How to see the stuff others miss

One of the richest men in the world reckons that his success comes down to a single question. It’s a question he asks himself every day.
And it helps him see things that other people miss.

It’s a tiny habit we could all pass on to our kids.

The Big Bet

The man is Ray Dalio, founder of Bridgwater Associates which is widely considered to be the world's largest hedge fund.  

Back in the early 1980s, Dalio was one of the first to clock that a group of countries in South America had borrowed so much money from US banks that they were never going to be able to pay it back.

He predicated that they would default on their repayments and that this would have a domino effect and crash the US banking system.

People thought he was crazy. But then…Mexico defaulted.

Mexico couldn’t repay its debts. Dalio was hailed a genius.

He found his face on the cover of magazines and he was invited to Congress as an expert on the crisis. He was on top of the world.

But here’s the twist.

The Blind Spot

The US government stepped in to prop up their banks and stabilise the system — something Dalio hadn’t expected.

But he was on such a high about being right about the first part of the story that he kept betting on total economic collapse.

The world was moving in a different direction. But he stuck rigidly to his story. It was like he’d gone blind.

In the end, he lost so much money that he had to fire everyone that worked for him – and he had to borrow cash from his dad to cover household bills.

The Lesson That Changed Everything

Dalio says that this moment taught him the most valuable lesson of his life.

He realised he’d fallen into a thinking trap so common that psychologists have a name for it: belief perseverance. This describes the behaviour that is suprisingly common, of sticking to what we believe even when the evidence changes right in front of us.

Of course, we all like to think we wouldn’t do that. But history is full of smart people who did.

The Antidote

Dalio says the way out was one simple question. A question that helped him rebuild — and go on to create a fortune of over $15 billion.

It’s a question we — and our kids — can all learn to ask:  “What if I’m wrong?”

Strong opinions are common. Flexible minds are rare. Learning to ask that question may be one of the greatest advantages we can give our children.