Long Island University Commencement Speech

Key ideas

Dalio tells graduates their approach to life matters more than a diploma: experiment, learn from painful mistakes through written principles, and measure success by meaningful work and relationships.

1. 1

   Expect to know less than you think

   Dalio tells graduates they almost certainly overestimate what they know, more so if their grades were good, because teachers and parents typically frame success as learning what is taught and avoiding mistakes. He says this has probably made them a bit arrogant, as it did him, and that living life and encountering reality is what will teach them.

2. 2

   Treat painful mistakes as puzzles

   Dalio offers the formula Pain + Reflection = Progress: pain signals a problem, and solving it yields a principle worth writing down. He says meditation and calmly recording principles are what carried him through hard times, including the loss of a son.

3. 3

   Balance audacity with humility

   Dalio retells anticipating the 1982 debt crisis, then being wrong about stocks, letting almost everyone go and borrowing from his father. He says this led him to question how he knew he was right, to seek smart people who would disagree, and to find that diversification could cut risk without cutting returns.

4. 4

   Use the early years to experiment

   Dalio divides life into three phases and says the first decade or so of the working phase is for experimenting and reflecting. The aim, he argues, is to discover your nature and the path that suits it, while learning to think for yourself and handle what you do not know.

5. 5

   Define success beyond money and status

   Dalio argues that success is not holding far more money or status than you need, and calls that pursuit an unhealthy obsession for many people. For most people, he believes, it means work and relationships that thrill you, which still requires owning your life and working very hard at it.

In Ray’s words

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