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Pay attention. Pain plus reflection equals progress. And from that principle, my company became the largest
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hedge fund in the world. Managing how much? $150 billion. But I learned that history
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of things that never happened in my lifetime before were important things to understand in order to predict the
00:00:18
future. And we can get into that if you want. Peace. So Ray Dallio is the legendary billionaire
00:00:24
investor who decoded the cycles of human history to predict financial crashes. build the
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world's largest hedge fund. And now to warn us about what lies ahead. Are you optimistic about the future of
00:00:35
the UK? No. What about the United States? No. Why? Okay. In order to bet on what's going to happen on the global economy, I learned
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that there's five big forces that create a big cycle that's repeated through history which lasts about 80 years. The
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first is the money debt force that creates wealth and opportunities gaps
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and it's connected to the second force, the internal conflict where you don't trust the system causing wars between
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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
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force. In other words, international conflict. Then there's acts of nature. And then number five is man's
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inventiveness particularly of new technologies. Now the question is who wins the technology war because the
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winner of that determine how the new world order works. Is it something to be concerned about? No. The question is how you as an
00:01:28
individual handle it. How do I as an individual handle it? So there's building your financial strength, flexibility, the importance of
00:01:35
being open-minded and how to get more out of the minute, not how to work harder. And I really urge your audience
00:01:42
to learn all of this. So, first of all, I see messages all the time in the comment section that some of you didn't
00:01:48
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.
00:01:54
It's the simple, it's the free thing that anybody that watches this show frequently can do to help us here to
00:01:59
keep everything going in this show in the trajectory it's on. So, please do double check if you've subscribed and uh
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thank you so much because in a strange way, you are you're part of our history and you're on this journey with us and I
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appreciate you for that. So, yeah, thank you. [Music]
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Ray, I I want to describe to you who's listening right now. And the question I
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have for you is what is the most important thing that this persona of person should be thinking about at the
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highest level right now. So the person that's listening is someone who is intent on improving their life. They're
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they're really interested in business, potentially starting their own business. They they care about where they're
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investing their their time and energy and also where they're setting up their home based on in terms of geography.
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They are aspiring to accomplish some goal. They're probably between the age of 18 and 50 predominantly and they are
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very very interested in understanding what's happening in a world that feels incredibly
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scary, fast-paced and uncertain at the moment. This is a very difficult question, but
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if anyone I was going to ask anyone, it would have to be you. What What's one of the first things they should be considering at this moment to safeguard
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their future, their family, their finances? I don't think it's a difficult question. I um I think it's it's very clear. They
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have to understand how the life cycle works. Okay? They have to understand it
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how it works. We were just talking before, you know, in the book and there was the arc of the life cycle, right?
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And you have to understand that you're on an adventurous journey. Okay? And you
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have a certain nature. You know, those qualities that ma make you have your preferences and so on. And
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then you're going after the things that you like and you're learning and it's
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going to have the ups and downs and so on and how you approach that. So you
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asked from the higher level if I'm looking down you know like that life cycle that arc what's that journey like
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how do you approach it you know what are your principles how do you even learn how to approach it that's why we're
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having these conversations right y so that's clear you know what's your nature how's the journey how do you find
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the path that's suitable to your nature and then you'll go down that path and
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you'll discover and you'll evolve. What's that like?
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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
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environment creates their different nature. You know, we have our preferences, our inclinations. We think
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in a certain way. You chose to be entrepreneurial. Okay? You're living out
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your nature. Okay? This isn't for somebody else. You know, some people have a different nature. Okay? They
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would like to have the stability of a job and clarity and so on. So when you
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have your nature, you want to know that and then find the path that is going to
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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
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should I be in the US? Well, that depends on a lot of things, but that's a tactical question.
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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.
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Why? The US has a culture of um entrepreneurship, inventiveness. There's
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a whole different culture like in Europe generally speaking and in and in the UK
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there's an establishment culture, right? And here um you could be 25, have a blue
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streak in your hair and have the talent, but if you got the talent to pull it off, you can get the resources and you
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can be an entrepreneur. It's there's a culture of that. That means that it's happening more. That's why you even see
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the differences in the economies. Okay, where is the inventiveness really happening? Okay, it's happening here. So
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I would say if you want to be an entrepreneur, this is an environment that's particularly conducive to being
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an entrepreneur. So what is your honest perspective about the UK at the moment? The UK has a financial problem. Uh the
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government has a debt problem and it doesn't have enough money for what it wants to do and what it can do. And so
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what you see is the nondom problem, people moving and so on so forth. And
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throughout history, when you have these sorts of things, then there's great clashes in people. Okay? And the UK has
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been in decline since the war. Even the development of the capital markets, can
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you raise capital there? All of these things are much worse than they are in
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the United States. And it leads to clashes. He said, "Of course, you know, there are five big
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forces that create a big cycle that lasts
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about 80 years, give or take 50, let's say. And the five big forces are there's
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a money, debt, economy force, okay? Debts are
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spending power. So what happens is when you give somebody credit they can spend and then but it also produces debt and
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debt has to be paid back and so what happens is if there's not enough income
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to pay back the debt then you have um debt rising relative to income it
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squeezes out spending people don't want to hold the debt assets and so on the UK
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has gone through that and has gone through that and it's connected to the second force And we're all going through
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this in varying degrees. The second force is the internal political and social force. In other words, like
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between the left and the right with wealth gaps and opportunities gaps. We
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have big wealth and opportunities gaps. So when you have big wealth and opportunities gaps, there's conflict.
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Okay? Conflict between the left and the right. And when you get to the situation where you don't believe the system is
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working for you and you don't trust the system, then there are wars. There are internal conflicts over over that and so
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on. So the third force is the geopolitical force. In other words, u
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there's a cycle that usually goes from one big war to another big war. So the
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last war ended in 194544 and we began a new order in 1945. And
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the way that works is that the winners of the war determine how the world order
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works. They draw borders. They say here's how it's going to work. And that's the new order. Okay? And that
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continues until there's a rising power challenging an existing power and the
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existing world order which typically is deteriorating at that time. And then you have international conflict. Okay, these
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orders, there's a monetary order, they all break down. There's an in internal
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political order, they all break down. And and there's a geopolitical order. They all have this conflict and they
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work together. The fourth force throughout history has been acts of nature. Droughts, floods, and pandemics,
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for example, have killed more people than wars. And acts of nature, nature
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has a big effect. And then number five force is man's inventiveness particularly of new technologies.
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Okay, because if you see that inventiveness that has raised per capita
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incomes, GDP per capita, any measures of living standards over a period of time
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and and so on. But it is also related to the first four that I said those four
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four forces interact. Now when we go back to your UK case, okay, they have a
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financial problem. they and almost every country now is
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dealing with more of that internal political problem for the same reasons. Wealth gaps,
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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
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are certainly in an international great powers conflict, right? And it certainly
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affects Europe and the UK as we're dealing with not only the Ukraine situation but the Russian situation and
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what does that mean and that relates to the money thing because okay where's the money coming from to have defense or
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military expenditures and so on so forth. So that matters right the geopolitical matters climate certainly
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matters and then of course technology man's inventiveness. So everything could be looked through at
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through that lens. And so what does this mean for the UK if all other countries are going through
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this as well? Doesn't that just mean that all countries are going to suffer equally? No. No. No. Because they're not all
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equal. Okay. Some are more in debt than others. Okay. Some people are more
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willing to hold their debt than others. Um some means they they have more
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resources. Some are bigger and more powerful. Some are less powerful. They're different. Okay. They're all go
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in different conditions. Some countries have surpluses. Some countries, you know, are not in the middle of where
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there's having a war. Are you optimistic about the the future of the UK at the moment?
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No, no.
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Because it has high debt. It has the social internal conflict. It it's affected by the geopolitical factors.
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And in terms of inventiveness, it doesn't have the culture that other countries have like like the US. Is that
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Yes. The cult culture and the capital markets to support that at a scale that
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it needs to be supported to play seriously in the game. And for anyone that doesn't know capital markets mean basically the investor
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markets is way of saying well I mean it gets you the money. In other words, you're a guy with you know
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what happens is um we have to enable people. Okay. What
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what works is finding great people, talented people, and identifying those
00:12:26
who you want to bet on and enabling them. And that works. That's the most
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important force, much more important than money. Okay? Because you could see
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who's got the money and power and where did they come from? Where did Nvidia come from? Where did where did they all
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come from? Okay? There are guys like you, entrepreneur in a sense, who's been
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enabled, okay, by you because you have the talent and people want to bet on you and that's the capital market. So they
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give you money to help enable you because they want to bet on you and then good things happen.
