September 29, 2013

How The Economy Works According To The World’s Best Investor, And What It Means For You

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Ray Dalio is the biggest, and one of the most successful, investors in the world. He has been called the “Steve Jobs of investing.” He has also been likened to a cult leader, for creating a corporate culture that demands radical honesty of his employees, including the insistence on recording every single conversation had in the company and applying artificial intelligence to performance reviews.

However, the guy manages over $120 billion dollars, is looked to by central banks and world leaders as an oracle, and his top fund has posted 18% annual returns over the last 20 years. In other words, when this guy wants to teach us about how the economy works, we should listen.

Here, Dalio shares his understanding of the economy, human nature, and hints at how it allows him to be a successful investor in this simple, well-illustrated 30 minute video.

So what does it mean for your average 20-something? Well, according to Dalio, the last 5 years have been the start of a massive, once-in-a-lifetime “deleveraging.” The last one was the Great Depression. So, that is a bummer for us (though possibly more of a bummer for people hoping to retire right now.) The good news? Following Dalio’s cycle, things are looking up. And if you are as smart as him, maybe you can time it right and make $120 billion too.

image – Shutterstock

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