In the latest episode of the Philanthropy Roundtable interview series, “Doers to Donors,” Roundtable President and CEO Elise Westhoff interviewed entrepreneur, investor and philanthropist Ray Dalio. Dalio is the founder, co-chief investment officer and board member of one of the world’s largest hedge funds, Bridgewater Associates.
During the interview, Dalio discussed starting Bridgewater Associates from his modest two-bedroom apartment, the principles that guide his business, and how his son, Matt, inspired his family’s philanthropy. Dalio Philanthropies currently supports a variety of causes, including education, medical research, mental health, entrepreneurship, and ocean exploration, among others.
playing “the game”
By his own account, Ray Dalio wasn’t much of a student growing up.
“I didn’t like school, all the rote learning,” he said.
The golf course, however, was a different matter altogether.
When Dalio was 12, he took a job at the Links Golf Club, near his home in Manhasset, Long Island. He says the decision to take the job “set the course” of his life, providing an introduction to Wall Street professionals who taught him about the stock trading business. Dalio bought his first stock for $5 a share and tripled his money.
“I said: ‘I like this game. This game is an easy game,’” Dalio recalled. “Of course, it’s not an easy game, but it started my journey.”
After graduating from Long Island University, then CW Post, and earning an MBA from Harvard Business School, Dalio joined a brokerage house as a commodities director, then left to start his own company.
During their conversation, Westhoff asked Dalio why he chose to leave an established brokerage firm to strike out on his own.
“I was fired,” Dalio replied. “And that was one of the best things that happened to me … because then I could be on my own and do the things I wanted and make my own way.”
Principles of Leadership
Dalio founded Bridgewater Associates in 1975 and had early success. However, in the early 1980s, he made a controversial market miscalculation that resulted in huge losses for his clients and himself. In fact, Dalio was so broke that he had to borrow $4,000 from his father to pay his expenses. However, he learned a valuable lesson from this mistake.
“That was very, very painful … but it gave me the humility I needed to balance my courage,” Dalio said. “In other words, I started thinking, ‘How do I know I’m right?’
Dalio realized he needed to learn how to better manage risk when making investment decisions.
“I had to solve that puzzle,” he said. “And that changed my approach. So, for example, it made me radically open-minded. … I wanted to find the smartest people I could who would disagree with me to get their point across.”
One of Dalio’s signature principles, his creation of an “idea meritocracy,” a “system that brings together smart, independent thinkers and gets them to disagree productively to create the best collective thought possible,” permeates every aspect of his business. He even created a tool, Dot Collector, to allow for “radical honesty” during dating. Through radical honesty, Dalio believes the best ideas will inevitably emerge.
Dalio soon discovered every mistake he made and every puzzle he solved offered the possibility of a “reward,” a principle he could then apply.
After all, he likes to say, “Pain plus reflection equals progress.”
Dalio eventually compiled his collection of principles — 150 in all — into a New York Times bestseller, The Principles. The book details how Dalio went from a broke man to achieving business success and becoming one of the richest men in the world.
Dalio Philanthropies: A Family Affair
Another principle Dalio says he learned along the way is the importance of community in contributing to joy and happiness. Thanks to his son, Matt Dalio, he and his family have found this sense of community through their philanthropy.
It all started when Dalio and his wife, Barbara Dalio, sent Matt to study abroad in China at age 11. After returning home, Matt learned that his neighbors were trying to adopt a child from China and offered to help. Through the adoption process, Matt discovered that most Chinese orphans have special needs, many of them abandoned by parents who could not afford medical care.
Matt decided to start a foundation, China Care, “to offer orphaned children with special needs a brighter future.” He focused on providing life-saving surgeries and medical care. Later, he built a network of 50 China Care clubs across the country to raise money to help Chinese orphanages improve their care.
“That started our journey,” Dalio said simply.
Find your attraction
Together, Dalio, his wife and their children created a foundation, Dalio Philanthropies, to support their philanthropic priorities. Family members are encouraged to find causes that appeal to them personally. According to Dalio, this has led to a wide variety of causes and organizations that have gained the family’s support.
“For me, some of the most important [causes I support involve] justice in terms of equal opportunity because I got to live the American dream … but that’s not the case for so many people,” Dalio said.
One way the Dalio family aspires to create equal opportunity is through their work for students.
“My wife especially, but I really like to label, has her own way of helping the most disadvantaged students in high school, [helping] they graduate from high school and enter the workforce,” Dalio said.
A Dalio Philanthropies grantee, Connecticut Rise, has increased on-time graduation rates by 20%.
Meanwhile, to help expand access to health care in communities suffering from poor health, Dalio Philanthropies established the Dalio Center for Health Justice at New York Presbyterian Hospital. Dalio Philanthropies is also a founding member and supporter of Grameen America, an organization that just passed a milestone of investing $2 billion in microloans to over 137,000 women entrepreneurs since 2008.
“[Grameen America] take advantage of a great opportunity. Some of these [microloan recipients] have become excellent entrepreneurs,” said Dalio.
Another major area of Dalio Philanthropies’ giving is ocean exploration, a passion Dalio developed at an early age while scuba diving and watching episodes of The Underwater World of Jacques Cousteau. Now, through his OceanX initiative, Dalio supports modern-day Cousteaus exploring “unreachable” parts of the ocean aboard “the most advanced exploration vessel ever built.”
To educate others about ocean exploration, Dalio is currently developing a television series with acclaimed filmmaker James Cameron that showcases “the most inaccessible parts of the ocean on the most advanced exploration and media vessel ever built.”
Principles of Giving
When asked for his advice to young philanthropists, Dalio offered a simple principle of success, the same one that guides his family’s philanthropic work.
“It’s a journey. Make your work and your passion the same,” he said, “Make your philanthropy something you’re passionate about. You have the appeal.”Learn more about Doers to Donors and watch the full interview with Ray Dalio here. Subscribe to the Round Table YouTube channel to make sure you don’t miss future episodes.