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But are you are you optimistic about the United States at the moment? The United States is very much a big
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picture. No, I think it's very much in this issue there. So, if I go down my list, it definitely has this uh debt
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money economy problem. We can get into that. Okay. It definitely has the
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internal conflict power in which there's a fight between the left, you know, the
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hard left and the right due to wealth and values gaps and people not believing
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that the system will work for them. And so democracy is at risk because they
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don't believe this. They they're not going to follow the rules in the sense they don't believe the rules are going to uh number three it's of course the
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leading one side in this great power conflict of the world right in other
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words yes between the United States and the one side let's say and China and the
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allies their allies on the other side. I mean in the news you just saw the meetings of Xi Putin Modi and that group
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over there walking down you know and okay so now it should be pretty clear
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how the sides are lining up okay you it's always better to be in a place that's not in one of those wars like
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stay out of wars um and of course climate has an effect and of course then
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we have technology the United States and China are in the big technology compet competitions. The others are really not
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in the game. They don't have the money that this innovation and talent in a sense to play at that scale and so on.
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So we have a great you know technology war which can be used to create great
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advances but at the same time could be used for great conflicts. And so now the
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question is going to be who wins the technology war because the winner of the technology war is going to win all wars.
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Okay. In other words, they'll win the economic war. They'll win the geopolitical war because technology and
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I'm not saying anything that hasn't repeated through history. Give me that historical context if you
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can just for the technology for example nuclear.
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Yeah. Nuclear won World War II. And and does this cycle go back further
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than just Oh, no. It goes back I that book. Okay. Um, in order to understand these things,
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cuz I have to bet on what's going to happen. I'm a global macro investor. I study the last 500 years of history and
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and it happens over and over again in all cases. So, I could take the British Empire, I
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could take you through all the empires, the Dutch Empire before that, and all this, and it it it happens uh all the
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time. I watched your I watched your videos about this and it was truly fascinating how predictable this stuff
00:15:54
is and the work that you've done to uncover this trend throughout history. I mean, it's almost for me it was almost
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irrefutable watching the evidence in in I think it's like a 40-minute video on YouTube where you show how this played
00:16:04
out through empires. And it begs the question, you know, because when you live in the United States, when you're
00:16:10
when you're in the present time, you almost never assume that the empire you're in could fall. You just don't you
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don't see how it could happen. We're so strong. We're so great, you know, we're so that doing AI over here, have money over here, everything's good, the sun's
00:16:21
shining. It's inconceivable. Of course, people always think that the future would be a slightly modified
00:16:28
version of the present, and it's not. Okay. Watch over decades, but it's like
00:16:35
watching a person grow. Yeah. Okay. Yeah. You know, you watch your kid or you
00:16:41
watch a person at your age, any age, and that's what you see. Yeah. Okay. And you don't see the life
00:16:47
arc. Yeah. Okay. But the life arc is in irrefutable. But the U do you think it's conceivable
00:16:53
that in the next 50 to 100 years the US could no longer be the dominant power globally?
00:16:59
Yeah. Yeah. More than conceivable. More than conceivable.
00:17:07
What does what do you mean by more than conceivable? I mean that these evolutions always take
00:17:13
place and they take place in a certain way and that um if you look at the
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probabilities um and the paths and the symptoms there is a challenge the United States
00:17:31
is facing a number of those challenges and we're at a moment where Um it's a
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question of whether the system and the people
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could can get control of the situations and deal with it
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strongly and well in a way where they are not
00:18:01
fighting to the point of damaging each other and damaging
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managing the prospects for the future. But I mean, the United States is very
00:18:12
innovative. Got all these great innovative companies here. So surely Yeah. But you you can't make
00:18:18
generalizations about the United States. And you can't make generalizations, by the way, about the markets either.
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um what you see is um 1% a small percentage 1% of the
00:18:32
population if you're looking at the breakdown of incomes and also you're looking at the innovation the stock
00:18:39
markets which stocks are doing well who owns those companies and all of that
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about three million people in a country of uh 330 million people are really
00:18:51
unbelievably doing great and you could pick the neighborhoods they're in and what they're doing. And then there's the
00:18:57
top 10%, let's say, which is the people around them. And they're really, really doing great in that world. At the same
00:19:05
time, the bottom 60% 60% of Americans have below a sixth
00:19:11
grade reading level. Wow. And that population
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in terms of um the basics being productive,
00:19:25
you have to be productive and be prosperous. So what what you need to
00:19:31
have a su successful society is to have broadbased productivity and prosperity.
00:19:40
Okay? And that's a problem. Okay? So, which America are you looking
00:19:46
at? And are you watching the war that's happening between these?
00:19:51
It's a little bit complicated for me as a as a bit of an outsider because I see Trump saying he represents those people,
00:20:00
but obviously Trump is a from the billionaire class himself. So, I mean, is he is he a savior for inequality? Is
00:20:07
he correcting? I think I think he sees a lot of the problem and he uh I think he
00:20:13
sees the debt problem. I think he sees the internal conflict disorder problem
00:20:20
and I think he represents uh the red, let's call it the red states. I mean, you look at a map and
00:20:27
there's red and blue and you see where they are, okay? And he represents that and they're united behind him in terms
00:20:34
of doing some things. Okay? So he represents let's call it the red side
00:20:40
which is located where the maps shows red and then there are the blue and and
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he's um he views himself as somebody who needs to take charge and to do certain
00:20:53
things. Others in that population would say those who let's say are not getting
00:20:59
are having the food stamp program cut off or having other programs cut off
00:21:05
that they're dependent on would say uh wait a second that's not representing
00:21:10
me. And so we have gone that population has gone to significant number behind
00:21:18
him that are devotees. They're all in. Okay. At the same time
00:21:26
as we have the other side which will have their devotees if you know we're in
00:21:33
New York City. Okay. And the up upcoming mayoral uh election will be an example
00:21:40
of the two sides. Okay. And they will try to use the system but there's a
00:21:46
question will the system have enough support to work. Okay. But that's what
00:21:52
we have. Just just to close off on this point of the UK in particular, if if you were to try and fix it, what would you be aiming
00:21:59
at? I say this because we do have a millionaire exodus that's widely reported in the UK where I think this
00:22:04
year we're set to lose 16,000 roughly 16,000 millionaires. Um, when you look
00:22:09
at the big big countries like China, America, the UAE, the UK, we're losing more millionaires than anybody else. And
00:22:15
I was wondering if you think it's fixable and if you were in charge of the UK, what you might aim at first.
00:22:23
It's diff, you know, first of all, if you go back to the basic problem,
00:22:29
which is there's too much debt, there are deficits,
00:22:35
there's differences in education and opportunity levels
00:22:43
and so on. The most important thing that you can have
00:22:49
is a strong middle. Political middle. Political middle
00:22:55
to be analytically strong and also strong enough to get the people to do
00:23:02
what needs to be done even if they don't want to do it to get to be productive.
00:23:08
Now that's an easy thing to say. It's not an easy thing to do. But you do
00:23:14
need that strong middle and you do need to convey to people that you need to
00:23:21
have the strong middle to change productivity and you know and are you in it? Are are
00:23:28
you in it? Are you patriotic and in it and you know but you look at history how
00:23:34
did the United States come to be the United States? People will go to the
00:23:40
places that are better than them then stay in the places that worse for them.
00:23:46
This is fundamental right incentives. Okay. So you have to make the place
00:23:52
better. Okay. Now I would say also you can take pockets and they go into the pocket and
00:24:00
let it spread out. But you also have to have this equal education or you know you've got to strive for equal
00:24:07
opportunity. But anyway, it's a difficult question that I'm afraid I'm incapable of
00:24:14
um solving. It was unnerving to hear the tone of your voice drop when I asked it. You
00:24:20
seemed slightly um as if you you've kind of given up on the
00:24:25
UK a little bit. Your facial reaction? Well, I'm I'm just a I'm just a I'm a
00:24:32
practical guy. I'm a realistic guy. I made my money.
