Ray Dalio (Part 2): Principles of Happiness, Grief, and What Money Can’t Buy

I'm Nicole Lappin, the only financial expert you don't need a dictionary to understand.

It's time for some money rehab.

If you caught the first part of my conversation with the one, the only Ray Dalio, you know we went deep into the economy, inflation, debt cycles, and how to brace your portfolio for whatever comes next.

It was classic Dalio.

Big ideas, tons of data, all grounded in decades of market experience.

But in part two, we get versatile.

Ray may have built the world's biggest hedge fund and coined concepts like the all-weather portfolio.

But today we go beyond the balance sheet.

We talk about life, about happiness, about what money can and can't buy.

He shares what he calls the worst moment of his life, and it has nothing to do with money.

For the first time in an interview, he opens up about the death of his oldest son in 2020.

Ray also opens up about what he wants his legacy to be, how he hopes the next generation thinks about success, failure, and meaning.

These are the kinds of conversations that don't show up in earnings reports, but they matter just as much, if not more.

And I have to say, this is one of those rare interviews, and I even have chills as I'm saying this, that has stayed with me and will stay with me long after we stopped recording.

Let's get into it.

And you have all the money in the world, or access to all of the money in the world.

We can agree on that.

But you haven't been immune from pain.

You and your family haven't been immune from pain.

That's right.

Every painful experience is a learning lesson.

Yes.

And so that brings us to the age-old question: does money bring you happiness?

There's an amount of money

that is good.

And what's that?

Look, why money?

Why money has to do with, is money

something that brings your family security, its freedom, freedom of choice, its power to do the things you want to.

You can have a dream and you can build it out.

Money brings you all of that.

It can bring you health.

It can bring you many, many wonderful things.

Okay.

As it starts to be status

or

showing things off,

insecurity, feeding it, that's not healthy.

I believe that's not healthy.

And I think people can get hung up on that.

In my view, I think people really have to make sure it's not a reflection of an unhealthy state of mind or an unhealthy pursuit, as much as it is

the security, the freedom, and then the ability to savor things.

That's my own view about money.

I'm into philanthropy.

It gives me the power to be able to help and do things.

These are wonderful things, so I'm not knocking money.

It's a great, great, great thing, okay?

But really, what is most fundamental, if you look at surveys done across countries of well-being, happiness,

the happiest societies are not the rich societies.

past the basic level of income so that you don't have poverty and all the pain that comes from absence of money.

The greatest source of happiness in life across societies is community.

Do you have a sense of community?

People care about you, you care about them, you have fun together.

These are the sources of well-being.

They're even the source of health.

So that's what it looks like from my perspective of having the benefit of having no money

and then having

an enormous amount of money.

and I fortunately did it in the right order, from nothing up rather than from up down.

But I've had the whole range, and I really believe that what I'm saying is true.

And I've gotten to meet all different kinds of people around the world.

That's my perspective on money, which is also a perspective of success.

So for me, success is having meaningful work and meaningful relationships that are truthful.

Do you check how much money or net worth you have at this point?

Or it doesn't matter.

I kind of know what it is.

I don't.

But not often.

Yeah.

Once a quarter.

Well, as an investment manager, I'm playing my game.

Let's say you're how many chips do you have at the poker table and I'm playing that and so on.

I think money can buy you five things, right?

Money can buy you stuff, which doesn't bring happiness.

It can buy you experiences, which does.

It can buy your time back.

It can buy you charity, the ability to give to charity, which probably does contribute to happiness.

And it also gives you the ability to save, which I think people gain happiness from seeing them be able to take care of their family and continue to save and have that momentum.

I think our perspectives are similar on that, and that's why in talking with your audience, I think it's good that they reflect on that.

You've been married for 40 years?

I think it's 47.

Congratulations.

Thank you.

What's this principle or this?

Any principle is not 100% true for everybody.

Everybody has different tastes.

So when I say that, I think in a general sense, and certainly for me, I think probably the most important decision you can make is who you spend your life with.

There's an extraordinary relationship

of long, close relationships.

Wow, are they valuable?

And so your life partner, it's just

so important to have the right life partner.

Is it your biggest asset or liability?

Oh, the biggest joy and helping each other and

fun with each other and all the different ways that you can have fun with each other.

It's like old friends.

There's nothing like it.

You know.

So anyway, I've been blessed with an amazing wife and a family.

And then life gives me difficulties.

The worst thing

that could have ever happened to me

that I would have rather died than have it was the losing of my son.

I lost a son.

Life brings you these things.

This is life, right?

So that's the nature of life.

And we were blessed in some ways.

We have the worst.

It happens to everybody in their own ways.

That's why I think taking a principled approach like pain plus reflection equals progress, about learning about how reality works, this is most fundamental.

