Ray Dalio's super-effective roadmap 

Ray Dalio's $22 billion net worth ranks him 36th globally. From 1975 to 2011, he built the world's most successful hedge fund, never losing more than 4% from 1991 to 2020. (and only doing so during 3 calendar years). 

Dalio describes a 5-step process in his best-selling book Principles. It's the playbook he's used to build his hedge fund, beat the markets, and face personal challenges. 

This 5-step system is so valuable and well-explained that I didn't edit or change anything; I only added my own insights in the parts I found most relevant and/or relatable as a young entrepreneur. The system's overview: 

1. Have clear goals 

2. Identify and don’t tolerate problems 

3. Diagnose problems to get at their root causes 

4. Design plans that will get you around those problems 

5. Do what is necessary to push through the plans to get results 

If you follow these 5 steps in a virtuous loop, you'll almost always see results. Repeat the process for each goal you have. 

1. Have clear goals 

a) Prioritize: You can have almost anything, but not everything. 

I started and never launched dozens of projects for 10 years because I was scattered. I opened a t-shirt store, traded algorithms, sold art on Instagram, painted skateboards, and tinkered with electronics. I decided to try blogging for 6 months to see where it took me. Still going after 3 years. 

b) Don’t confuse goals with desires. 

A goal inspires you to act. Unreasonable desires prevent you from achieving your goals. 

c) Reconcile your goals and desires to decide what you want. 

d) Don't confuse success with its trappings. 

e) Never dismiss a goal as unattainable. 

Always one path is best. Your perception of what's possible depends on what you know now. I never thought I'd make money writing online so quickly, and now I see a whole new horizon of business opportunities I didn't know about before. 

f) Expectations create abilities. 

Don't limit your abilities. More you strive, the more you'll achieve. 

g) Flexibility and self-accountability can almost guarantee success. 

Flexible people accept what reality or others teach them. Self-accountability is the ability to recognize your mistakes and be more creative, flexible, and determined. 

h) Handling setbacks well is as important as moving forward. 

Learn when to minimize losses and when to let go and move on. 

2. Don't ignore problems 

a) See painful problems as improvement opportunities. 

Every problem, painful situation, and challenge is an opportunity. Read The Art of Happiness for more. 

b) Don't avoid problems because of harsh realities. 

Recognizing your weaknesses isn't the same as giving in. It's the first step in overcoming them. 

c) Specify your issues. 

There is no "one-size-fits-all" solution. 

d) Don’t mistake a cause of a problem with the real problem. 

"I can't sleep" is a cause, not a problem. "I'm underperforming" could be a problem. 

e) Separate big from small problems. 

You have limited time and energy, so focus on the biggest problems. 

f) Don't ignore a problem. 

Identifying a problem and tolerating it is like not identifying it. 

3. Identify problems' root causes 

a) Decide "what to do" after assessing "what is." 

"A good diagnosis takes 15 to 60 minutes, depending on its accuracy and complexity. [...] Like principles, root causes recur in different situations. 

b) Separate proximate and root causes. 

"You can only solve problems by removing their root causes, and to do that, you must distinguish symptoms from disease." 

c) Knowing someone's (or your own) personality can help you predict their behavior. 

4. Design plans that will get you around the problems 

a) Retrace your steps. 

Analyze your past to determine your future. 

b) Consider your problem a machine's output. 

Consider how to improve your machine. It's a game then. 

c) There are many ways to reach your goals. 

Find a solution. 

d) Visualize who will do what in your plan like a movie script. 

Consider your movie's actors and script's turning points, then act accordingly. The game continues. 

e) Document your plan so others can judge your progress. 

Accountability boosts success. 

f) Know that a good plan doesn't take much time. 

The execution is usually the hardest part, but most people either don't have a plan or keep changing it. Don't drive while building the car. Build it first, because it'll be bumpy. 

5. Do what is necessary to push through the plans to get results 

a) Great planners without execution fail. 

Life is won with more than just planning. Similarly, practice without talent beats talent without practice. 

b) Work ethic is undervalued. 

Hyper-productivity is praised in corporate America, even if it leads nowhere. To get things done, use checklists, fewer emails, and more desk time. 

c) Set clear metrics to ensure plan adherence. 

I've written about the OKR strategy for organizations with multiple people here. If you're on your own, I recommend the Wheel of Life approach. Both systems start with goals and tasks to achieve them. Then start executing on a realistic timeline. 

If you find solutions, weaknesses don't matter. 

