Black and white portrait of Ray Dalio: Narrator and Creator of Life Principles

Principles are ways of successfully dealing with reality to get what you want out of life.

Ray Dalio, one of the world’s most successful investors and entrepreneurs, cites principles as his key to success.

Work Principle

Be cautious about allowing people to step back to another role after failing.

Note I said "be cautious." I didn't say never, because it depends on the circumstances. On the one hand, you want people to stretch themselves and experiment with new jobs. You don't want to get rid of a great person just because he or she tried something new and failed. But on the other hand, if you look at most people in this situation, by and large you'll regret allowing them to step back.

There are three reasons for this: 1) You're giving up a seat for someone else who might be able to advance, and people who can advance are better to have than people who can't; 2) The person stepping back could continue to want to do what they aren't capable of doing, so there's a real risk of them job slipping into work they're not a fit for; 3) The person may experience a sense of confinement and resentment being back in a job that they probably can't advance beyond. Keeping them is generally viewed as the preferable short-run decision but in the long run it's probably the wrong thing to do. This is a hard decision. You need to understand deeply what the person in this situation is like and weigh the costs carefully before deciding.

Work Principle

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