00:24:37
I'm in the business and it's my nature to try to be realistic
00:24:44
and to bet on how things will transpire. And that's not healthy. The situation in
00:24:50
the UK is not healthy. And the situation in the United States is very risky in
00:24:55
many ways. It's what we're describing. So, you know, and then if you look where
00:25:00
are people going then then you see the places that have the qualities we're
00:25:06
talking about. They're civil. They're creative.
00:25:12
The people aren't at war with each other. What happens next in history?
00:25:18
Well, usually there's a a big fight for control, political revolutions and things like
00:25:25
that. the system breaks down
00:25:31
because they don't trust the system.
00:25:36
So will the legal system resolve that? Will the parliamentary system resolve that
00:25:44
these disputes satisfactorily to the satisfaction of those people and
00:25:50
the other people who have different points of view and the sides won't believe it. And this goes back
00:25:59
this goes back to Rome. It goes back to Caesar, you know, the Senate. And you know this
00:26:07
goes back through history all the time, right? And in in the 30s, four major
00:26:14
democracies chose to be autocracies. Okay, that happened in Italy, Germany, Spain, and
00:26:21
Japan. What's autocracy for anyone that doesn't know the word? Well, it's it means a dictatorship
00:26:28
essentially of a limited number of people at the top who are autocratic,
00:26:35
which means that they are directing things rather than a democracy
00:26:42
in which um there's representatives of all different points of view that get
00:26:49
together and follow rules to make decisions. So the UK could become an autocracy as
00:26:56
could the US. I guess um you're going to see a lot of pressure
00:27:02
for that strong leader who will get control of things and make it work well
00:27:08
and will and you're likely to see two different views as to which side, you
00:27:14
know, the red and the blue sides, so to speak. You're likely to see that type of
00:27:21
clash. You said the US is playing a risky game itself. Is that from a de debt perspective or otherwise
00:27:27
from these things? Okay. From the debt, from the internal conflict, from the changing world order,
00:27:34
the geopolitical world conflict, you know, I don't know. We're playing with
00:27:40
nuclear weapons and, you know, in wars and different places and then of course
00:27:46
climate and then the technology war. How we're doing that. Yeah, I saw that image the other day of Putin
00:27:52
and um President Xi and China together walking together. If China does become
00:27:58
the dominant force in the world, the dominant power does is that a smooth
00:28:03
transition? First of all, I don't think either side is going to be the clearly
00:28:08
dominant power for for a very long time and and the the quickest way to have it
00:28:16
is some kind of a war and that's a dangerous thing and but maybe it evolves
00:28:23
hopefully the way the Soviet Union evolved that the the worry of mutually assured destruction
00:28:31
keeps everybody not having that kind of war and then what then then the systems
00:28:37
one system or another system wins but that's an evolutionary process and
00:28:43
you know I can't say and um do you think much about time frames
00:28:48
because when I was watching when I was going through the changing world order there seems to be somewhat consistent or
00:28:54
predictable time frames when these these transitions happen. Do you think about where we are? Well, they're long-term big cycles.
00:29:01
Yeah. Right. It's it's like a life cycle on average they are about a life cycle
00:29:06
about 80 years but it's not predetermined just like your life cycle is not predetermined like if you take
00:29:14
care of yourself and you you know I don't know smoke eat well exercise and
00:29:20
so on so forth then you will probably have a longer life cycle than if you
00:29:25
don't take care of yourself and it's um kind of like that you know and so you
00:29:31
see them in industry they evolve but you can see the symptoms. Okay, you can see the actions and the
00:29:38
symptoms which like taking a physical uh then gives you a sense of where they are
00:29:44
in their life cycles. We're 80 years from World War II. 80 years from World War II. Yeah.
00:29:50
And you're seeing the symptoms. Yeah. Symptoms are clear. They're all in that book. You can see the charts of all
00:29:56
the systems. Is it something to be worried about or concerned about if you're in the United States?
00:30:02
No I mean, yes. And then the question is how you as an
00:30:08
individual handle it. How do I as an individual handle it?
00:30:13
Well, first of all, I think I think you have to be aware of the situation and
00:30:19
the risks for me and my family though in terms of risks
00:30:24
and how I should um counteract those risks. Is it a case of me saving for a rainy day? Is it a
00:30:29
That's part of it. Yeah. Um there's a there's a saying in Hong Kong um a Chinese saying which is a
00:30:37
smart rabbit has three holes. And what that means is you can see is it the UK
00:30:44
or the US and and I can then move to the better place and get out of the place
00:30:51
that's a terrible place. So can I successfully be an immigrant or whatever
00:30:56
and change my location? throughout history that's been important. So the ability to go to good places and away
00:31:05
from bad places. Um so that's part of it. Um secondly,
00:31:11
building your financial strength is important which has to do with how you
00:31:18
earn, spend and save. That will determine the amount. And then what you
00:31:25
do with that amount is invest. And so how you invest
00:31:31
uh is also important. So if you have your financial ability
00:31:38
and you can make the move and then you have knowledge
00:31:43
you know about what's happening so that you can change things. Those are
00:31:48
the things you need. So on that first point about a smart rabbit having three holes,
00:31:54
is it therefore a better decision at this point in time to not to not buy a house? Because a lot
00:32:01
of people end up buying a house and anchors them to to a place and it means that they then have to pay into a mortgage. So a lot of lot of the
00:32:07
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
00:32:13
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 is
00:32:19
there's there's uh value to that. The ability to move capital matters. And
00:32:26
if you look at history, this has been an important consideration. Yes. So it matters. So if you're nailing yourself
00:32:32
down and that's your primary capital and it's nailed down there, then that's does
00:32:38
limit your flexibility. And on the point of earning, spending, and saving, wonder
00:32:43
what you you're a you're a a father, aren't you? Yeah. What what advice are you giving to your
00:32:49
children about earning money in the in the current world, where where they should set up their shop, the skills
00:32:54
that are most valuable to acquire, the technologies, the we talked about the US being a place to one of the better
00:33:00
places to build your career for all the reasons you described. Well, that's,
00:33:06
you know, that's kind of like the particular that you asked me for. That's below the level of the higher level.
00:33:13
Okay. The higher level is I have a principle. Make your work and your passion the same thing. And don't forget
00:33:19
about the money part. Okay? If you make your work and your
00:33:26
passion the same thing so that you're really enjoying your work, you'll have an enjoyable satisfactory life and
00:33:33
you'll probably be better at your career that um as a result probably advance and
00:33:40
so on. So you have a happier life and you will have a more probably a more successful life. But it is true that the
00:33:47
careers that you choose will have financial implications. Mhm. And if you say, "I want to be a poet or
00:33:55
something along those lines." You better consider the financial implications of
00:34:00
that. That doesn't mean that you have to go make a ton of money because I think that that's I think a lot of people fall
00:34:06
into that trap that they think the money is um like vast amounts of money is vast
00:34:13
amounts of success. And that's not true. In other words, is your work and your passion the same thing? So, I think that
00:34:20
what brings people happiness is meaningful work and meaningful relationships.
00:34:26
Okay? If you have meaningful work, you know, that you're into and your, you know, your passion and your work's the
00:34:32
same thing. And you have meaningful relationships, whether through that work or beyond, you're going to have probably
00:34:39
a great life. Okay? And so, you have to keep that in mind. And it doesn't have
00:34:44
much correlation past a certain level of money. Uh it doesn't have much correlation with
00:34:51
um that well-being with the amount of money you have. And if you see studies across societies and you'll see that
00:34:59
past that certain basic level, there's no correlation between the amount of money they have and how much happiness
00:35:05
they have or well-being. Okay? that the highest level of co correlation across
00:35:10
societies and studies of happiness and well-being is community. Do you have a
00:35:16
sense of community? Do you have those around you who are your community? You'll live longer that way. You'll have
00:35:22
a more joyous life and it'll be a better outcome. But anyway, so thinking about those things I think is important
00:35:30
based on your life cycle in this book principles your guided journey. create your own principles to get the work and
00:35:36
life you want. Do you think you have to play different games in different seasons of your life cycle as it relates
00:35:43
to generating wealth? And what I'm talking about here is really like risk profile um or what I should be
00:35:48
optimizing for. Should I be should I be trying to hang around with Ray Dalio or should I be focusing on the job that
00:35:54
pays me the most? First of all, the answer is yes.
