Ray Dalio facts for kids
Quick facts for kids
Ray Dalio
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Raymond Thomas Dalio
August 8, 1949 New York City, U.S.
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| Education | Long Island University, Post (BS) Harvard University (MBA) |
| Occupation | Hedge fund manager |
| Known for | Founder of Bridgewater Associates |
| Spouse(s) | Barbara Dalio |
| Children | 4 sons, including Paul |
Raymond Thomas Dalio (born August 8, 1949) is an American investor and hedge fund manager. He is famous for starting Bridgewater Associates, which became one of the world's largest hedge funds. He has been a co-chief investment officer there since 1985. Dalio started Bridgewater in New York in 1975.
He was born in New York City. He studied at Long Island University and later earned a business degree from Harvard Business School in 1973. Just two years later, he launched Bridgewater.
In 2013, Bridgewater was named the biggest hedge fund globally. In 2020, Bloomberg said he was the 79th richest person in the world. Dalio also wrote a popular book in 2017 called Principles: Life & Work. This book shares his ideas on how to manage companies and invest money. It even made it onto The New York Times bestseller list.
As of December 2024, Ray Dalio is ranked #124 on Forbes' Richest People in the World. His net worth is about $15.4 billion.
Contents
Ray Dalio's Early Life and First Investments
Ray Dalio grew up in Jackson Heights, Queens, New York City. When he was 8, his family moved to Manhasset, New York. His father was a jazz musician who played clarinet and saxophone. His mother was a homemaker. As a child, Ray had many small jobs like mowing lawns and delivering newspapers.
When he was 12, he started working as a caddy at a golf club. He carried golf clubs for many people who worked on Wall Street. One of them, George Leib, and his family invited Ray to dinners. Later, Leib's son gave Ray a summer job at his trading company.
Ray started investing at age 12. He bought shares of Northeast Airlines for $300. He made three times his money when the airline merged with another company. By the time he was in high school, he had already saved several thousand dollars from his investments. He earned a degree in finance from Long Island University. He then got his business degree from Harvard Business School in 1973.
Building a Big Investment Company
After finishing Harvard, Dalio began trading futures (agreements to buy or sell something at a future date). He worked for different financial firms. His job was to help farmers and ranchers manage their risks using these futures.
Starting Bridgewater Associates
In 1975, Ray Dalio started his own company, Bridgewater Associates. At first, it was a company that gave financial advice. Many of its first clients came from his previous job. Dalio mainly advised on currencies and interest rates. The company also published a report called Daily Observations about global market trends.
A big moment for Bridgewater was when McDonald's became a client. After that, the company grew quickly. Larger clients, like the pension funds for the World Bank and Eastman Kodak, joined. In 1981, Bridgewater opened an office in Westport, Connecticut.
Ray Dalio became well-known after making money during the 1987 stock market crash. The next year, he even appeared on Oprah Winfrey Show. In 1991, he launched Bridgewater's main investment plan, "Pure Alpha." This plan aimed to earn more money than the general market. In 1996, he started "All Weather," a fund that used a steady, low-risk way of investing. This method later became known as risk parity.
Becoming a Top Investor
Bridgewater Associates became the world's largest hedge fund in 2005. From 1991 to 2005, it only lost money in three years, and never more than 4%. During the same time, the S&P 500 stock index also had three losing years, including a big drop of 22.1% in 2002.
By 2005, Dalio was managing money for very large groups. These included the California Public Employees' Retirement System (CalPERS) and the pension fund for United Technologies Corp. In 2007, Bridgewater predicted the 2007–2008 financial crisis. In 2008, Dalio wrote an essay called "How the Economic Machine Works." It explained how economies function.
In 2007, a magazine called Barron's said that "nobody was better prepared for the global market crash" than Bridgewater's clients. The company had warned about too much debt in early 2007. Bridgewater's Pure Alpha fund avoided much of the 2008 stock market crash. In 2008, the fund grew by 9.5% after fees. Dalio did this by expecting the government to print a lot of money to help the economy. He invested in government bonds, bet against the dollar, and bought gold.
In 2011, Dalio published a book called Principles. It shared his ideas on investing and managing companies. In 2012, he was named one of the 100 most influential people in the world by Time magazine. He was also listed as one of the "50 Most Influential" people by Bloomberg Markets.
As of October 2017, Bridgewater Associates managed $160 billion in assets under management. Dalio has said he is a "hyperrealist." This means he wants to understand how the world truly works without adding his own opinions.
Ray Dalio's Ideas About Investing
Ray Dalio calls Bridgewater Associates a "global macro firm." This means they invest based on big economic trends. These trends include changes in money exchange rates, inflation, and how much a country's economy grows (GDP).
