgage for 25 years. But if I'm in a new economy, in a new world, and flexibility and the ability to get up and go and move, as there's value to that, the ability to move, capital matters.

And if you look at history, this has been an important consideration. Yes, so it matters. So if you're nailing yourself down and that's your primary capital and it's nailed down there, then that does limit your flexibility.

And on the point of earning, spending and saving, wonder what you’re a... you're a father, aren't you? Yeah. What advice are you giving to your children about earning money in the current world where they should set up their shop, the skills that are most valuable to acquire the technologies?

We talked about the US being a place to one of the better places to build your career for all the reasons you described. Well, that's, you know, that's kind of like the particular that you asked me for. That's below the level of the higher level.

Okay, the higher level is. I have a principle. Make your work and your passion the same thing. And don't forget about the money part, okay? If you make your work and your passion the same thing so that you're really enjoying your work, you'll have an enjoyable, satisfactory life and you'll probably be better at your career that as a result you probably advance and so on.

So you have a happier life and you will have probably a more successful life. But it is true that the careers that you choose will have financial implications.

And if you say I want to be a poet or something along those lines, you better consider the financial implications of that. That doesn't mean that you have to go make a ton of money because I think that that I think a lot of people fall into that trap, that they think the money is like vast amounts of money is vast amounts of success.

And that's not true. In other words, is your work and your passion the same thing? So I think that what brings people happiness is meaningful work and meaningful relationships. If you have meaningful work that you're into and your passion and your work is the same thing, and you have meaningful relationships, whether through that work or beyond, you're going to have probably a great life.

Oh, and so you have to keep that in mind. And it doesn't have much correlation past a certain level of money. It doesn't have much correlation with that well being with the amount of money you have.

And if you see studies across societies and you'll see that past that certain basic level, there's no correlation between the amount of money they have and how much happiness they have or well being that the highest level of correlation across societies and studies of happiness and well being is community.

Do you have a sense of community? Do you have those around you who are your community? You'll live longer that way you'll have a more joyous life and it'll be a better outcome, but anyway, so thinking about those things I think is important based on your life cycle in this book, principles, your guided journey, create your own principles to get the work and life you want.

Do you think you have to play different games in different seasons of your life cycle as it relates to generating wealth? And what I'm talking about here is really like risk profile or what I should be optimizing for. Should I be trying to hang around with Ray Dalio or should I be focusing on the job that pays me the most?

First of all, the answer is yes. And the second question you asked, the answer is that you should be around the people who are the best people to teach you to operate by, the mentors and the learnings and so on.

You should be around the best people. And when I say best people, I mean people of good character and good capabilities. So you should be around the best, not the job that pays you the most.

And I could explain why that is. And yes, in terms of that arc, you will play it differently at different parts of your life cycle. So in the early part of your life cycle, what you're going to do is.

I mean, the more learning and experiencing is the most important thing that you can do in learning in the early part of your life cycle, it's like you're going to make your choices, what direction am I going to be in, and so on, so forth. So learn. Okay, that's most important.

And then what you're at the end of your life cycle, you're pretty much relieved from all of that. You're not going to be working to earn, okay, you're going to be free of all of that. You're going to have and you have freedom of choices and so on.

And you're going to be thinking about transitioning. How do I transition well-being or how do I transition my wealth or how do I transition? And so on. That's where you are. Still learning is a joy.

But at the same time, in terms of trying to accomplish, it's not the same at your late part of your life cycle as it is in your early part of your life cycle. So I want to ask about your early life cycle and what the most important strategic or wealth generating decisions you made that you would encourage everybody to consider if their nature is aligned to yours.

Okay, my nature was I hated school. I didn't like the whole thing of remembering this and remembering this and then give it back to me. And there were these know history, like there's William the conqueror in 1066 and what did he do?

And all of that was what education represented. And when I was 12, a kid I earned money with odd jobs. Like, I had a paper route and I mowed lawns and I caddied and I took my cadding money. And when I was 12, I got. Everybody was talking about the stock market, so I put some money in the stock market.

I didn't know what I was doing, of course, but I picked the stock that was the only stock I ever heard of that was selling for less than $5 a share. And my reasoning was I could buy more shares, so if it went up, I could make more money.

Okay, that was a stupid criteria. But it was a company that was about to go bankrupt and another company acquired it and it tripled in price. And I said, I like this game. So I got hooked on the game. I'm still hooked on the game, right? So I liked it. Okay?