00:35:59
And the second question you asked the answer is um that you should be around
00:36:07
the the people who are the best people to teach you to operate by the the
00:36:14
mentors and the learnings and so on. You should be around the best people and when I say best people I mean people of
00:36:20
good character and good capabilities. Okay. And uh so you should be around the
00:36:26
best not the job that pays you the most. And I could explain why that is, but and
00:36:33
yes, in terms of that arc, you will play it differently at different parts of
00:36:38
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
00:36:47
experiencing is the most important thing that you can do in the learning in the early part of your life cycle.
00:36:54
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,
00:37:00
that that's that's most important. And then what you're at the end of your life cycle, you're pretty much relieved from
00:37:07
all of that. You're not going to be working to earn, okay? You're going to
00:37:12
be free of all of that. You're going to have um and you have freedom of choices
00:37:18
and so on. And you're going to be thinking about transitioning. how do I transition well-being or how do I
00:37:24
transition my wealth or how do I transition and so on you know that's that's where you are still learning is a
00:37:31
joy but at the same time in terms of trying to accomplish it's not the same
00:37:37
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
00:37:43
cycle and what the most important strategic or wealth generating decisions
00:37:48
you made that you would encourage encourage everybody to consider if their nature is aligned to yours.
00:37:54
Okay. My nature was I hated school. I didn't like the whole thing of
00:38:02
remembering this and remembering this and then give it back to me and there were these uh you know history like
00:38:10
there's William the Conquer in 1066 and what did he do and you know like all of
00:38:15
that was what education represented. And when I was um 12, a kid, I earned money
00:38:23
with odd jobs like um I had a paper route and um I mowed lawns and I caddied
00:38:31
and I took my cadding money and when I was 12 I got everybody was talking about
00:38:37
the stock market. So I put some money in the stock market. I didn't know what I was doing, of course, but I um I picked
00:38:44
um 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
00:38:52
could buy more shares, so if it went up, I could make more money. Okay, that was
00:38:58
a stupid criteria, but it was a company that was about to go bankrupt. And
00:39:04
another company acquired it and it tripled in price. and I said, "I like
00:39:10
this game." [Music] So, I got I got hooked on the game. I'm
00:39:17
still hooked on the game, right? So, I liked it. Okay. That that affected me.
00:39:22
So, I barely got into uh CW Post College and then I went to uh Harvard Business
00:39:29
School and that opened my eyes to the world in in many ways because of who
00:39:35
were there and what it was like and all that, you know, the best and the brightest kind of thing. But I always
00:39:40
still traded markets because I always played the game. I could tell you
00:39:45
stories. You want a couple of quick stories? 100%. Okay. So, I'm clerking on the floor of
00:39:51
the New York Stock Exchange between graduating from college and in the
00:39:56
summer between graduating from college and going to uh Harvard Business School.
00:40:01
And that is 197 the summer of 1971. Mhm. And on August 15th, 1971,
00:40:11
Richard Nixon gets on the television and says
00:40:20
that, you know, the promise that that you were going to be able to take your paper money and go get gold, you can't
00:40:28
do that and we're not we're going to cut off that off. He didn't say it in exactly those words, but money then was
00:40:35
gold and what we think of as paper money, fiat money was claims on the
00:40:41
gold. So I walked on the floor of the New York Stock Exchange that summer and I thought the market was going to go
00:40:47
down a lot and the market went up a lot and I didn't understand why because I never went through a devaluation before.
00:40:54
And I studied history and I found that in March of 1933,
00:41:01
Roosevelt got on the radio and made the exact same announcement that you're not going to get your gold and they're going
00:41:07
to print the money. And when you print a lot of money, you have that. Okay. So, I learned that history of things that
00:41:16
never happened in my lifetime before were important things to understand. Okay. I went back then to Harvard
00:41:22
Business School two for two years and and two years later as a result of all
00:41:28
the printing of money and the oil shock because of all of that uh we had the in
00:41:36
1973 oil shock and now because of my background I'm head hired to be director
00:41:43
of commodities at a Wall Street brokerage firm. Okay.
00:41:48
Mhm. Which and then all sorts of things happened. Um turbulence and so on so
00:41:54
forth. That firm went broke. I went to another firm and I was uh rowdy. I
00:42:01
wasn't your typical good employee, you know, follow everything. And uh so I got
00:42:08
fired and that was in uh 1975
00:42:14
and then I but uh clients all liked me and for things and so they would pay me
00:42:20
for advice and I continued to trade the markets and that's when I formed Bridgewwater.
00:42:26
Okay. And what that was 1975. I just passed along Bridgewater 50 years
00:42:32
later. Yeah. Okay. So there's a journey there that
00:42:37
has failures and successes and learnings. You know, I have a principle.
00:42:43
Pain plus reflection equals progress. Okay? Your best learnings come from the
00:42:50
pain. It's a message. Pay attention. Learn how reality works and how to deal
00:42:56
with it differently so you have principles for re dealing with reality better. And I learned that process. And
00:43:02
from that process, my company Bridgewwater became the largest hedge fund in the world. Um, extremely
00:43:10
successful, managing how much? $150 billion. 1,500 people, $150
00:43:16
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.
00:43:24
Okay. I just wanted to play the game and to have meaningful work and meaningful
00:43:29
relationships. That was paramount. But it happened to be the game I played. If you're good at the game, you make a lot
00:43:34
of money. And now I'm at a stage in my life where I'm I want to pass things
00:43:40
along. I need to pass things along, right? So, hence the books, hence our
00:43:46
conversation and here we are. That's the life arc. But I learned a lot. And so that's the
00:43:53
journey. I think B2B marketeers keep making this mistake. They're chasing volume instead
00:44:00
of quality. And when you try to be seen by more people instead of the right people, all you're doing is making
00:44:05
noise. But that noise rarely shifts the needle. And it's often quite expensive. And I know as there was a time in my
00:44:11
career where I kept making this mistake that many of you will be making it, too. Eventually, I started posting ads on our
00:44:17
show sponsors platform, LinkedIn. And that's when things started to change. I put that change down to a few critical
00:44:23
things. One of them being that LinkedIn was then and still is today the platform where decision makers go to not only to
00:44:29
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
00:44:36
say yes. And you can target them by job title, industry, and company size. It's simply a sharper way to spend your
00:44:42
marketing budget. And if you haven't tried it, how about this? Give LinkedIn ads a try. and I'm going to give you a
00:44:48
$100 ad credit to get you started. If you visit linkedin.com/diary,
00:44:53
you can claim that right now. That's linkedin.com/diary. Just for context, people don't like
00:44:59
talking about money and I understand it, but you're a prolific philanthropist. Also, Google says that your net worth is
00:45:05
in the tens of billions of dollars. And I'm sure there's some people that have clicked on this conversation and aren't
00:45:10
aware of the scale of wealth you built up and the scale of Bridgewater Capital and how prolific and famous it is in the
00:45:16
investing world. In that 50-year life arc, one of the things you mentioned is pain. All of us will encounter pain. And
00:45:23
you said pain plus reflection. Reflection equals progress. How have you
00:45:29
leared to deal with pain? You've had a lot of pain in all facets of life because you've lived the life arc um and you continue to. How what's the best
00:45:36
principle for dealing with pain? First of all, um to calm yourself down
00:45:44
and to get centered. Meditation has had a big beneficial effect on my life. We
00:45:50
can get into meditation in a minute of how it has. But the ability to, you know, in a sense calm yourself down
00:45:59
and when the time is right to reflect on
00:46:04
what's happened both to understand how reality works. You know, you want to be
00:46:10
a hyper realist. I understand how reality works. Therefore, I need to do this under this set of circumstances,
00:46:17
which means developing principles. And so what I did when I would do that
00:46:24
anytime whenever I would think what what should I do whether painful or not I
00:46:30
would pause reflect on you know what should I do if that happened again and that's how I would
00:46:37
write down my principles and what I did was I wrote down a lot of principles
00:46:43
a lot of principles a lot of principles if this happens that happens and whatever and then so I wrote
00:46:48
these principles down and then I found that in investing
00:46:54
um if I can computerize those decision rules I could back test them
00:47:01
see how they would have worked and so on. So I built systems, decision-making systems. Um, computer would make
00:47:08
decisions. So it was AI before LLMs, but it was AI to have decision-making
00:47:15
criteria. So it would be like I I would make a computer chess game that would
00:47:22
play while I was playing my mental chess game, what moves we would make. And it's
00:47:29
completely automated and so on. But I'm what I'm trying to say is that reflecting on how does reality really
00:47:37
work and what do I do when this happens to
00:47:42
that happens is the development of principles and that has been invaluable
00:47:47
and it also makes me see things differently because a lot of people um
00:47:53
and if I didn't do this I would be seeing almost as uh a blizzard of things
00:47:59
coming at me instead I see everything as another one of
00:48:06
those. So let let's say for example it it's a species. So it's like seeing okay
00:48:14
that's 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
00:48:21
things coming at me. Pattern recognition of Yeah. But but let's say if you think of a it's a duck.
