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Ray Dalio Questions Conventional Career Wisdom

This article is more than 5 years old.

“Everybody is some kind of prisoner of their own making. Some, unfortunately by the state, but the rest have limited themselves because they have drawn their own imaginary boundaries.”
― Sadhguru Jaggi Vasudev

If you’re in your 20s, chances are good you’re anxious about quickly sorting your career out. If you’re any older, that idea is probably laughable. 

The evolution of the job market has made it increasingly possible for job-seekers to choose and re-choose a career at any age. It's common to see people starting anew in their 30s, 40s, 50s and beyond. I recently asked a successful 49-year-old executive how he viewed his career. Was he at the beginning or the end? "I feel like I'm just starting out," he said. I also spoke with a successful 70-year-old, who has had a successful career comprised of four legs in different fields. He assured me, "Every new career keeps getting better." 

Ray Dalio

Not everyone has the risk tolerance to take a chance on an uncertain opportunity or something they’ve always wanted, but for those who do, they often realize how disproportionate the perceived risk can be. It's the limitation we place on ourselves―oft-imaginary―that is the most confining. 

Ray Dalio, one of the most successful investors and hedge fund managers (and the richest person in Connecticut as of 2018), is a good example of someone who broke out of that mindset. In his book, Principles: Life and Work (Simon & Schuster, 2017), he outlines both his personal and business philosophy. The "life" portion of the book is summarized in a short, eight-episode series covering the swings in Dalio's journey and the steps he took in his sometimes-unsettling career journey to get to where he is today.

Restarting your career can be rewarding, but oftentimes a difficult and lonely experience, too. Even in Dalio’s wildly successful career, there were periods of struggle, periods during which he became resolved to follow what felt authentic despite facing uncertainty. Dalio’s framework can be useful (and reassuring), especially for anyone who has undergone a similar downswing.

1. Call To Adventure: “At the beginning, I needed to escape the conventions that surrounded me which meant I needed to think for myself. Unless you want to have a life that is directed by others, you need to decide for yourself what to do. And you need to have the courage to do it.”

2. Embrace Reality And Deal With It: “I came to view problems as puzzles that would reward me if I could solve them.”

3. Adopt A (Five-Step) Process: “The things we are striving for are just the bait. Struggling to get them [is what] forces us to evolve. Dalio excelled at execution and follow-through―arguably the hardest step in bringing an idea to lifebreaking it into five substeps.

    • Goals: Know your goals and run after them.
    • Problems: Encounter the problems that stand in the way of getting to your goals.
    • Diagnosis: Diagnose problems to get at their root causes. Don’t jump to solutions.
    • Design: Design a plan to eliminate the problems.
    • Do It: Execute those designs. Pushing yourself to do what’s necessary to reach your goal.

4. Learn From "The Abyss": That didn't mean he didn't encounter challenges. “Something terrible happened to me in 1982 when I bet everything on a depression that never came….I was so broke….I wondered whether I should give up my dream of working for myself and play it safe by working for someone else….Though I knew that for me, taking less risk would mean having a less great life.” Dalio embraced the riskier path.

5. Recognize Everything Is A Machine: He persevered, studying history and looking for patterns to provide more clarity in his own life. “Life often feels so difficult and complicated, it’s too much to take in all at once….So I thought a lot about how things work. Which helped to put me and my own circumstances in perspective….While most people expect the future to be a modified version of the present, it is usually very different. That’s because people are biased by recent history and overlook events that haven’t happened in a long time.”

6. Account For Weaknesses: He also recognized he had to account for shortcomings. Your two biggest barriers, according to Dalio, are ego and blind spots. The problem is we “fail to account for our weaknesses.”

7. Be Radically Open-Minded: To mitigate those weaknesses, Dalio surrounded himself with people who had different points of views, people who were good at the things which were his weaknesses.

8. Struggle Well: “Being successful led me to meet extraordinary successful people and see how they think. I’ve discovered that their journeys were similar to mine. You might not know it but they all struggle. And they all have weaknesses that they all get around by working with people who see risks and opportunities that they would miss.”

Risks And Opportunities

Changing a career is never easy. But the driving force is either the push of a dreadfully boring life or the allure of a much more exciting one. Dalio wanted the latter. “To me the choice was clear. But that doesn't mean that the path forward was without challenges.”

In theory, we know a career path is never straightforward. But in practice, when you're in the midst of making a directional switch, it can feel like you mistakenly entered a blizzard wearing beachwear. Each part of the process can be blinding and feel unsafe: the decision to switch careers or the limbo period where you aren't quite sure if you're going to even succeed. “You might think….that there’s no way to go forward but it will pass. I assure that there is always the best path forward and you probably just don’t see it yet.”

If you feel stuck, don’t panic. Anytime you encounter risk, your survival instinct might be loudly ringing in your ear. It's tempting to heed that call. “We progress forward until we encounter setbacks. Whether or not we get out of them and continue forward or spiral downward depends on whether or not we’re willing to face the failure objectively and make the right decisions to turn the loop upward again.” 

Handling risk is not the hardest part. It's deciding which opportunities are worth it.


Follow Stephanie Denning on Twitter: @stephdenning

And Also Read:

Finding Success In Failure: Lessons From Ray Dalio

What I Learned From The Financial Crisis Of 2008

Obama, On How To Pursue Our Purpose