That affected me. So I barely got into CW Post College. Then I went to Harvard Business School. And that opened my eyes to the world in many ways, because of who were there and what it was like and all that.

You know, the best and the brightest kind of thing. But I always still traded markets because I always played the game. I can tell you stories. You want a couple of quick stories?

100%. Okay. So I'm clerking on the floor of the New York Stock Exchange between graduating from college in the summer, between graduating from college and going to Harvard Business School. And that is the summer of 1971.

And on August 15, 1971, Richard Nixon gets on the television and says that, you know, the promise that you were going to be able to take your paper money and go get gold. You can't do that. And we're going to cut that off. He didn't say it in exactly those words, but money then was gold.

And what we think of as paper money, fiat money, was claims on the gold. So I walked on the floor of the New York Stock Exchange that summer, and I thought the market was going to go down a lot.

And the market went up a lot. And I didn't understand why, because I never went through a devaluation before. And I studied history, and I found that in March of 1933, Roosevelt got on the radio and made the exact same announcement that you're not going to get your gold, and they're going to print the money.

And when you print a lot of money, you have that, okay? So I learned that history of things that never happened in my lifetime before, were important things to understand.

Okay? I went back then to Harvard Business School for two years. And two years later, as a result of all the printing of money and the oil shock because of all of that. We had the 1973 oil shock. And now because of my background, I'm hired to be director of commodities at a Wall Street brokerage firm.

Okay. Which. And then all sorts of things happen. Turbulence and so on, so forth. That firm went broke. I went to another firm. And I was rowdy. I wasn't your typical good employee. You know, follow everything.

So, I got fired. And that was in 1975. Then. But clients all liked me for things. And so they would pay me for advice. And I continued to trade the markets. And that's when I formed Bridgewater. Okay.

What? That was 1975. I just passed Long Bridgewater 50 years later. Okay. So there's a journey there that has failures and successes and learnings. I have a principle, Pain plus reflection equals progress.

Okay? Your best learnings come from the pain. It's a message. Pay attention. Learn how reality works and how to deal with it differently. So you have principles for dealing with reality better. And I learned that process.

And from that process, my company, Bridgewater became the largest hedge fund in the world. Extremely successful, managing how much? $150 billion. 1,500 people. $150 billion. And that's made you a very wealthy man.

And made me a very wealthy man. Which, by the way, was not my intention. Okay. I just wanted to play the game. And to have meaningful work and meaningful relationships. That was paramount. But it happened to be the game I played.

If you're good at the game, you make a lot of money. And now I'm at a stage in my life where I want to pass things along. I need to pass things along, right? So hence the books, hence our conversation. And here we are. That's the life arc.

But I learned a lot. And so that's the journey. I think B2B marketeers keep making this mistake. They're chasing volume instead of quality. And when you try to be seen by more people instead of the right people, all you're doing is making noise.

But that noise rarely shifts the needle and it's often quite expensive. And I know, as there was the time in my career where I kept making this mistake, that many of you will be making it too. Eventually, I started posting ads on our show sponsors platform, LinkedIn.

And that's when things started to change. I put that change down to a few critical things. One of them being that LinkedIn was then and still is today, the platform where decision-makers go to not only to think and learn, but also to buy.

And when you market your business there, you're putting it right in front of people who actually have the power to say yes. And you can target them by job title, industry and company size. It's simply a sharper way to spend your marketing budget.

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Just for context, people don't like talking about money and I understand it, but you're a prolific philanthropist. Also Google says that your net worth is in the tens of billions of dollars.

And I'm sure there's some people that have clicked on this conversation and aren't aware of the scale of wealth you built up and the scale of Bridgewater Capital and how prolific and famous it is in the investing world.

In that 50 year life arc, one of the things you mentioned is pain. All of us will encounter pain. And you said pain plus reflection.

Reflection equals progress. How have you learned to deal with pain? You've had a lot of pain in all facets of life because you've lived the life arc and you continue to.

What's the best principle for dealing with pain? First of all, to calm yourself down and to get centered. Meditation has had a big beneficial effect on my life. We can get into meditation in a minute of how it has, but the ability to, you know, in a sense, calm yourself down and when the time is right to reflect on what's happened, both to understand how reality works.

You want to be a hyper realist? I understand how reality works. Therefore I need to do this under this set of circumstances, which means developing principles. And so what I did when I would do that, any time, whenever I would think what should I do? Whether it painful or not, I would pause, reflect on what should I do if that happened again.

And that's how I would write down my principles. And what I did was I wrote down a lot of principles. Principles, a lot of principles. If this happens, that happens and whatever. And so I wrote these principles down.