00:48:27
Okay. Okay. Oh okay. It's a duck. How do I deal with a duck? Or it's a lion.
00:48:33
Okay, how do I deal with a lion? Rather than just a lot of things coming at it. So this principle thinking and
00:48:41
seeing it that way had a big effect on the quality of my decision making and
00:48:47
and that helped. Two questions I had there is to become a principal thinker I need to do more
00:48:53
reflection, right? And then the other think about how does how does the
00:48:59
machine how does how does life how do these things work? So that's what I
00:49:05
mean. Okay. And to write that down. Uh yeah. Yeah. Write down your thoughts.
00:49:11
I find sometimes what I would do is I'd uh dictate them into my iPhone. Okay.
00:49:16
Okay. I'd say no. Okay. Ah this is how when you're making a decision. Why did
00:49:22
you make that decision? So, not just make a decision, but think
00:49:27
about the criteria you're using to make the decision also my emotions, my trauma, my
00:49:33
insecurities, my anxiety, right? And and you might say when reflecting on that, is that helpful? Is
00:49:39
that harmful? And what do I do about that? Like for example when what you're referring to is
00:49:47
yes the um that the motions and the things and all of those um we uh you
00:49:52
have to understand that that basically the brain's got two parts to it right it
00:49:58
has the logical part of your brain reasonable tries to
00:50:03
reason things through and then which is conscious and then it has the subconscious mind which is the
00:50:10
subliminal that is really driving you and so when you can reflect okay how are
00:50:20
my emotions entering into it what do I you know and so on and you can think and
00:50:26
you can align that that's very powerful and meditation by the way naturally does
00:50:32
that because what you do when you meditate and maybe a times come I should explain meditation okay how it works um
00:50:40
what you do is it's a process process by which you sit quietly and you repeat in
00:50:47
your mind what is called a mantra which is a sound that it's a word that has no
00:50:53
meaning. Let me say the most classic example of that would be okay. So you're
00:50:58
quietly there and you go with your breath you go you know [Music]
00:51:05
like that but you need to be taught but anyway I um and so when you're doing
00:51:10
that uh because your m is in your mind or your mantra is in your mind you're not
00:51:16
able to have other thoughts. You'll see yourself wavering between
00:51:24
doing that and staying on the mantra and then having thoughts. Um but what and
00:51:29
then you go back to your mantra. When you are uh in the mantra a a lot then it
00:51:35
disappears. The sound disappears and you go into your subconscious mind. That's what they call transcending.
00:51:42
Transcendental meditation is the type of meditation I do. And so you go there and
00:51:47
you're not in a conscious state and you're not in a subcon unconscious state. You're in a conscious state. So
00:51:53
it's subconscious state. It's not unconscious is you're sleeping.
00:51:58
Conscious is that you're awake like we are. You're in this. So it's a different state. Like if you hear that noise, you
00:52:04
would hear that noise. It would be big. Not when you're sleeping. But when you're in your subconscious state, then
00:52:12
it's relaxing. uh it's helpful and this process helps to um bring your conscious state and
00:52:22
your uncon subconscious state into alignment. In other words, you recognize both and
00:52:29
it calms you down. It it's like the ninja in the ninja movies, you know,
00:52:34
they're fighting but they it seems in slow motion. The camera shows them in slow motion and they're doing whatever
00:52:41
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
00:52:47
coming at you in that way. And so what you referred to is this um these things
00:52:55
that happen and how you deal with those is really important to the quality of your decision-making.
00:53:00
How influential was transcendental meditation in your success? Oh, enormously successful. Enormously
00:53:06
significant. Ve very very significant. In other words, that way of singing
00:53:11
seeing things and how often and and by the way, there's you know there's I I would say say there's a
00:53:18
serenity prayer. The serenity prayer is God give me the serenity to accept that
00:53:25
which I can't control and give me the power to control that
00:53:31
which I can and the wisdom to tell the difference.
00:53:36
Okay. And so to how you approach these things, we're talking about reflection.
00:53:42
You ask me reflection. Okay? If you can reflect in that quality way, then you
00:53:49
deal with anything. And I've I've dealt with uh the worst possible thing. Um I
00:53:56
lost a son. Okay? And I would have rather died. I would have rather lost
00:54:01
everything to lose my son. So it's the worst possible thing. and and then to see what it did you know the damage and
00:54:07
the harm from family terrible. Okay. Then to go through that with meditation
00:54:15
with reflection and so on uh was invaluable and people have their own
00:54:21
challenges but to be able to do it that way I I really urge your audience I urge
00:54:28
you to uh to learn that that's very helpful. How how did that tragedy change
00:54:34
your your perspective and your your principles in any way on life on on happiness on success on all these things
00:54:40
that you've written about? Well, it's again I you know I go above it and um you reflect on the life arc
00:54:51
and I realize at that higher level that that's what the life arc is like. you
00:55:00
you'll in in all my books there's this ar um arcing
00:55:06
this arcing here's a bigger version of it uh yeah there's this arcing okay I
00:55:13
don't know if you're camera sees that okay whatever it is and that's what life and evolution is like to me meaning you
00:55:20
make advances you will have setbacks
00:55:26
okay if you reflect Well, and you learn how reality works and how you will deal
00:55:33
with it, you will get past that and go on. And
00:55:40
that's just what it is. That's just the way life is. And if you do that well,
00:55:46
then that's your best possible life. Are you religious? Are you a religious person?
00:55:51
I'm not religious, but I'm spiritual. Okay. The Dalai Lama who I had the
00:55:56
pleasure of meeting told me u and I I agree with um that religions are typically
00:56:03
um a mix between superstitions
00:56:08
and spirituality. There's half of it is that element that nobody knows but there
00:56:16
is the way people should deal with each other. There is karma.
00:56:23
Okay. All religions there's the part of them that says do
00:56:31
unto others as you would have them do unto you or what goes around comes around and then you get to the
00:56:37
particulars. Okay. And it is true that if we work well together
00:56:45
that even little things I can do to help you can make a big difference in your
00:56:51
life and little things that you can do to help me make a big difference in our
00:56:56
lives. And so it's practical and it is also joyous.
00:57:01
Okay, that creates a relationship. And we talked earlier about how that meaningful relationship is like the
00:57:09
source of great happiness. But when you have a community and you do that, you have a better society. And almost all
00:57:17
religions will tell you that there'll be elements of those. And when I believe in spirituality, what I also mean is uh
00:57:24
we're all part of this greater hole.
00:57:30
Okay? We're all part of the greater hole. And if you could see yourself as part of the greater whole and love the
00:57:37
greater whole uh and whatever that is spirituality really okay and so I will
00:57:45
go through my life arc okay and I will die and I'm comfortable with that okay
00:57:53
in that okay it's all part of the greater whole you know na nature and
00:57:59
whatever it is that's true I can't tell you about other things but I do believe
00:58:04
in the things I just told you when it comes to living a successful life we've talked about having dreams
00:58:11
and understanding your nature and aspiring for things and then understanding reality which transcendental meditation is a great
00:58:16
mechanism and vehicle to do um and in your in your book about a successful life you talk about plus determination
00:58:24
plus determination hard work
00:58:29
if I want to be a successful man or woman, how important do you think
00:58:35
hard work is? Well, gives you power. It's very important, right? Some people some people, you know,
00:58:42
I'm not saying they want to choose it, but the ir the irony of things is
00:58:47
there are first order consequences and there are second order consequences. This is like a rule of life, okay? And
00:58:52
most of the time the first order consequences
00:58:58
whether they're likable or not has the opposite second quarter second
00:59:05
order consequences. What I mean by that is like eating or exercising. Okay, eat
00:59:13
the foods you like. Second order consequence is probably not going to be good. um you know I don't
00:59:21
want to exercise um second order consequences won't be as
00:59:26
good. Okay. Working hard which gives you strength. Where does strength come from?