Yeah, and money unfortunately can't immune you from those tragedies.

Well that's reality.

You have to accept reality,

you have to understand reality, and you have to know how to best deal with reality and those are principles.

I could cry thinking about the news of your son in 2020 when I saw that as a new mother.

I can't imagine.

Right.

I'm so sorry.

And

I'm just curious how at that point changed your principles.

First of all, it's not just my feeling.

It's my wife's feeling.

It's his brother's feeling, all the love, and so on.

But what I did is, as we went through it, I meditate.

I do transcendental meditation.

I've done this since 1969.

So I've done it, you know, forever.

I would say, by the way, There's nothing that I can pass to your listeners that would be more valuable, and there's nothing that I would attribute my success to more than transcendental meditation.

The answer to your question was there's this dichotomy between the emotional you

and the intellectual you, and it becomes irreconcilable.

It was the reflections and being open and articulating what I felt.

And I've been very also open to help others who have gone through this because there's ways of going through that, which is a whole other podcast.

And that's why love and mutual support and also then starting to appreciate things more.

You asked how it changed.

Boy, it helped to put things in perspective, right?

It reminds you.

Because we can get hung up on the trivial things.

And almost everything is trivial in relationship to that.

So not only the feeling of the loss and the pain of that, but the feeling of the appreciation for what I have in the loving of my wife, the loving of my family, and what we have.

We never appreciated it as much as a result of that.

And then how do we nurture that and how do we make sure that that's such an important part of our lives while keeping, in a sense, him, my son, still with us in our own way.

It's so kind of you to do that, to help others who might be going through this.

Oh, of course.

What would you say to somebody who might be dealing with the unthinkable?

Although there's a process that I go through, each has to do it in their own way.

There will be first the shock and it'll go through a phase.

You're going to go through phases.

Know that you're going to go through phases.

What I did was my wife and I would have tea each morning and we had a picture of him because our tradition is to sit and have a cup of tea each morning.

There he was.

And then we would journal memories of him.

This was after my family and I all went away.

We want to just do whatever came naturally.

I would recommend people doing whatever comes naturally and well.

If you cry, if you want to, don't be thinking about the obligations and the protocols.

It sounds like you spent time in nature, too.

We spent time in nature, all of these things.

There are these phases.

And then I think most importantly to keep him with me, keep him with us together.

Have the pictures, think, not to try to avoid thinking of.

And then with time, there's a bitter sweetness.

That what happens is first there's the bitterness, the great pain, and it's very difficult.

And then there's a sweetness of that memory and so on.

You will find that the sweetness will increase.

and the bitterness will decrease.

The ache will always be there, but it'll come and go depending on your attentions, what you're paying your attentions to.

And then you will really start to enjoy and smile and think of the memories and so on, and then appreciate what you have.

I'm sure there's not a day that goes by that you don't think about it.

Yes, but it ebbs and flows.

There are sometimes, and I see an empty seat and I imagine, and that's what it's like, and then my mind's elsewhere.

I'm going to be going to the 100th anniversary of the grand old Opry.

And when I'm looking there at the concert and having fun with the people I love, okay, it will not be top of mind.

So you learn how to dance with a limp.

Yeah, that's a good way of describing it.

Hold onto your wallets.

Money rehab will be right back.

And now for some more Money Rehab.

It sounds like your family is your biggest asset.

Of course.

In 2011, didn't you sign the giving pledge with your wife, Barbara?

So half of your money will go to charity.

Yeah.

And where is the rest going?

You know, probably significantly more than half my money will go to charity.

Then it's basically, I don't want my grandchildren.

to be in a position where they can't have an adequate education and an adequate health care and that sort of thing.

So some money is being used for that.

But most of it, I think, probably will go to those charities that will have better impact because I've been, wow,

the world has been a wonderful place.

The environment, the country, United States, a land of opportunity.

So I, and I see so many people.

I empathize with so many people.

And are you optimistic for the world that your grandkids are going to inherit?

There is going to be turbulence and

fantastic opportunities and terrible twists and that's an adventure, okay?

That's a challenge.

It's like going into the jungle.

And so I think it's the approach to life that matters more than anything.

When people think bad things happen,

of course bad things happen.

Good things happen to everybody, a lot.

It's your approach to that.

So the most important thing, whether it's my grandchildren or whether it's your listeners or anybody out there, is this idea of principles and approach so that that adventure, life's adventurous journeys, that you are able to navigate it well.

So I think that's the most important thing.

Will it be, you know, the world is going to be turbulent.

Life is hard.

Being very successful is very hard.

But hard means strength.

It's just the way it is.

So you have to be strong.

You have to be capable.

You need to, for example, understand what your weaknesses are as well as your strength.

And then you can deal with your weaknesses.

There's no problem.