And then I found that in investing, if I can computerize those decision rules, I could back test them, see how they would have worked and so on. So I built systems, decision-making systems, computer would make decisions.

So it was AI before LLMs, but it was AI to have decision-making criteria. So it would be like I would make a computer chess game that would play while I am playing my mental chess game, what moves we would make and it's completely automated and so on.

But what I'm trying to say is that reflecting on how does reality really work and what do I do when this happens to that happens is the development of principles. And that has been invaluable.

And it also makes me see things differently because a lot of people and if I didn't do this, I would be seeing almost as a blizzard of things coming at me. Instead, I see everything as another one of those.

So let's say, for example, it's a species. So it's like seeing, okay, what kind of species is it and how do I deal with that species? So it's one of those. Rather than just a lot of things coming at me.

Pattern recognition of ye. But let's say if you think of a. It's a duck. Okay, okay. Oh, okay, it's a duck. How do I deal with a duck? Or it's a lion. Okay, how do I deal with a lion? Be rather than just a lot of things coming at it.

So this principle, thinking and seeing it that way had a big effect on the quality of my decision making. And that helped. Two questions I had there. To become a principled thinker, I need to do more reflection, right?

And then the other thing, think about how does the machine, how does life? How do these things work? So that's what I mean. Okay. And to write that down.

Yeah, yeah, write down your thoughts. I find sometimes what I would do is I'd dictate them into my iPhone. OOK. I'd say, okay, Ah, this is hell. When you're making a decision, why did you make that decision?

So not just make a decision, but think about the criteria you're using to make the decision. Also my emotions, my trauma, my insecurities, my anxiety. Right. And you might say, when reflecting on that, is that helpful? Is that harmful?

And what do I do about that? Like, for example, what you're referring to is, yes, that the emotions and the things and all of those. You have to understand that basically the brain got two parts to it, right?

It has the logical part of your brain, reasonable tries to reason things through, which is conscious. And then it has the subconscious mind, which is the subliminal that is really driving you.

And so when you can reflect, okay, how my emotions entering into it, what I. And so on, and you can think and you can align that that’s very powerful. And meditation, by the way, naturally does that.

Because what you do when you meditate, maybe at times come. I should explain meditation, okay. How it works. What you do is it's a process by which you sit quietly and you repeat in your mind what is called a mantra, which is a sound that it's a word that has no meaning.

Let me say the most classic example that would be om. Okay? So you're quietly there and you go with your breath, you go like that. But you need to be taught. But anyway, when you're doing that because your Om is in your mind or your mantra is in your mind, you're not able to have other thoughts.

You'll see yourself wavering between doing that and staying on the mantra and then having thoughts. And then you go back to your mantra. When you are in the mantra a lot, then it disappears, the sound disappears, and you go into your subconscious mind.

That's what they call transcending, Transcendental meditations, the type of meditation I do. And so you go there, and you're not in a conscious state and you're not in an unconscious state. You're in a conscious state.

So it's a different state. Like if you hear the noise, you would hear that noise. It would be big. Not when you're sleeping, but when you're in your subconscious state, then it's relaxing. It's helpful.

And this process helps to bring your conscious state and your subconscious state into alignment. In other words, you recognize both and it calms you down. It's like the ninja and the ninja movies.

They're fighting, but it seems in slow motion. The camera shows them in slow motion and they're doing whatever they're doing along that it kind of makes you in that kind of state of mind, so that you're dealing with what's coming at you in that way.

And so what you referred to is these things that happen. And how you deal with those is really important to the quality of your decision making.

How influential was Transcendental meditation in your success? Oh, enormously successful. Enormously significant. Very, very significant. In other words, that way of seeing things and how often and by the way, I would say there's a serenity prayer.

The serenity prayer is, God, give me the serenity to accept that which I can't control and give me the power to control that which I can and the wisdom to tell the difference.

O and so how you approach these things, we're talking about reflection. You ask me reflection. O if you can reflect in that quality way, then you deal with anything.

And I've dealt with the worst possible thing. I lost a son. Oay. And I would have rather died. I would have rather lost everything to lose my son. So it's the worst possible thing.

And then to see what it did, the damage and the harm, and from family, terrible. Okay, then to go through that with meditation, with reflection and so on was invaluable. And people have their own challenges.

But to be able to do it that way, I really urge your audience I urge you to learn that. That's very helpful.

How did that tragedy change your perspective and your principles in any way on life, on happiness, on success, on all these things that you've written about?