00:59:32
I mean strength comes from working hard. So working hard will will give you
00:59:39
power. Power will make things easier and make things better. That's just the way it
00:59:46
is. and being open-minded while you do it. Something that was openminded to you.
00:59:51
Yeah. I say uh the importance of being open-minded and assertive at the same
00:59:57
time. Um I I I watch
01:00:03
people becoming so tied to their own opinions like this is
01:00:09
the greatest tragedy of mankind. The greatest transgen of mankind because
01:00:15
it so easily can be fixed is holding a strong opinion that is wrong
01:00:26
that you could have made right better
01:00:31
if you were open to learning more. If you would said, "I want to be stress tested. I want my thinking to be stress
01:00:37
tested. I want to make sure that I'm making the better decision and so I'll
01:00:42
be challenged. But a lot of people view that challenging like a fight.
01:00:49
It's not a fight. If somebody holds a different opinion, it should prompt a curiosity.
01:00:55
You know, I don't know. Am I wrong or is they wrong? There's a 50% chance. I don't know. Maybe I'm wrong. So, it
01:01:01
should prompt curiosity and in exchange to try to make sure that you're seeing
01:01:07
the whole picture and so on. But subliminal instincts are I'm going to stick with it and I'm going to have a
01:01:13
fight. That's a problem because there's too much on the line for so many people to
01:01:19
it's subliminal. It's it's it just goes back to the mind thinking that the
01:01:25
intellectual challenge is a fight and it's egotistical. You know, ego,
01:01:32
I must be right. As an as an investor and entrepreneur, that's obviously particularly important because you're constantly dealing with
01:01:39
your information and feedback, which you need to be flexible. That was one of the two things that changed my
01:01:46
uh my my my whole direction and made me successful. I I can explain it if you
01:01:52
want. Please. 19 79 and 80
01:01:59
I had calculated that American banks had lent more money to foreign countries
01:02:04
that they were going to be able to pay back and that we were going to have a debt crisis.
01:02:10
Very controversial point of view. In August of 1982,
01:02:16
Mexico defaulted on its debts and over the next decade, many other countries did and it caused bank problems.
01:02:24
However, at that time, I thought things were going to get bad and that was the exact bottom in the stock market, August
01:02:31
1982. So, I couldn't have been more wrong.
01:02:37
I lost money for me. I lost money for the clients. I lost money. I was so
01:02:42
broke that I had to borrow $4,000 from my dad to help to pay for family bills
01:02:48
because I was faced with the choice. What am I going to do? And and do I do I
01:02:53
go back to work on Wall Street, get a uh tie, get on the train, and go back that
01:02:59
which is again not in my nature or whatever. And and two things changed me. Okay, reflection.
01:03:07
First of all, um, I learned what we were just talking
01:03:12
about. I learned humility and fear of being wrong and open-mindedness.
01:03:19
So, I wanted the smartest people who could I could find to stress test my opinions because I'm always realized I
01:03:26
could be wrong. And then I learned how to diversify my bets so that I could
01:03:33
dramatically reduce my risk without reducing my returns. Okay, that was the
01:03:38
bottom. Okay, from that point all the way over that following those principles
01:03:45
took me to the biggest hedge fund in the world, the most successful and so on because I applied it to the markets,
01:03:50
applied it to what we did and so on. So that notion of reflection and then how
01:03:57
do you deal with what reality is like and then you know okay the learn learn
01:04:03
radical open-mindedness in other words and like there's a principle in the book you have to take in before you put out
01:04:10
or that um decision making is a two-step process first take in then decide. Okay.
01:04:18
So, yes, open-mindedness. You don't doesn't in any way minimize your ability to decide. So, you still
01:04:26
have the freedom to decide, but it's crazy not to be open-minded. You recognize that the biggest threat to
01:04:31
good decision-m is harmful emotions. And that two-step process is first learn and then make the decision. Which is funny
01:04:37
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.
01:04:44
I forgot to I forgot to take a minute and do the evidence gathering or the like information gathering process.
01:04:50
Yeah, just smart people who care about your decision say stress test me.
01:04:56
Why don't we do that? That ego and also instinct that that's a fight.
01:05:03
Is there any advice you would give me on becoming a better decision maker? So I have a fund, I have many businesses. Is
01:05:09
there any sort of practical simple foundations of becoming a better
01:05:14
decision maker that we haven't talked about? Get smart people to interrogate my thinking. Um, be open-minded.
01:05:22
I think we've talked about almost all of them. Um, I think then you have to then
01:05:28
know about how to leverage yourself. Okay. In other words, as you do more and
01:05:35
more, uh, how do you do more and more when your brain has a capacity limit, okay,
01:05:41
and there's only certain number of hours in the day or the week, okay, you have to know how to do that.
01:05:47
Is that focus or is that something? No, no, no. It's knowing how to do it through
01:05:52
others. Okay. It's knowing how to pick others
01:05:57
and orchestrate. Well, it's like uh running a symphony or whatever. Okay.
01:06:02
get the best players. Okay, when I say uh you know um good
01:06:08
character and good capabilities and orchestrate them well and then provide
01:06:14
that um that leverage like uh um when I was doing the most I had 30 direct
01:06:20
reports whatever the number is. So uh it the
01:06:26
process is how to get more out of a minute or a day, not how to work harder, okay? It's how
01:06:33
to leverage yourself. And you're going to leverage yourself by picking the right people who you can trust. They're
01:06:40
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
01:06:46
people what you can do is you can deal with them and then you can say like I I
01:06:52
would deal with them on this 30 reports. I'd have maybe um an hour meeting with
01:06:58
them once every two weeks and and they go off and do things. And when you do
01:07:04
that you can even find people who are much better at things than you would be if you did them. Because if you have
01:07:10
these different things, okay, you better because otherwise you don't have the
01:07:16
capacity. You have these two key challenges to to overcome as an entrepreneur, which is
01:07:22
find these great capable people that have great character and then like bind them with the right culture to make sure that they do the best work,
01:07:28
right? And and in other words, it's meaningful work and meaningful relationships
01:07:35
through radical truthfulness and radical transparency. Radical truthfulness and transparency.
01:07:41
Okay. First, if you can have um meaningful work and meaningful
01:07:49
relationships, the people are on the mission with you.
01:07:54
Wow, that's fantastic. But
01:07:59
you you better be truthful and transparent. That'll show that you're honest and you better because you have
01:08:05
to get a truth including what people are bad at and how to deal with all those
01:08:11
things and and most people hide them. They don't bring them out into the open.
01:08:18
Okay, they everybody's worried about hurting each other's feelings or you know uh that and then so they're not
01:08:24
honest with each other and and they're that's the barrier you we talked about the barrier of disagreement there's it's
01:08:31
like that okay um you know uh I don't know are you good at that or you're
01:08:36
striking out if you're striking out and what is it how do we deal with it you better talk about that clearly because
01:08:43
you need to have an a team of players you know you have to work yourself so your team is an A team of players who
01:08:49
are tight. How did you do that at Bridgewater? How did you make people honest? Oh, well uh f first of all um I had a
01:08:56
policy talk behind another person's back um critically. That happens three times,
01:09:04
you're out. And then I would have radical transparency so everybody could
01:09:09
see everything. So you could see why I'm making decisions and I would reflect.
01:09:16
But the main thing is you know you know if it's happening or not. Okay. And I
01:09:23
made that comfortable because that's ordinarily uncomfortable. We talked about the fact that there's an
01:09:29
intellectual you and there's an emotional subliminal you. Okay. I made them understand like if I had a team a
01:09:37
football team and so on that this is going to be better for the team. is going to be
01:09:42
better for you and you'll have your evolution because what do you want to have dishonesty? Do you want people to
01:09:49
think one thing about you and really say something different?
01:09:54
How is that going to work? So there's an intellectual okay we believe it and then also by
01:10:01
having the meaningful relationships. I mean I'm not I don't force them. I
01:10:06
create a culture of meaningful relationships so that they have known each other for a long time. They go go
01:10:13
to each other's parties or they go to each other's
01:10:18
there are funerals. There are baby showers. There are these things. Not
01:10:23
that anybody's f I created uh clubs. I said, "Any club that you want to create
01:10:30
that has more than uh 20 people um whatever it is up to $500 per half." So,
01:10:39
so I don't care what it is. If it's play softball or play chess or whatever it is
01:10:46
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.
