Stephen Anderson - Ray Dalio: A Biography of the Legendary Investor

Ray Dalio

A Biography of the Legendary Investor

By Stephen Anderson

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Introduction

W hat does it take to receive the title of the worlds 58th wealthiest person of 2019?

Courage, smarts, and a hunger to be more. To do more. A desire to not accept circumstances as they are. The idea that if the grass is greener on the other side, then the only way to get there is through hard work and sheer determination. And, of course, a sense of ambition from a young age.

Many people might think that luck plays an important role in reaching a certain position, and that those who spend their time watching gorgeous sunsets on a million-dollar yacht somewhere in exotic waters overlooking lush beaches got there by winging it, and Lady Luck gave her blessings.

There is no denying it. Luck is an important factor when it comes to gaining or losing something in our lives. But distilling everyones life into a matter of whether they had good or bad fortune is tantamount to ignoring their lifes struggles. What had they faced before they reached a certain point in their lives? What challenges did they overcome? What defeats did they have to endure and keep pushing past despite the odds?

We improve our luck through our actions, and while that might sound like something that someone who hasnt experienced bad luck would say, it is still the truth. You improve your luck based on the actions you take. The more actions you perform, the more luck you create.

Take, for example, the idea of investing in a company at the age of 12.

A simple choice such as that is enough to create an opportunity and an avenue for success. The individuals luck improves as another branch opens in life filled with its own set of potentials.

At this point one might ask, Who is this person who decided to invest at the age of 12? Who would have thought about it when all they should have been thinking about was their school, friends, sports, and maybe some fun and games? Just how much did the preteen invest and what changed?

Before we go into that, it is important to know about the state of the world at that time. There were changes and events that would impact not just a few nations, but the entire world. We were exiting the after-effects of World War II, trying to rebuild countries and political and economic situations. But no one received an opportunity to take a breath, or if they did, it was a rather small breath. Thats because shortly following the climax of the Second World War, the Cold War immediately revealed its ugly side. Two powerful nations were locked in a state of impending nuclear threat, like two rams locking horns and waiting for one to give up. Racial tensions were reaching a feverish pitch with violence breaking out all across the United States and Civil Rights movements having a broader appeal. But it was also the time of the Space Age. The Soviet Union became the first nation to launch a person into space. With so much happening in the world and at home, it was unusual for a preteen to think about spending money as capital in a company. That does not mean that investment was an impossible thought. Rather, that thought would probably not be the first to enter the mind of someone who hadnt even finished high school and pondered their course in life.

But that did happen. Someone did have that thought and came to a certain conclusion that would change the course of that individual's history.

With that change came other milestones scattered throughout the persons life. Changes that were significant and remarkable. Choices and decisions that would bring the person into the Bloombergs list of the wealthiest people of 2019.

While the destination itself sounds fantastic and definitely noteworthy, it is equally important to look at the journey. And thats what we are going to look at. The journey that led someone from a point where success was not the main focus, to a point where success became a definition.

But wait. Before we dive into the journey of the person, there is just one important thing left to do. An introduction.

I welcome you to take a glimpse into the life of Ray Dalio, now a billionaire hedge fund manager, investor, and philanthropist. We are going to look at his life before he acquired the billionaire status, the journey that led him to where he is now, and the lessons we can learn from a man who has lived a life that could easily be the plot of a Hollywood movie.

Chapter 1: Stage of Life: Birth of an Investor (1949-1975)

A ugust 8. Much of the first half of the 1940s was taken over by events surrounding World War II. You can pick any August 8 from 1940 to 1945, and chances are there were probably more tragedies and conflicts recorded in history on those days than any hopeful or joyful events.

August 8, 1942. A group of German saboteurs had entered Washington to wreak havoc on the citys civil infrastructure. Thankfully, they were caught before they could bring any of their plans to fruition.

August 8, 1945. The Soviet Union decided to declare war on Japan. To show how serious they were about their decision, they readied over one million soldiers to enter Manchuria, which was a Japanese-occupied territory in China.