Everyone's weak. You, me, Gates, Dalio, even Musk. Nobody will be great at all 5 steps of the system because no one can think in all the ways required. Some are good at analyzing and diagnosing but bad at executing. Some are good planners but poor communicators. Others lack self-discipline. 

Stay humble and ask for help when needed. Nobody has ever succeeded 100% on their own, without anyone else's help. That's the paradox of individual success: teamwork is the only way to get there. 

Most people won't have the skills to execute even the best plan. You can get missing skills in two ways: 

1. Self-taught (time-consuming) 

2. Others' (requires humility) light

On knowing what to do with your life 

“Some people have good mental maps and know what to do on their own. Maybe they learned them or were blessed with common sense. They have more answers than others. Others are more humble and open-minded. […] Open-mindedness and mental maps are most powerful.” — Ray Dalio 

I've always known what I wanted to do, so I'm lucky. I'm almost 30 and have always had trouble executing. Good thing I never stopped experimenting, but I never committed to anything long-term. I jumped between projects. I decided 3 years ago to stick to one project for at least 6 months and haven't looked back. 

Maybe you're good at staying focused and executing, but you don't know what to do. Maybe you have none of these because you haven't found your purpose. Always try new projects and talk to as many people as possible. It will give you inspiration and ideas and set you up for success. 

There is almost always a way to achieve a crazy goal or idea. 

Enjoy the journey, whichever path you take.

Prudence is advised. Be debt-free. Be frugal. Spend less.

This advice sounds nice, but it rarely works.

Most people never learn these two money rules. Both approaches will impact how you see personal finance.

It may safeguard you from inflation or the inability to preserve money.

Let’s dive in.

#1: Making long-term debt your ally

High-interest debt hurts consumers. Many credit cards carry 25% yearly interest (or more), so always pay on time. Otherwise, you’re losing money.

Some low-interest debt is good. Especially when buying an appreciating asset with borrowed money.

Inflation helps you.

If you borrow $800,000 at 3% interest and invest it at 7%, you'll make $32,000 (4%).

As money loses value, fixed payments get cheaper. Your assets' value and cash flow rise.

The never-in-debt crowd doesn't know this. They lose money paying off mortgages and low-interest loans early when they could have bought assets instead.

#2: How To Buy Or Build Assets To Make Inflation Irrelevant

Dozens of studies demonstrate actual wage growth is static; $2.50 in 1964 was equivalent to $22.65 now.

These reports never give solutions unless they're selling gold.

But there is one.

Assets beat inflation.

$100 invested into the S&P 500 would have an inflation-adjusted return of 17,739.30%.

Likewise, you can build assets from nothing.  Doing is easy and quick. The returns can boost your income by 10% or more.

The people who obsess over inflation inadvertently make the problem worse for themselves.  They wait for The Big Crash to buy assets. Or they moan about debt clocks and spending bills instead of seeking a solution.

Conclusion

Being ultra-prudent is like playing golf with a putter to avoid hitting the ball into the water. Sure, you might not slice a drive into the pond. But, you aren’t going to play well either. Or have very much fun.

Money has rules.

Avoiding debt or investment risks will limit your rewards. Long-term, being too cautious hurts your finances.

Disclaimer: This article is for entertainment purposes only. It is not financial advice, always do your own research.

I read 53 novels last year and hope to do so again.

Books are best if you love learning. You get a range of perspectives, unlike podcasts and YouTube channels where you get the same ones.

Book quality varies. I've read useless books. Most books teach me something.

These 9 novels have changed my outlook in recent years. They've made me rethink what I believed or introduced me to a fresh perspective that changed my worldview.

You can order these books yourself. Or, read my summaries to learn what I've synthesized.

Enjoy!

Fooled By Randomness

Nassim Taleb worked as a Wall Street analyst. He used options trading to bet on unlikely events like stock market crashes.

Using financial models, investors predict stock prices. The models assume constant, predictable company growth.

These models base their assumptions on historical data, so they assume the future will be like the past.

Fooled By Randomness argues that the future won't be like the past. We often see impossible market crashes like 2008's housing market collapse. The world changes too quickly to use historical data: by the time we understand how it works, it's changed.

Most people don't live to see history unfold. We think our childhood world will last forever. That goes double for stable societies like the U.S., which hasn't seen major turbulence in anyone's lifetime.

Fooled By Randomness taught me to expect the unexpected. The world is deceptive and rarely works as we expect. You can't always trust your past successes or what you've learned.

Antifragile

More Taleb. Some things, like the restaurant industry and the human body, improve under conditions of volatility and turbulence.