01:10:52
I'll pay for half up to that up to $500. So I to nobody has obligations to or
01:10:59
something but if I have that kind of meaningful relationships so you can talk
01:11:05
honestly with each other uh I found that very helpful and you've built a famously built an
01:11:11
idea meritocracy which in my understanding means where the best idea
01:11:17
ends up winning in the company versus just your idea because you're the most powerful person in the business right I mean I want what do I want I
01:11:24
want the best idea to win This sounds simple but but again it's it's not how businesses operate. One of the
01:11:29
fascinations I've always had is that when businesses get bigger and they have more intellectual horsepower by I mean
01:11:36
if you just added up how many brains they had they sometimes get less innovative and it it feels like the the
01:11:43
CEO well because they become more more bureaucratic and more fragmented.
01:11:48
Yeah. Okay. There's um I found it to be true and it's wellestablished fact that if
01:11:54
you get a group of people past a certain size which is 75 to 100 people
01:12:02
um they don't know each other. Okay, they they they start to become different
01:12:07
and then you lose those relationships. You lose a lot and so on. I found it
01:12:13
because uh um at the holiday season every year, what I would do is I would
01:12:19
write everybody notes, long notes in their cards and I
01:12:25
would pick an individualized holiday gift for them. And when it got to be to 67 people, I remember the year, it broke
01:12:33
my back. I mean, I I just couldn't do it. Okay. And I realized that at that
01:12:39
point I was going into another frame. Okay. And so
01:12:44
it's a organizational reality that you can keep that group and then what you have to do is then you have different
01:12:51
those different areas and you have to create cohesiveness between those different and cohesiveness common
01:12:59
mission and how do you do that between that. So, like for example, when we would have our holiday party where it
01:13:04
used to be everybody would be, you know, sort of go in and you have a holiday party and everybody together, what I
01:13:11
found out is we had a big arena that we would uh go to and I'd have both. I'd
01:13:17
have okay um that department is in that area and whatever and then they come out and they all mingle together and so on.
01:13:24
So there's an organizational thing that you've got to realize in terms of culture and and management of
01:13:31
that. It's like villages in a city I guess like yeah you basically keep build the villages and then good example city. Interesting. Okay.
01:13:39
Yeah. Our media company's at that exact point now. It's at it's at that 90 90
01:13:44
odd people. Okay. There you are. So when you said 75 to 100 I was like ah interesting. Yeah. I was thinking about all the
01:13:50
things I should be doing now to counteract some of those adverse effects of the culture splintering or
01:13:55
relationships breaking down. But I guess you've described it there. Uh
01:14:00
interesting. And I have to say one of the things I found to be most I'm 33 years old. I just turned 33 last week.
01:14:06
It's crazy how how often people say that hiring is the most important thing. Yet when you look
01:14:13
at how what entrepreneurs are spending their time on, it's usually like the product, the marketing, etc. and it's
01:14:18
maybe like one or two hours in some cases if they're lucky on finding truly exceptional people. They often just
01:14:24
outsource it to someone else, the recruitment team. When you think back through your career, how important was
01:14:29
it to find truly exceptional people? Of course. Well, I systemized it first
01:14:35
of all. Um I think that anything I do or one does can be systemized. So I would
01:14:43
think what are the personalities, what are the backgrounds of the people that
01:14:49
I'm hiring, what are the choices, how do I specify it? And I've and I got it by
01:14:54
also maintaining a lot of data with people. There's um there's a TED talk I
01:15:00
did that uh explains how like data uh everybody's going around and they're
01:15:06
operating in a certain way. So I know what people are like. If you know what people are like, you know what you can
01:15:12
expect of them. And then I would then say uh in a very data way, those people
01:15:18
who are successful in these jobs have the following attributes
01:15:25
that would create a job specifications for that type of job. So I I knew that
01:15:33
in that type of job there would be that type of person I'm looking for. Okay. what works they work okay data and
01:15:42
then I would find that would be my job spec and and so we had the systems and
01:15:48
then we had some people who are responsible for doing that because you're right it takes time how can I
01:15:55
interview all those people and so on but who can you trust and you're operating that way and then evaluation process
01:16:02
doesn't stop when you hire them okay the valuation process continues from that
01:16:10
moment and you still learn more about what they're like and you do that same process and still think would I still
01:16:16
have hired them and and if I wouldn't have hired them you know in the first
01:16:21
place then they shouldn't be there and so I have a process and people people in
01:16:27
process do people change after a certain point so if you've hired someone in six months and 12 months and they haven't changed
01:16:32
is it worth giving them another year is it worth a performance review I found out that
01:16:38
for me the big question mostly there were two big questions but um the big
01:16:43
question is how do you adapt to my culture
01:16:49
and that would take about 18 months to find out like can you speak honestly
01:16:54
about what can we have thoughtful disagreement do you like this evolutionary process where you're
01:17:00
challenged and all of this kind of thing that culture that' take about 18 months
01:17:05
and then roughly speaking then learning about the people their strengths and
01:17:11
weaknesses would take 18 months two two years maybe something along those lines and so then
01:17:20
you know you could pretty much decide but always being open every day by day
01:17:26
so nobody's surprised that you're always talking about things you know how's it going
01:17:32
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01:19:13
code diary. AI is um a bit of an alien that seems to have entered the room um
01:19:18
and has is going to change more almost every every industry. Great.
01:19:24
Yeah. I can't tell if you're being sarcastic. No. Truly, if you are um working with
01:19:30
it, controlling it, if it's a good partner to be able to get a lot of
01:19:36
leverage, it's truly fantastic. As I said in almost everything I did, we had
01:19:43
the criteria, we had the systemized. Would you do that? Would you not do that? How do you know how does reality
01:19:49
work? What are the principles? And and so it's a fantastic leveraging like I
01:19:55
described. You know, I would make the decision-making model like the computer chess game that would make it. Well, now
01:20:02
it's better than uh ever those those resources. So it leverages you
01:20:07
enormously. What about having a strong middle? We talked about having the strong sort of economic political middle.
01:20:12
Political middle. Yeah. Yeah. Is it going to drive inequality? Yes. It's going that's like all good
01:20:18
like all things. going to be um it has good things and bad things and we were
01:20:24
talking let's say first about managing and doing that I think in managing and
01:20:30
knowing what people are like and how they're all it's going to be very valuable
01:20:35
mostly very valuable in terms of changing um there'll be uh a limited
01:20:42
number of winners and a bunch of losers and um I think it's going to create much
01:20:48
greater polarity which as we're seeing um through the system the ways that we
01:20:55
talked about you know that top 1 to 10%
01:21:00
benefiting a lot and that you know so that will be a dividing
01:21:05
uh force I think it's got to got to pose the question with robotics accelerating at the speed of of light with optimist and Tesla and
01:21:12
all the things they're doing and all these other companies humanoid robots and then with artificial intelligence
01:21:17
having trillions of dollars plowed into it and accelerating. We're in this crazy boom at the moment. With these two
01:21:23
things combining, you're going to be able to have a humanoid robot who that can navigate human spaces, but is also
01:21:28
smarter than I am. Lawyers, accountants, uh lots of people in the medical
01:21:35
profession. Why would you why would one need them if we had a humanoid robot
01:21:41
that is smarter than all of us and has a PhD and everything? Well, we will not need a lot of those jobs for the reasons
01:21:48
that you're saying. Okay. And then the question is what our society does
01:21:56
and what do you think we do in such a world? I think we fight over about what we do
01:22:02
unfortunately. Um but as I say I I don't think we have
01:22:08
escaped a world where most people to have a healthy society most people have
01:22:15
to be productive and prosperous. I don't I I think people
01:22:21
need to be now certainly there and there certainly needs to be a redistribution
01:22:28
policy. I don't think that's just a redistribution of money policy because
01:22:35
uselessness and money may not be a great combination.
