If you haven’t read Ray Dalio’s Principles, I suggest you do so now if you’re looking for an in-depth look at how one can achieve their life goals.
Dalio, a former manager of one of the most successful hedge funds in the world, is a great role model for us to all look to, whether our own goals involve becoming rich or not. His principles for life and work are covered in depth in Principles, and they hold weight for most anyone, from any walk of life, who is looking to improve themself.
Below, I summarize my personal favorite chapter, or principle, that Dalio covers. Setting well defined goals and realizing the steps to achieve them is something that I and many other struggle with. However, it’s important to take the time to do so, otherwise your dreams will remain as dreams, and ideas as ideas.
While there are several approaches to goal setting, I love Dalio’s, because of his systematic and universal approach. He approaches goal setting and achieving the way a hero on a journey would – having a clear idea of what he wants, then going for it, only to realize there is a problem internally or externally blocking him from getting it. HE then must create a plan of attack and carry it out to achieve his success.
Anyways, here is the Five-Step Process:
1.) Have Clear Goals
The first step to defining clear goals for yourself if to prioritize them. While there might be several presentable options as to what you can do with your life, there’s limited time and therefore you must prioritize. You can always accomplish the other goals another time, whether sooner, or later on.
Remember that your goals should feel right as goals and desires. Reach for things that will expand your capabilities, but don’t do it purely for this cause. Likewise, do things you enjoy, but find ways for them to work for you and your wellbeing, not against you.
Don’t rule out a goal if it seems unattainable or unrealistic. During this step, we’re only focusing on the what, not the how.
Lastly, know what to do with your setbacks. Be able to look at what you have done, see what’s working, and adjust course accordingly. Be flexible and hold yourself accountable. And always know when it’s best to minimize risk, versus to risk it all (in a calculated way).
2.) Identify And Don’t Tolerate Problems
Look at your problems as opportunities to improve. To do this, it might involve some pain in facing harsh realities about yourself or others, but you have to get over this. Remember, acknowledging problems is not the same as accepting them.
When identifying problems, think if the problem is due to lack of skill or is an innate problem or habit you embody. Likewise, find if the problem is within yourself or within another person who may inhibit you. Doing so prepares you to find the right solution.
Think if the problem is a cause or an effect. Most problems are effects that can be treated by looking at the cause.
Invest first in fixing problems that will yield you the biggest returns in your success.
Finally, do not tolerate problems no matter what.
3.) Diagnose Problems To Get At Their Root Causes
For this step, focus on figuring out the “what is” before figuring out how to fix it.
Distinguish proximate causes from root causes. For example, missing the train because you didn’t check the train schedule is a proximate cause of problems. Proximate causes are actions, or lack thereof, that lead to problems. Usually there is a root cause behind them, which causes a chain effect of proximate cause problems. For example, you may have not checked the train schedule because you are forgetful. If so, now you know which problem to focus on – the root cause.
4.) Design a Plan
Start by remembering that there are several paths to fixing your problems and achieving your goals.
Therefore, start with focusing on the big picture of things you need to accomplish to reach your goals. Which tasks need to get done first, and in which order? From here, break down the specifics such as timelines and micro-tasks, but don’t set your heart on these, as issues may come up and force you to be flexible.
If your plan involves other people, make sure it’s written down for them to refer to.
Most importantly, remember that having an imperfect plan is better than having a perfect nonexistent plan!
5.) Push Through to Completion
Planning without execution is useless. As you begin the journey of execution, keep your eyes on the goal and remember the why, or the purpose of the journey.
Make sure your to do list is ready at the start of each day, and follow through without question.
Lastly, remember to track your progress. Seek outside help, whether for outside perspective or to help with tasks you may not feel as competent at.
And that’s it!
Once last important reminder that Dalio gives us in this chapter is to reflect and think about which of these steps we typically fail at. Since they each require a different type of thinking (abstractly vs. concrete; creatively vs. logically), it’s unlikely that you’re going to be a master at each one.
Once you identify which step you fail at, it’s important to decide whether you will try to solve it on your own, or work with other people to combat it. Either way, “if you work on it,” Dalio says, “you will almost certainly be able to deal successfully with your one big thing”.