We didn't have a word for this counterintuitive concept until Taleb wrote Antifragile. The human body (which responds to some stressors, like exercise, by getting stronger) and the restaurant industry both benefit long-term from disorder (when economic turbulence happens, bad restaurants go out of business, improving the industry as a whole).

Many human systems are designed to minimize short-term variance because humans don't understand it. By eliminating short-term variation, we increase the likelihood of a major disaster.

Once, we put out every forest fire we found. Then, dead wood piled up in forests, causing catastrophic fires.

We don't like price changes, so politicians prop up markets with stimulus packages and printing money. This leads to a bigger crash later. Two years ago, we printed a ton of money for stimulus checks, and now we have double-digit inflation.

Antifragile taught me how important Plan B is. A system with one or two major weaknesses will fail. Make large systems redundant, foolproof, and change-responsive.

Reality is broken

We dread work. Work is tedious. Right?

Wrong. Work gives many people purpose. People are happiest when working. (That's why some are workaholics.)

Factory work saps your soul, office work is boring, and working for a large company you don't believe in and that operates unethically isn't satisfying.

Jane McGonigal says in Reality Is Broken that meaningful work makes us happy. People love games because they simulate good work. McGonigal says work should be more fun.

Some think they'd be happy on a private island sipping cocktails all day. That's not true. Without anything to do, most people would be bored. Unemployed people are miserable. Many retirees die within 2 years, much more than expected.

Instead of complaining, find meaningful work. If you don't like your job, it's because you're in the wrong environment. Find the right setting.

The Lean Startup

Before the airplane was invented, Harvard scientists researched flying machines. Who knew two North Carolina weirdos would beat them?

The Wright Brothers' plane design was key. Harvard researchers were mostly theoretical, designing an airplane on paper and trying to make it fly in theory. They'd build it, test it, and it wouldn't fly.

The Wright Brothers were different. They'd build a cheap plane, test it, and it'd crash. Then they'd learn from their mistakes, build another plane, and it'd crash.

They repeated this until they fixed all the problems and one of their planes stayed aloft.

Mistakes are considered bad. On the African savannah, one mistake meant death. Even today, if you make a costly mistake at work, you'll be fired as a scapegoat. Most people avoid failing.

In reality, making mistakes is the best way to learn.

Eric Reis offers an unintuitive recipe in The Lean Startup: come up with a hypothesis, test it, and fail. Then, try again with a new hypothesis. Keep trying, learning from each failure.

This is a great startup strategy. Startups are new businesses. Startups face uncertainty. Run lots of low-cost experiments to fail, learn, and succeed.

Don't fear failing. Low-cost failure is good because you learn more from it than you lose. As long as your worst-case scenario is acceptable, risk-taking is good.

The Sovereign Individual

Today, nation-states rule the world. The UN recognizes 195 countries, and they claim almost all land outside of Antarctica.

We agree. For the past 2,000 years, much of the world's territory was ungoverned.

Why today? Because technology has created incentives for nation-states for most of the past 500 years. The logic of violence favors nation-states, according to James Dale Davidson, author of the Sovereign Individual. Governments have a lot to gain by conquering as much territory as possible, so they do.

Not always. During the Dark Ages, Europe was fragmented and had few central governments. Partly because of armor. With armor, a sword, and a horse, you couldn't be stopped. Large states were hard to form because they rely on the threat of violence.

When gunpowder became popular in Europe, violence changed. In a world with guns, assembling large armies and conquest are cheaper.

James Dale Davidson says the internet will make nation-states obsolete. Most of the world's wealth will be online and in people's heads, making capital mobile.

Nation-states rely on predatory taxation of the rich to fund large militaries and welfare programs.

When capital is mobile, people can live anywhere in the world, Davidson says, making predatory taxation impossible. They're not bound by their job, land, or factory location. Wherever they're treated best.

Davidson says that over the next century, nation-states will collapse because they won't have enough money to operate as they do now. He imagines a world of small city-states, like Italy before 1900. (or Singapore today).

We've already seen some movement toward a more Sovereign Individual-like world. The pandemic proved large-scale remote work is possible, freeing workers from their location. Many cities and countries offer remote workers incentives to relocate.

Many Western businesspeople live in tax havens, and more people are renouncing their US citizenship due to high taxes. Increasing globalization has led to poor economic conditions and resentment among average people in the West, which is why politicians like Trump and Sanders rose to popularity with angry rhetoric, even though Obama rose to popularity with a more hopeful message.