01:22:40
So I think that you have that has to be figured out and the question is whether
01:22:46
we're too fragmented to figure that out and agree on it and I'm worried about
01:22:51
that. Interesting times. Is there any historical precedence for this in your
01:22:57
view? Someone that knows history. Is there any historical precedence for something like AI and robotics converging? Well, um
01:23:05
through um evolution,
01:23:11
we have gone from a period of time which was called the dark ages or the
01:23:16
agricultural age in which um basically
01:23:21
there was land. it's agricultural and so on and people were treated they were
01:23:27
essentially like oxen most people and then there were the landowners who were the nobles and then there were the
01:23:33
royalty who uh were the families that control most things and so on and then
01:23:39
in history with the uh invention of the printing press there became more
01:23:46
knowledge um uh more intelligence and we see an
01:23:52
evolution in which um you start to see new ages emerge and thinking emerge and
01:23:59
power change and I won't take you through the whole history but you start to see that individuals can be clever
01:24:07
enough to earn money that so you begin the age of exploration and the
01:24:14
industrial revolutions in which machines replaced people and it's almost like
01:24:21
they first replaced them physically that um in other words they didn't have they
01:24:26
were not like oxen doing the thing so you get a tractor or something and and
01:24:31
it's almost like from the body up in terms of the mind and so you've seen
01:24:38
that evolution through time and the rise of intelligence in its various forms go
01:24:44
through this arc of rising in intelligence and now you see that
01:24:51
intelligence matters more than anything. Okay? It matters more than money. It matters more
01:24:57
than anything because intelligence will attract people among those with money to
01:25:02
invest in them in the development of that. And so we have seen this arc
01:25:08
through history develop in that way, right? And we've seen people replaced.
01:25:13
Now the question is as we get higher and higher in thinking, okay, whether we've
01:25:20
run out of capacity to shift or whether we're just going to be totally replaced.
01:25:25
Our muscles have been totally replaced, but okay, as this is happening, our best thinking may be totally replaced and
01:25:33
we're going to have to deal with that question. Are you hopeful?
01:25:40
I'm excited. I'm
01:25:45
I think it all comes down to human nature. Okay. I'm excited in that.
01:25:52
Fast forward, make the most of it, jump on it. Woo! You know, I'm excited. I've
01:26:01
also watched uh the evolution of species.
01:26:06
Almost all species have come and gone for certain reasons and they uh one of
01:26:12
the reasons that they come have come and gone is because almost their strengths
01:26:17
are not in all respects great strengths. you can use these things, intelligence
01:26:24
to your detriment. And I believe that um the things that
01:26:31
these technologies and so on bring us while very important, it extends life
01:26:36
expectancy and all of that is not import as important as human
01:26:43
nature. And so if you were to go back in time and we're at different societies, do you
01:26:49
have happier societies? Is the well-being greater? Okay. So you can go 50 years ago and you
01:26:57
might say the well-being is greater 50 years ago. Not in all ways, not in in
01:27:03
many ways the technologies and the consequences of those are much better, but you may have had a better life. And
01:27:09
it's human nature of how people are going to deal with each other. So I
01:27:14
think the real question is can people rise above this and and which it goes back to the
01:27:22
spirituality question. Can people then rise above it so that they think of the
01:27:29
collective good and they think of you know collectively how do we make the
01:27:34
best and also karma you know in other words um the realization that if I help
01:27:41
you in ways that can be so simple for me to help you make such a big difference in your life and you do the same and we
01:27:48
have win-win relationships it'll be good but if we don't do that And I worry
01:27:54
about human nature and I worry about this process, especially when you've got geopolitical
01:27:59
tensions. And it's because of human nature. I've had a lot of conversations on the
01:28:04
podcast about AI and I just can't seem to get to my own solid conclusion about this because when I look at human
01:28:10
nature, as you say, I see greed, I see power, hunger, status. Yeah. Some problems you just just accept
01:28:17
the fact that you may not be able to be confident about a prediction in the future. So, it'll always be a question
01:28:23
and just get on with the fact of using it for yourself in the best way that works for you. That's what I'm doing. We have a closing
01:28:29
tradition on this podcast where the last leaves a question for the next not knowing who they're leaving it for. You know this person um because I've seen
01:28:36
you with them. Um the question they left for you is what is a book or books that
01:28:42
you've recommended or gifted more than others and why? can't say your own but
01:28:48
right um there are three books there's a book on evolution written by
01:28:56
Richard Dawkins uh river from Eden I think it's called then a book by
01:29:05
um Will and Ariel Durant which are the maybe the greatest historians
01:29:12
in time and it's called lessons from history it's a very short book. I think
01:29:17
it's 104 pages. They wrote massive amounts about 5,000 years of history and
01:29:24
so on. And they sort of condense their lessons, lessons from history.
01:29:30
And then um Joseph Campbell's The Hero's Journey.
01:29:37
Is it the the hero with a thousand faces? Yes, that's it. Hero with a thousand faces.
01:29:42
And why Dawkins book? Why did you say that one? Oh, he understands evolution. Everything is evolving. Okay. All
01:29:50
species. Man is one of 10,000 species. I mean, and they're and they're all
01:29:56
structured similarly. There's a structure. They they you know, like um two eyes, a brain that has a structure
01:30:04
to it. Um that and the same parts of the brain. There's the cereum, the cerebellum, the prefrontal cortex.
01:30:10
there's this structure that makes you think differently and and so on. There's evolution. There's all evolution. So,
01:30:17
it's not just limited to um human evolution or what humans are like. It's
01:30:23
the force of evolution. Man is only um mankind's only about 200,000 years old.
01:30:30
That's in history that's short. Okay. And and the species and all
01:30:35
species evolve. Okay. And it's very interesting. So that's And you know
01:30:40
that's what his books are about and you know I think they're very good and Joseph Campbell's the hero's journey
01:30:45
the hero with it's it's about human nature and and the evolution of life and
01:30:51
the life journey that we're talking about. What I find so interesting Ray is how you draw on principles from other
01:30:57
domains whether it's from nature or biology as you were talking about there to tie into your work in business and
01:31:04
investing and everything else and life and happiness. And it really says something to me about
01:31:11
being more eclectic and be broadly curious in order to be successful in my
01:31:16
more narrative. Yeah. I just see I I don't Is that to me maybe too much of a
01:31:22
specialist kind of mentality but the world is being interrelated to these things if you want to understand how
01:31:29
reality works. Um you can't say I'm going to be just a specialist.
01:31:35
I mean these are all affected by each other. Thank you so much for write writing
01:31:41
these books. They are iconic and uh the YouTube videos that explain these these
01:31:47
books are iconic. I don't know who you have on your team that makes the animations and pulls it all together.
01:31:52
But not only is the content so important because they are principles, so they're enduring through time, but they're so
01:31:59
unbelievably accessible to all people of all ages. And if if you if people haven't read this book, I'd be shocked.
01:32:04
But um all of these books are fantastic. The this book, Principles by Ray Dalia, which I'm going to link all of them
01:32:10
below for anyone that wants to read them. I suggest you read them all, um will be formative in your life, even if you're not interested in business or
01:32:16
investing because as as it says on the book, they're principles and the the economy affects us all in ways that we
01:32:21
might not understand. We're all trying to be successful or happy in our own right. And that that's interwoven into all of these books. So, thank you. I
01:32:27
hope you write more books. Well, and thank you because yeah, I'm at a stage in my life, this is a symbiotic
01:32:32
relationship otherwise we wouldn't be here. Okay. And my um my benefit is that
01:32:38
I want to pass along these things and we're doing it together. And I have found and it's joyous to me to know that
01:32:45
these things have made a big difference in people's lives. People come up to me and they say, "Thank you for the
01:32:50
difference you've made." And you know, at this stage in my life, that's what I want to do. I think that's an understatement. I think it's had a profound impact. In
01:32:56
fact, every person I know, all of my best friends have taken something from your work which has had a profound
01:33:01
impact on their decision-m which has led them to be happier in some way. And when I told my friends that I was interviewing you, I'm interviewing 16
01:33:08
people while I'm in New York over the over the next month. When I told my friends, my best friends in the world, that I'm interviewing you, all of them
01:33:15
were telling me to pass on a message of thanks because there's something in one of these books that's helped them. And
01:33:20
they're all young people in that first season of their life. And there's there's something in all of these books that's um pushed them closer to their
01:33:26
success and their happiness. So, thank you for on behalf of me because you've had a profound impact on me. But thank you. Thank you for giving me that joy.
01:33:33
You know that. Thank you. I really really mean that. Thank you so much, Ray. [Music]
