Ray Dalio recommends planning for basics.
“Identifying your basic needs and ensuring they’re covered is key to a happy life,” he said.
The founder of Bridgewater Associates, the world’s largest hedge fund, spoke recently on “Tom Bilyeu’s Impact Theory” in an episode released shortly. Dalio is worth just over $16 billion, per the Bloomberg Billionaires Index.
Ray Dalio says that people should calculate their fundamental needs and set aside enough cash to cover them, which he believes is key to solving money troubles.
Dalio said he’s “seeing many people going broke, and he believes these people could benefit from figuring out what they need in life and build their budgets around those things.
“Identifying your basic needs and ensuring they’re covered is key to a happy life”
RAY DALIO
Billionaire Ray Dalio recommends planning for basics as he sees a dangerous trio of debt, political strife, and an overseas war, said Ray Dalio
He advised people to analyze their incomes, expenses, and savings, then do a stress test by calculating how many months or years they could afford an acceptable lifestyle if their income was cut or went to zero and they had to rely on savings.
Ray Dalio, the founder of Bridgewater Associates, who started his fund from a two-bedroom flat said many people have lost touch with what’s essential to life, such as a bed, food, and basic healthcare.
“I think we visualize too much the things that we’re used to,” Dalio said. Focusing on the basics instead can relieve stress and lead to a “happy life.”
“It’s the ambiguity, it’s the worry, it’s the stress,” he said. “So if you do that from the beginning, and you have that played out in your head, then you know everything from there you can play with, and it’s your icing on the cake. Once you’ve got safe, everything beyond that is luxury,” he said.
Households, particularly low-income, have been hit hard by soaring prices for food, fuel, housing, and other basics.
“I think we visualize too much the things that we’re used to”
RAY DALIO
The cost of servicing debt has also weighed heavily, with many seeing monthly payments on their credit cards, car loans, mortgages, and other debts soar.
Elevated inflation and interest rates have made the economy a key concern for businesses and households.
“We’re going to have financial and economic problems at the same time as we have this internal fighting and this, an external risky situation” – Ray Dalio
Restructuring of the economy and debts could be ahead, so Ray Dalio recommends planning for basics
The incoming Trump administration proposes to appoint Elon Musk as the Secretary of Cost-Cutting with two trillion dollars in budget cuts.
Austerity and tens of thousands of public sector workers losing their jobs could be ahead.
Ray Dalio hopes the incoming Trump administration restructures the economy, increasing the size of the pie, as well as dividing the pie well.”
Failing to unite the country could result in revolution and subpar management, which Dalio deemed the “greatest risk” from a political standpoint.
So Ray Dalio is waving the red flag over the potential financial and economic fallout from the US government’s mushrooming debt pile. Moreover, the internal conflict is fueled by a massive wealth gap, and mounting challenges to America’s global dominance from China and Russia.
“We’re going to have financial and economic problems at the same time as we have this internal fighting and this, an external risky situation,” Ray Dalio added.