The Sovereign Individual convinced me that the future will be different than Nassim Taleb's. Large countries like the U.S. will likely lose influence in the coming decades, while Portugal, Singapore, and Turkey will rise. If the trend toward less freedom continues, people may flee the West en masse.

So a traditional life of college, a big firm job, hard work, and corporate advancement may not be wise. Young people should learn as much as possible and develop flexible skills to adapt to the future.

Sapiens

Sapiens is a history of humanity, from proto-humans in Ethiopia to our internet society today, with some future speculation.

Sapiens views humans (and Homo sapiens) as a unique species on Earth. We were animals 100,000 years ago. We're slowly becoming gods, able to affect the climate, travel to every corner of the Earth (and the Moon), build weapons that can kill us all, and wipe out thousands of species.

Sapiens examines what makes Homo sapiens unique. Humans can believe in myths like religion, money, and human-made entities like countries and LLCs.

These myths facilitate large-scale cooperation. Ants from the same colony can cooperate. Any two humans can trade, though. Even if they're not genetically related, large groups can bond over religion and nationality.

Combine that with intelligence, and you have a species capable of amazing feats.

Sapiens may make your head explode because it looks at the world without presupposing values, unlike most books. It questions things that aren't usually questioned and says provocative things.

It also shows how human history works. It may help you understand and predict the world. Maybe.

The 4-hour Workweek

Things can be done better.

Tradition, laziness, bad bosses, or incentive structures cause complacency. If you're willing to make changes and not settle for the status quo, you can do whatever you do better and achieve more in less time.

The Four-Hour Work Week advocates this. Tim Ferriss explains how he made more sales in 2 hours than his 8-hour-a-day colleagues.

By firing 2 of his most annoying customers and empowering his customer service reps to make more decisions, he was able to leave his business and travel to Europe.

Ferriss shows how to escape your 9-to-5, outsource your life, develop a business that feeds you with little time, and go on mini-retirement adventures abroad.

Don't accept the status quo. Instead, level up. Find a way to improve your results. And try new things.

Why Nations Fail

Nogales, Arizona and Mexico were once one town. The US/Mexico border was arbitrarily drawn.

Both towns have similar cultures and populations. Nogales, Arizona is well-developed and has a high standard of living. Nogales, Mexico is underdeveloped and has a low standard of living. Whoa!

Why Nations Fail explains how government-created institutions affect country development. Strong property rights, capitalism, and non-corrupt governments promote development. Countries without capitalism, strong property rights, or corrupt governments don't develop.

Successful countries must also embrace creative destruction. They must offer ordinary citizens a way to improve their lot by creating value for others, not reducing them to slaves, serfs, or peasants. Authors say that ordinary people could get rich on trading expeditions in 11th-century Venice.

East and West Germany and North and South Korea have different economies because their citizens are motivated differently. It explains why Chile, China, and Singapore grow so quickly after becoming market economies.

People have spent a lot of money on third-world poverty. According to Why Nations Fail, education and infrastructure aren't the answer. Developing nations must adopt free-market economic policies.

Elon Musk

Elon Musk is the world's richest man, but that’s not a good way to describe him. Elon Musk is the world's richest man, which is like calling Steve Jobs a turtleneck-wearer or Benjamin Franklin a printer.

Elon Musk does cool sci-fi stuff to help humanity avoid existential threats.

Oil will run out. We've delayed this by developing better extraction methods. We only have so much nonrenewable oil.

Our society is doomed if it depends on oil. Elon Musk invested heavily in Tesla and SolarCity to speed the shift to renewable energy.

Musk worries about AI: we'll build machines smarter than us. We won't be able to stop these machines if something goes wrong, just like cows can't fight humans. Neuralink: we need to be smarter to compete with AI when the time comes.

If Earth becomes uninhabitable, we need a backup plan. Asteroid or nuclear war could strike Earth at any moment. We may not have much time to react if it happens in a few days. We must build a new civilization while times are good and resources are plentiful.

Short-term problems dominate our politics, but long-term issues are more important. Long-term problems can cause mass casualties and homelessness. Musk demonstrates how to think long-term.

The main reason people are impressed by Elon Musk, and why Ashlee Vances' biography influenced me so much, is that he does impossible things.

Electric cars were once considered unprofitable, but Tesla has made them mainstream. SpaceX is the world's largest private space company.

People lack imagination and dismiss ununderstood ideas as impossible. Humanity is about pushing limits. Don't worry if your dreams seem impossible. Try it.

Thanks for reading.

Don't know how to start an online business? Here's a guide. By following these recommendations, you can build a lucrative and profitable online business.

What Are Online Businesses Used For?