Well, again, I go above it and you reflect on the life arc. And I realize at that higher level that that's what the life arc is like. In all my books, there's this arcing. This arcing here. Here's a bigger version of it.

Yeah, there's this arcing, okay? I don't know if your camera sees that, okay? Whatever it is. And that's what life and evolution is like to me. Meaning, you make advances, you will have setbacks, okay?

If you reflect well and you learn how reality works and how you will deal with it, you will get past that and go on. And that's just what it is. That's just the way life is.

And if you do that well, then that's your best possible life. Are you religious? Are you a religious person? I'm not religious, but I'm spirit is that element that nobody knows.

But there is the way people should deal with each other. There is karma, okay? All religions, there's a part of them that said, little things I can do to help you can make a big difference in your life.

And little things that you can do to help me make big difference in our lives. And so it's practical, and it is also joyous, okay? That creates a relationship.

And we talked earlier about how that meaningful relationship is like the source of great happiness. But when you have a community and you do that, you have a better society.

And almost all religions will tell you that there will be elements of those. And when I believe in spirituality, what I also mean is, we're all part of this greater whole, okay?

We're all part of the greater whole. And if you could see yourself as part of the greater whole and love the greater whole and whatever that is, spirituality really O and so I will go through my life arc.

Oay. And I will die. And I'm comfortable with that, okay? In that, okay? It's all part of the greater whole. Nature and whatever it is. That's true.

I can't tell you about other things, but I do believe in the things I just told you. When it comes to living a successful life. We've talked about having dreams and understanding your nature and aspiring for things and then understanding reality, which transcendental meditations are great mechanism and vehicle to do.

And in your book about a successful life, you talk about plus determination plus determination, hard work. If I want to be a successful man or woman, how important do you think hard work is?

Well, gives you power. It's very important. Right. Some people. Some people, you know, I'm not saying they want to choose it, but the irony of things is there are first-order consequences and there are second-order consequences.

This is like a rule of life. O and most of the time the first order consequences, whether they’re likable or not, has the opposite quarter second-order consequences. What I mean by that is like eating or exercising.

Oay eat the foods you like. Second order consequence is probably not going to be good. I don't want to exercise. Second order consequences won't be as good. Working hard, which gives you strength.

Where does strength come from? I mean, strength comes from working hard. So working hard will give you power. Power will make things easier and make things better. That's just the way it is.

And being open-minded while you do it. Something open-minded? Yeah. I say the importance of being open-minded and assertive at the same time.

I watch people becoming so tied to their own opinions like this is the greatest tragedy of mankind, the greatest tragedy of mankind, because it so easily can be fixed. Is holding a strong opinion that is wrong that you could have made right better if you were open to learning more.

If you said I want to be stress tested, I want my thinking to be stress tested. I want to make sure that I'm making the better decision and so I'll be challenged. But a lot of people view that challenging like a fight.

It's not a fight. If somebody holds a different opinion. It should prompt a curiosity. You know, I don't know, am I wrong or is they wrong? Is there a 50% chance? I don't know, maybe I'm wrong.

So it should prompt curiosity and in exchange to try to make sure that you're seeing the whole picture and so on. But subliminal instincts are I'm going to stick with it and I'm going to have a fight. That's a problem because there's too much on the line for so many people. It's subliminal.

It just goes back to the mind thinking that the intellectual challenge is a fight and it's egotistical. You know, ego. I must be right. As an investor and entrepreneur, that's obviously particularly important because you're constantly dealing with new information and feedback which you need to be flexible.

That was one of the two things that changed my whole direction, had made me successful. I can explain it if you want. Please. 1979 and 80 I had calculated that American banks had lent more money to foreign countries that they were going to be able to pay back and that we were going to have a debt crisis.

Very controversial point of view. In August of 1982, Mexico defaulted on its debts and over the next decade many other countries did and it caused bank problems. However, at that time I thought things were going to get bad.

And that was the exact bottom in the stock market August 1982. So I couldn't have been more wrong. I lost money for me. I lost money for the clients. I lost money. I was so broke that I had to borrow $4,000 from my dad to help to pay for family bills.

Because I was faced with choice. What am I going to do? And do I go back to more on Wall Street, get a tie, get on the train and go back to that which is again in my nature or whatever? And two things changed me.

Okay, reflection. First of all I learned what we were just talking about. I learned humility and fear of being wrong and open-mindedness. So I wanted the smartest people who I could find to stress test my opinions because I always realized I could be wrong.

