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Wall Street JournalRay Dalio Once Had To Borrow $4,000 From His Dad To Make Ends Meet, But Says It Was 'The Best Thing That Ever Happened' To Him: Here's Why
Bridgewater Associates founder Ray Dalio recently recalled a moment that he says nearly wiped him out financially, but eventually made him a better investor and boss.
Debt Call Backfires, Forcing Painful Lifelong Lesson
Taking to X on Tuesday, Dalio wrote, "In 1979, I was so broke that I had to borrow $4,000 from my Dad to help take care of my family." He said he had "calculated that American banks had lent much more money to foreign countries than they would be able to pay back, and anticipated an imminent debt crisis," only to discover, "I couldn't have been more wrong."
"I didn't fully understand the impacts of quantitative easing, and so I lost money for myself and I lost money for my clients," Dalio added, calling the episode "the most painful experience I could imagine — but it was also the best thing that ever happened to me, because it taught me humility."
In the video clip attached to the post, Dalio tells Bloomberg's Francine Lacqua that his big call on a looming debt crisis in the late 1970s drew him onto "Wall Street Week" and before Congress, where he warned lawmakers the economy was "teetering on the brink of failure" and said with "absolute certainty" that markets could not return to stagflation. However, to his horror, the market instead bottomed and surged.
Humbling Collapse Reshapes Dalio's Investing Mindset Forever
Dalio has previously described the fallout as devastating. In a 2019 CNBC op-ed, he wrote, "Losing this bet was like a blow to my head with a baseball bat," saying he had to lay off nearly everyone at Bridgewater and was left as the firm's only employee. He called being "so publicly wrong… incredibly humbling" and said it "cost me just about everything I had built at Bridgewater."
Looking back, Dalio says that failure forced a mindset shift from "I'm right" to "How do I know I'm right?" and pushed him to seek out smart people who disagreed with him to "stress test" his thinking.
In the same CNBC essay, he told readers that similarly brutal setbacks are inevitable. "You'll experience this at some point in your life… You might think your life is ruined and there's no way to go forward. But it will pass," urging people to calm down, reflect and look for "the best path forward," even when it's not immediately visible.
Comeback Story Mirrors Other Wall Street Titans
Dalio has since built Bridgewater into one of the world's largest hedge funds and continues to warn about debt cycles, most recently cautioning that the U.K. risks a "debt death spiral" without deficit cuts.
His rebound from near-ruin echoes other Wall Street legends like Carl Icahn, whose fortune was hammered after a short-seller assault on Icahn Enterprises but who continues to rebuild and double down on core holdings.
Image via Shutterstock/ Digihelion
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