Most online businesses are websites. A self-created, self-managed website. You may sell things and services online.

To establish an internet business, you must locate a host and set up accounts with numerous companies. Once your accounts are set up, you may start publishing content and selling products or services.

How to Make Money from Your Online Business

Advertising and marketing are the best ways to make money online. You must develop strategies to contact new customers and generate leads. Make sure your website is search engine optimized so people can find you online.

Top 5 Online Business Tips for Startups:

1. Know your target audience's needs.

2. Make your website as appealing as possible.

3. Generate leads and sales with marketing.

4. Track your progress and learn from your mistakes to improve.

5. Be prepared to expand into new markets or regions.

How to Launch a Successful Online Business Without Putting in a Lot of Work

Build with a solid business model to start a profitable online business. By using these tips, you can start your online business without paying much.

First, develop a user-friendly website. You can use an internet marketing platform or create your own website. Once your website is live, optimize it for search engines and add relevant content.

Second, sell online. This can be done through ads or direct sales to website visitors. Finally, use social media to advertise your internet business. By accomplishing these things, you'll draw visitors to your website and make money.

When launching a business, invest long-term. This involves knowing your goals and how you'll pay for them. Volatility can have several effects on your business. If you offer things online, you may need to examine if the market is ready for them.

Invest wisely

Investing all your money in one endeavor can lead to too much risk and little ROI. Diversify your investments to take advantage of all available chances. So, your investments won't encounter unexpected price swings and you'll be immune to economic upheavals.

Financial news updates

When launching or running a thriving online business, financial news is crucial. By knowing current trends and upcoming developments, you can keep your business lucrative.

Keeping up with financial news can also help you avoid potential traps that could harm your bottom line. If you don't know about new legislation that could affect your industry, potential customers may choose another store when they learn about your business's problems.

Volatility ahead

You should expect volatility in the financial sector. Without a plan for coping with volatility, you could run into difficulty. If your organization relies on client input, you may not be able to exploit customer behavior shifts.

Your company could go bankrupt if you don't understand how fickle the stock market can be. By preparing for volatility, you can ensure your organization survives difficult times and market crashes.

Conclusion

Many internet businesses can be profitable. Start quickly with a few straightforward steps. Diversify your investments, follow financial news, and be prepared for volatility to develop a successful business.

Thanks for reading!

I apologize if this sounds basic, but throughout my career, I've always been clear that a company's activities are shaped by its founder(s)' morality.

I consider Palantir, owned by PayPal founder Peter Thiel, evil. He got $5 billion tax-free by hacking a statute to help middle-class savings. That may appear clever, but I think it demonstrates a shocking lack of solidarity with society. As a result of this and other things he has said and done, I early on dismissed Peter Thiel as someone who could contribute anything positive to society, and events soon proved me right: we are talking about someone who clearly considers himself above everyone else and who does not hesitate to set up a company, Palantir, to exploit the data of the little people and sell it to the highest bidder, whoever that is and whatever the consequences.

The German courts have confirmed my warnings concerning Palantir. The problem is that politicians love its surveillance tools because they think knowing more about their constituents gives them power. These are ideal for dictatorships who want to snoop on their populace. Hence, Silicon Valley's triumphalist dialectic has seduced many governments at many levels and collected massive volumes of data to hold forever.

Dangerous company. There are many more. My analysis of the moral principles that disclose company management changed my opinion of Facebook, now Meta, and anyone with a modicum of interest might deduce when that happened, a discovery that leaves you dumbfounded. TikTok was easy because its lack of morality was revealed early when I saw the videos it encouraged minors to post and the repercussions of sharing them through its content recommendation algorithm. When you see something like this, nothing can convince you that the firm can change its morals and become good. Nothing. You know the company is awful and will fail. Speak it, announce it, and change it. It's like a fingerprint—unchangeable.

Some of you who read me frequently make its Facebook today jokes when I write about these firms, and that's fine: they're my moral standards, those of an elderly professor with thirty-five years of experience studying corporations and discussing their cases in class, but you don't have to share them. Since I'm writing this and don't have to submit to any editorial review, that's what it is: when you continuously read a person, you have to assume that they have moral standards and that sometimes you'll agree with them and sometimes you won't. Morality accepts hierarchies, nuances, and even obsessions. I know not everyone shares my opinions, but at least I can voice them. One day, one of those firms may sue me (as record companies did some years ago).

Palantir is incredibly harmful. Limit its operations. Like Meta and TikTok, its business strategy is shaped by its founders' immorality. Such a procedure can never be beneficial.