And then I learned how to diversify my bets so that I could dramatically reduce my risk without reducing my returns. That was the bottom. Okay, from that point all the way over that following those principles took me to the biggest hedge fund in the world, the most successful and so on.

Because I applied it to the market, applied it to what we did and so on. So that notion of reflection and then how do you deal with what reality is like?

And then okay, learn radical open-mindedness. In other words, there's a principle in the book you have to take in before you put out or that decision-making is a two-step process. First take in then decide. Okay, so yes, open-mindedness doesn't in any way minimize your ability to decide.

You still have the freedom to decide. But it's crazy not to be open-minded. You recognize that the biggest threat to good decision making is harmful emotions.

And that two-step process is first learn and then make the decision. Which is funny because it sounds simple but when you said it. I think about all the worst decisions I've ever made in business and I missed step one.

I forgot to take a minute and do the evidence gathering or the information gathering process. Yeah, just smart people care about your decision. Say stress test me. Why don't we do that? That ego and also instinct that that's a fight.

Is that any advice you would give me on becoming a better decision maker? So I have a fund, I have many businesses. Is there any sort of practical, simple foundations of becoming a better decision maker that we haven't talked about?

Get smart people to interrogate my thinking. Be open-minded. I think we've talked about almost all of them, I think then you have to know about how to leverage yourself.

Okay? In other words, as you do more and more, how do you do more and more when your brain has a capacity limit, okay? And there's only a certain number of hours in the day or the week, okay? You have to know how to do it through others.

Okay? It's knowing how to pick others and orchestrate well. It's like running a symphony or whatever. Get the best players, okay? When I say good character and good capabilities and orchestrate them well, and then provide that leverage.

Like when I was doing the Most, I had 30 direct reports, whatever the number is, the process is how to get more out of a minute or a day, not how to work harder. Okay? It's how to leverage yourself.

And you're going to leverage yourself by picking the right people who you can trust. They're not going to screw you. They're going to operate in your interest and they're going to be capable.

And so a lot of people, what you can do is you can deal with them and then you can say, like, I would deal with them on this 30 reports. I'd have maybe an hour meeting with them once every two weeks, and they'd go off and do things.

And when you do that, you can even find people who are much better at things than you would be if you did them. Because if you have these different things, okay you're better because otherwise you don't have the capacity.

You have these two key challenges to overcome as an entrepreneur, which is finding these great, capable people that have great character and then bind them with the right culture to make sure that they do the best work.

Right? In other words, it's meaningful work and meaningful relationships through radical truthfulness and radical transparency.

Radical truthfulness and transparency. First, if you can have meaningful work and meaningful relationships, the people are on the mission with you. Wow, that's fantastic.

But you better be truthful and transparent. That'll show that you're honest and you because you have to get a truth, including what people are bad at and how to deal with all those things.

And most people hide them. They don't bring them out into the open, okay? Everybody's worried about hurting each other's feelings or that. And then so they're not honest with each other.

That's the barrier we talked about, the barrier of disagreement. It's like that, okay? I don't know. Are you good at that? Are you striking out? If you're striking out and what is it? How do we deal with it?

You better talk about that clearly because you need to have a team of players, you have to work yourself. So your team is an A team of players who are tight.

How did you do that, Bridgewater? How did you make people honest? O well, first of all, had a policy talk behind another person's back critically. That happens three times you're out.

And then I would have radical transparency so everybody could see everything. So you could see why I'm making decisions, that I would reflect.

But the main thing is know you know if it's happening or not. Okay. And I made that comfortable because that's ordinarily uncomfortable.

We talked about the fact that there's an intellectual un and there's an emotional subliminal. You oay. I made them understand, like if I had a team, a football team and so on, that this is going to be better for the team.

It's going to be better for you. And you'll have your evolution. Because what do you want to have? Dishonesty? Do you want people to think one thing about you and really say something different?

How is that going to work? So there's an intellectual. Okay, we believe it. And then also by having meaningful relationships, I mean, I don't force them.

I create a culture of meaningful relationships so that they know each other for a long time. They go to each other's parties or they go to each other's funerals, there are baby showers. There are these things. Not that any bad. I created clubs.

I said any club that you want to create that has more than 20 people, whatever it is up to $500 per person and I'll pay for half. So I don't care what it is if it's play softball or play chess or whatever it is that you're enjoying each other's company or you want to go to ball games or something.

I don't care what it is. I'll pay for half up to that. Nobody has obligations to or something. But if I have that kind of meaningful relationships so you can talk honestly with each other, I found that very helpful.