Dalio divides his investments into two types:
- Beta investments: These make money by simply following the market.
- Alpha investments: These are actively managed to try and earn more money than the market. They are not tied to how the general market is doing.
Dalio's goal is to create investment portfolios that make money in different ways. He focuses on how much risk each investment adds, rather than just what type of asset it is. His hedge fund mostly works with large organizations like pension funds and central banks. It is rare for private investors to put money into Dalio's funds.
Dalio's strategy mainly focuses on currency and bond markets. This is different from investors like Warren Buffett, who buy shares in individual companies. Dalio also made the risk parity approach popular. This method helps manage risk and spread out investments within Bridgewater Associates.
Dalio's investment strategy uses a target level for risk. He then uses financial tools to spread out the risk evenly across different types of assets. This is different from first deciding where to put money and then seeing what the risk is. Dalio's exact investment plans are mostly kept secret. Only a few people within his company know all the details of how it trades.
What Ray Dalio Thinks About the World
Capitalism
Ray Dalio believes that capitalism is generally the best economic system. However, he also thinks it needs to change because it "is not working well for most Americans." In 2019, he said that the difference between rich and poor people in the United States was a serious problem. He called for changes to fix this wealth inequality.
In 2020, he said that capitalism should be improved, not given up. He noted that average people have not seen much income growth in the last 20 years. He also pointed out that the gap between the rich and the poor is the widest it has been since the 1930s. Dalio warned that it is becoming harder for people with low wages to become wealthy. He believes that a better capitalism would create more wealth and share it more fairly.
China
In October 2020, Dalio advised people to pay attention to China's growth. He said China has become a global superpower in "exceptional ways." He noted its strong economy, low COVID-19 cases, and being a major center for new company listings.
Dalio recalled visiting China in 1984 when officials were amazed by simple calculators. He believes China is now equal to the U.S. in advanced technology and may even take the lead soon. He also sees China as a good place for investors. He said China's economy is strong and its investments are reasonably priced. Dalio thinks that China's stocks and bonds are currently undervalued in global portfolios.
While he acknowledged that things can always go wrong, Dalio believes China's path of economic reform will continue. He has also compared the Chinese government to a "strict parent," which has drawn some criticism. In August 2022, Ray Dalio's Bridgewater firm sold almost all its Chinese stocks. This included companies like Alibaba and JD.com.
His Personal Life and Giving Back
Ray Dalio lives with his wife, Barbara, in Greenwich, Connecticut. They have four sons. Sadly, their oldest son, Devon, passed away in 2020 at age 42. Their second son, Paul Dalio (born 1979), is a film director.
Ray Dalio has had a health condition called gastroesophageal reflux disease (GERD).
Wealth
In 2014, he reportedly earned $1.1 billion from his firm's fees and other payments. In 2015, Forbes estimated his net worth at $15.4 billion. This made him the second-richest hedge fund manager at the time. In March 2019, Forbes named Dalio one of the highest-earning hedge fund managers.
As of January 2022, Forbes estimated his net worth at $20 billion. This placed him 88th on their billionaires list.
Giving Back
The Dalio family has given more than $5 billion to their Dalio Foundation. The foundation has given out over $1 billion in donations. In April 2011, Ray and his wife joined the Giving Pledge. This means they promised to donate more than half of their wealth to charity during their lifetime.
The Dalio Foundation has supported many causes. In February 2020, it gave $10 million to help China with its coronavirus recovery. In March 2020, it gave $4 million to Connecticut for healthcare and food. In October 2020, a new health center was launched with a $50 million gift from the Dalio Foundation.
The foundation also supports groups like Fund for Teachers and the David Lynch Foundation. Ray Dalio's research yacht and submarine have even appeared on the Discovery Channel during Shark Week. They have been used to search for a giant squid. In 2018, the Dalio family and Bloomberg Philanthropies promised $185 million to help protect the oceans. In 2019, he pledged $100 million to public schools in Connecticut.
Hobbies
Ray Dalio practices Transcendental Meditation. He loves being outdoors, especially hunting and fishing. He enjoys bow-hunting and has hunted animals like cape buffalo and elk.
Books by Ray Dalio
- How the Economic Machine Works; A Template for Understanding What is Happening Now was his first book, published in 2007.
- Principles: Life & Work is his second book, published in 2017. It was a #1 bestseller on New York Times and Amazon.
- Principles for Navigating Big Debt Crises was his third book, published in 2018.
- The Changing World Order: Why Nations Succeed and Fail was published in 2021.
