When you’re new to investing, retirement terminology can read like jargon to memorize instead of concepts to understand and apply. Well, as usual, there’s a video for that, or at least the economic component.
Ray Dalio is a billionaire who founded Bridgewater out of his home in his twenties and has since built it into the largest hedge fund in the world. It’s therefore conceivable he knows a thing or two about investing. A few years ago, Dalio released a video called “How the Economic Machine Works,” which, for anyone like me who wasn’t exactly an econ genius in college, lays out his theories on how markets move: in up and down cycles, basically, based on a handful of key determinants.
Why do I find this video valuable when it doesn’t actually talk about retirement investing? Here are three reasons:
1. It’s not a dumb sh*t 5-minute clip from Bank of America on how to open a credit card. It’s a meaty yet highly accessible 30-minute conceptual take on how important things work, like money and the government and the economic markets. It’s not marketing material; Dalio doesn’t need or want your business. And I don’t know about you, but I definitely don’t watch enough nicely illustrated cartoons.
2. It equips you to draw out important lessons for yourself on investing, especially when it comes to credit. As an economic thinker, Dalio takes a distinctive path from others in separating money from credit, one of the key reasons that his theory is so powerful. The movement of credit, you’ll see, determines when we have our crashes (and for how long) and bull markets. Think about that the next time you consider moving on credit opportunities like taking out a loan for more than you need or racking up ugly credit card debt.
3. It’s one very successful person’s take on the nuts and bolts behind economic markets, and it’s delivered in a tight visual package you can digest while you’re, say, cooking dinner or plodding on the treadmill. If you’re seriously worried about your financial future and interested in educating yourself, this is a super low cost opportunity to do that and thereby add Dalio’s far from basic take on economics to your melting pot of ideas.
In short, maybe you’ve taken some econ courses or maybe you haven’t, but either way, you can likely get a new perspective on how to manage your retirement investments from this video.
If you like the video and want to learn more about Dalio (who happens to be the narrator) and Bridgewater, he’s offered more media on his economic principles here. You can learn more about Dalio’s thinking on life and management through his other principles.
Did you learn something from the video? Did you hate every second of it? Leave a comment and tell me why!