And you built a famously built an idea meritocracy, which in my understanding means where the best idea ends up winning in the company versus just your idea.

Because you're the most powerful person in the business. Right. I mean, what do I want? I want the best idea to win. This sounds simple, but.

But again, it's not how businesses operate. One of the fascinations I've always had is that when businesses get bigger and they have more intellectual horsepower by, I mean if you just added up how many brains they had, they sometimes get less innovative and it feels like the CEO.

Well, because they become more bureaucratic and more fragmented. Yeah. Okay. I found it to be true. And it's well established fact that if you get a group of people past a certain size, which is 75 to 100 people, they don't know each other oay they start to become different and then you lose those relationships, you lose a lot and so on.

I found it because at the holiday season every year, what I would do is I would write everybody notes, long notes in their cards and I would pick an individualized holiday gift for them.

And when it got to be the 67 people, I remember the year it broke my back. I mean, I just couldn't do it. Okay. And I realized that at that point I was going into another frame.

And so it's an organizational reality that you can keep that group. And then what you have to do is then you have those different areas and you have to create cohesiveness between those different and cohesiveness common mission.

And how do you do that between that? So like for example, when we would have our holiday party where it used to be, everybody would be sort of go in and you have a holiday party and everybody together.

What I found out is we had a big arena that we would go to and I'd have both. I'd have, okay, that department is in that area and whatever. And then they come out and they all mingle together and so on.

So there's an organizational thing that you've got to realize in terms of culture and management of that. It's like villages in a city, I guess. You basically keep build the villages and then.

Good example. Yeah, interesting. Okay. Yeah. Our media companies at that exact point, now it's at that 90 odd people. Okay, there you are.

So when you said 75 to 100, I was like, ah, interesting. I was thinking about all the things I should be doing now to counteract some of those adverse effects of the culture splintering or relationships breaking down.

But I guess you've described it there. Interesting. And I have to say, one of the things I found to be most important in leadership is decision-making. When you think about the best groups you've been a part of, both historically or maybe in your life, what were the common traits that worked well?

What you've just touched on, the fact that if you make a genuine effort to build those meaningful relationships, the relationships and the context within which your decisions operate, it has to be more than just the work itself because you're bringing in humans into the process.

So to tie a few threads together, you said before that capitalism is a better system than others. The incredible wealth creation it allows.

However, it seems like we've grown to that point where wealth but not well-being is being generated. And therefore, the system you were just describing, where individuals might succeed and acquire wealth but also may not necessarily succeed at everything else, increases pressure against the system.

Are you optimistic for the future of capitalism? Well, in long-term cycles I think that most systems evolve and work out solutions.

I think that this might be a rocky period we'll have to figure out a lot of things, okay? So whether capitalism takes a new form, that's always possible, but they become more adaptive and become more resilient as long as people talk about it openly.

I think that when you get wealth gaps and opportunity gaps, we need to build a healthier society and I believe we will. And I mean in the long-run that's my experience.

And just to connect to the end of threaded conversation we've had around AI, what you think of the impact AI is going to have both positively and negatively in that industrial revolution space? Well, that's going to have an interesting effect because we are in a moment of transition.

AI, technology, and that application will raise the capacity of productivity, okay? And that will be the productivity and growth that follows.

But how people adapt to it and how people agree is an interesting question. And I must believe that if people can see it as a way to adapt with and create a better life and contribute to society positively, the cultural evolution and possibly the way we think about it is still in process.

Just like all transition periods, especially ones that have based scope for miles are very rocky like the industrial revolution because it creates so many shocks to jobs and so many shifts in workforces. That could give openings to those who are entering the workforce today to create great wealth.

But at the same, we're still trying to figure out the pathways that work for everyone. Yes.

Okay, let's close this out with a final question. If you could leave a note to the world of upcoming entrepreneurs, investors or people setting out for a life of entrepreneurial independence, what would that note say?

At the heart of what I would want to convey is that, remember, you don't have to be right all the time. It’s okay to be wrong. It opens doors to learning and adaptability.

Your ability to learn and adapt to the reality of your situation will dictate how far you'll go. Because if you sit there and hold on to your opinions without allowing thoughtfulness and open-mindedness to influence you, I can guarantee you won't achieve the heights you'll imagine for yourself.

Never stop learning, adapt, and keep your openness to all possibilities. And ultimately, the values of meaningful relationships and a sense of community will enrich your life more than any measure of wealth.

Okay, thank you. Thank you for all of this.