For life long success, there are 5 steps you need to perform well. Set goals that are outside your reach. Don’t settle for what you know you can accomplish. Push yourself to new heights. Identify the problems you run into. Because the goal is outside your reach, you will inevitably run into problems. Don’t sweep them under the rug, but embrace them. They are the most valuable lessons you will learn.
Pain is the best teacher. By being uncomfortable and failing, you are given opportunities to grow. We don’t see these situation as opportunities because we only evaluate the first level consequences. Like working out, the first level consequence is the pain and struggle you feel while working out, but if you look a little further down the line there are many benefits. You will feel better, live longer, and look better.
Before you can develop a good set of principles you need to come face to face with reality. Not the reality you wish was here, but the harsh reality that you are living in. See your flaws and failures for what they really are. Be brutally honest with yourself. Then you can be radically honest with those around you. If you are honest with them, they will be honest with you.
The economy is built from simple transactions. You take assets or credit and exchange it for goods, services, or financial assets. That’s it. This process is repeated countless times in countless scenarios to build up the overall economy. You gain true clarity when you see a complex system as a combination of it’s simple parts. This type of understanding applies to many things in life. By reducing your problems to their simpler parts, you gain the ability to tackle even the most challenging task.
Ray Dalio turned his everyday decisions into systems. He started by compiling the reasons for each choice. Then he aligned the reasoning with the category it applies to. Because there are fever types of decisions than there are decisions to make, he could streamline decision making. Finally, he leveraged the power of computers. Algorithms don’t have biases, they don’t get emotionally attached, you can back test them, you can collaborated on them, and you can easily change them.