You can have somebody who is strong where you're weak help you.

There are lots of ways of dealing with that.

But there are so many people who have ego barriers that stand in the way of them looking at their weaknesses because if you look at your weakness, you can deal with it.

There's first-order consequences and second-order consequences for most things.

And the second-order consequences are usually the opposite of the first-order consequences.

Let's say, for example, the food that you most enjoy to eat is probably the least healthy for you.

Okay, the exercise that you want to do is not what you want to do, and it's the most most good for you.

Okay, so there are a lot of these kind of tricks.

It's like the, I think they call it the marshmallow test for a kid.

You have a choice.

You have a marshmallow now, or you could have two marshmallows in 10 minutes.

What's your choice?

Immediate gratification or getting stronger.

And getting stronger requires challenge.

Okay?

That's why also pain plus reflection equals progress.

And so when you start to realize that and you get that hardwired so it's almost instinctual to operate that way, then you get power, then you get stronger.

That's just how reality works.

Ray, what do you want your legacy to be?

I think legacy is gift, not memory.

Memory is

not important and I don't really want to do that.

The gift I want to give most importantly is principles.

to help people.

Legacy is gift to principles.

That's why I wrote these books.

I wrote Principles of Life and Work, which over 5 million people

read in

36 languages in something like 125 countries.

And people come up to me and they say, thank you.

It has changed my life.

Okay, that's a joy, that.

Understanding.

Because I think that principles are ways of approaching life.

And by having learned a bunch of them that people can consider, I think that that's my most valuable thing to give.

In addition, I'm, of course, philanthropically, to pass along whatever I have because, as I say, I'll disappear.

And then if I can pass along those things, that would be best.

That would be my legacy.

That would be my dream.

Thank you.

for giving us those gifts.

I hope they're helpful.

We end our episodes by asking all of our guests for a tip that listeners can take straight to the bank.

What's one that you would offer?

You've given us so many gems, so many principles already, but is there something that we missed?

There are so many indicators that come our way, economic indicators, is there something that

is

often overlooked?

Okay, for life, evolve well.

Keeping in mind pain plus reflection equals progress and that you want principles.

For investment, diversify well with a game plan that you know how it would have worked in the past and that you're comfortable with in the future.

Don't

be reactive.

In other words, so many people, the news comes out, the markets move, and then they reactively take action.

They say this time it's going to be different, though.

Don't do that.

Okay, news comes out, markets move,

and then take action is terrible.

By instead having a game plan that you know how it would have worked in the past and recognizing that there's ups and downs and sticking with that game plan is most important.

Are there big economic indicators that we should always pay attention to?

It sounds like inflation and growth are your favorites.

Yes, but I think you have to ask yourself, are you going to beat the pros?

Investing is a zero-sum game.

So competing in the markets is more difficult than competing in the Olympics.

So I would say be humble.

I put in hundreds of millions of dollars a year to try to beat the markets.

And others do.

And that's what it takes.

So don't compete with you.

Or if you do, play around with the money and amount of money that you can learn from.

So if you're playing the game and you do it over a period of time and you learn, you can do that.

But don't be arrogant and lose your money.

My first book, Principles of Life and Work, which captures my perspective, is

I first want to establish that I'm a dumb shit and that whatever

success I have had in life is more because

of my knowing how to deal with what I don't know than anything I know.

And that's true, not only in the diversification, but also in seeking the input of the smartest people in the world too.

You know?

That's what I did.

Okay.

Right.

It works.

Thank you, Ray, for giving us the 60 years of experience and knowledge.

It's such a joy for me.

Thank you.

For radical transparency, how was this interview?

Great.

Yeah.

I thought the second half was better than the first.

No, what do you think so?

Really?

No, I can't tell.

Tell me.

I never can tell, really.

I think what we have to do, if you can, is ask your audience.

We will.

Oh, can you?

Yeah, of course.

That's the feedback.

And then we think about reflecting and improving.

Please come back anytime.

My pleasure.

I hope you enjoyed it.

Thanks, Ray.

Thank you for having me.

You're the best.

And actually, when we were starting this network, one of my goals, I put you on the list.

Oh, so this is such a joy.

Thank you.

I wanted to make a million dollars of revenue, which was easier than getting you on the show.

I'm so glad.

Isn't that fantastic?

Money Rehab is a production of Money News Network.

I'm your host, Nicole Lapin.

Money Rehab's executive producer is Morgan Lavoie.

Our researcher is Emily Holmes.

Do you need some Money Rehab?

And let's be honest, we all do.

So email us your money questions, moneyrehab at moneynewsnetwork.com to potentially have your questions answered on the show or even have a one-on-one intervention with me.

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And lastly, thank you.

No, seriously, thank you.

Thank you for listening and for investing in yourself, which is the most important investment you can make.