How did Dalio, founder of the world’s biggest hedge fund firm, Bridgewater Associates, go from a regular middle-class boy mowing lawns in New York, to amassing a personal wealth of over $15 billion? Learn more about the rise to success of Ray Dalio.
Story of Ray Dalio
It was with $300 that Dalio had saved from carrying golf clubs at the Links Golf Club in New York as well as mowing lawns and delivering newspapers, that this small boy took his first step into the investing world. While carrying golf bags at the Club, he listened in to the conversations of those he was caddying for, including many high net worth individuals who often talked about the wonders of the stock market. Taking a leap into the dark, Dalio invested in his first stock, Northeastern Airlines, at age 12, and luckily for him, his investment quickly tripled. From that moment, he was hooked to the investing world and by age 26 he had already started his own trading company, Bridgewater Associates. From surrounding himself with smart minds to his careful study of the markets, he has since become one of the world’s most powerful multi-billionaires!
From this humble beginning of carrying golf bags and mowing lawns, to an exceptional man underpinning the world’s largest hedge fund, what are some of the pieces of advice that Dalio has learned along the way?
In the interview below with Robert Kegan, a psychology professor at Harvard, we learn a little of the billionaire’s insights and some advice from the success of Bridgewater.
Let everyone see everything
Being honest and ‘radically transparent’ leads to truthful, productive conversations and is a cornerstone of the culture at Bridgewater, says Dalio. (Some wonder whether he takes this too far – apparently every meeting at Bridgewater is videoed and archived. If you’re working at Bridgewater, let’s hope every day is a good hair day!) Yet this level of transparency will lead to deep relationships and meaningful work, something that every company or person wants.
Know your weaknesses
As part of his belief in extreme transparency, Dalio also believes it’s so important to know what your weaknesses are and to take steps to improve them. But don’t be afraid of making mistakes either: “mistakes are how we learn” says Dalio, and the process of failing, learning and then moving forward, helps us to grow from our mistakes and to grow ourselves as individuals.
Surround yourself with smart people
From the moment he invested in Northeast Airlines, Dalio has surrounded himself with the smartest minds and acts as a sponge to their knowledge and insights. He asks opinions of those he trusts – his stockbroker, the people he caddied for and even his barber – and consistently challenges his own opinions. Dalio believes that by listening and learning from so many others, it helps us to objectively evaluate a situation and arrive at the best possible solution.
Recognize the power of teamwork
Many of us often think we have superpowers and can be successful with nobody but ourselves for company. But not Dalio: “Nobody has all they need to be successful. We need each other to play different roles.” That is one of the main reasons why, according to Dalio, having a team of smart people and having the right company culture, is all that matters.
Early Life and Rise to Success
The son of a jazz musician and a homemaker, Ray Dalio was born in 1949 in the borough of Queens, New York City. As mentioned at the beginning of this article, his interest in the stock markets arose when he was aged 12, working as a caddy at the Links Golf Club. High-wealth members who played on this prestigious golf course (including figures such as the Duke of Windsor and Richard Nixon) would be constantly discussing the booming stock market of the 1960s, and little Dalio’s ears were pricked.
With $300 worth of savings from his side jobs, which included mowing lawns and delivering newspapers, 12-year-old Dalio decided to take a plunge and invest in the stock market. At five dollars a share, the first stock he bought was Northeast Airlines and it proved to be an excellent choice. Northeast was involved in a merger (it’s now part of Delta Air Lines) and Dalio quickly tripled his initial investment, a healthy sum for such a young boy!
Dalio was very gifted academically and after graduating from Long Island University, he won himself admission to Harvard Business School. But unlike many of us on our summer vacations, Dalio certainly didn’t sit back on his laurels in his break between college and business school, and between his 2 years studying for his MBA. The first summer Dalio worked as a clerk at the New York Stock Exchange, the second trading commodities at Merrill Lynch.
The time spent working at Merrill Lynch proved pivotal for Dalio and upon returning to Harvard, Dalio and some friends set up a small company to trade in commodities. It’s hard to imagine the comrades had time to start their own company while getting their MBAs, and little became of it while at Harvard. After graduating, his friends pursued other paths but Dalio stuck with the small venture and kept the company’s name, fully committing himself to it at age 26. Perseverance and hard-work were rewarded: that company’s name was Bridgewater Associates.
The company grew massively over the coming years. Thanks to Dalio’s careful study of market history, Bridgewater experienced phenomenal success. In 1991, the firm opened its flagship hedge fund known as Pure Alpha and continued to be successful, even through the financial crisis beginning in 2008. At age 67, Dalio still plays a huge role at the company, as Chairman and Co-Chief Investment Officer, that manages a whopping $150 billion in assets. From $300 from a summer job to a personal wealth of $15.2 billion, Dalio’s story is sure to aspire the inner-entrepreneur within all of us!
From a lower middle class childhood to one of the most successful people in finance, we can all learn a thing or two from Dalio! You can start investing with the iBillionaire app today, with as little as $100.