• Login
  • Register
Nairametrics
  • Home
  • Exclusives
    • Financial Analysis
    • Corporate Stories
    • Interviews
    • Investigations
    • Metrics
    • Economy
    • Nairalytics
  • Markets
    • Currencies
    • Cryptos
    • Commodities
    • Equities
      • Company Results
      • Dividends
      • Stock Market
    • Fixed Income
    • Market Views
    • Securities
  • Sectors
    • Agriculture
    • Aviation
    • Company News
    • Consumer Goods
    • Corporate Updates
    • Corporate deals
    • Corporate Press Releases
    • Energy
    • Entertainment
    • Financial Services
    • Health
    • Hospitality & Travel
    • Manufacturing
    • Real Estate and Construction
    • Renewables & Sustainability
    • Tech News
  • Business News
    • Budget
    • Public Debt
    • Funds Management
    • Tax
  • Financial Literacy
    • Career tips
    • Personal Finance
  • Lifestyle
    • Billionaire Watch
    • Profiles
  • Opinions
    • Blurb
    • Op-Eds
    • Research Analysis
  • Recapitalization
    • Access Holdings Offer
    • Fidelity Bank Offer
    • GTCO Offer
    • Zenith Bank Offer
  • Home
  • Exclusives
    • Financial Analysis
    • Corporate Stories
    • Interviews
    • Investigations
    • Metrics
    • Economy
    • Nairalytics
  • Markets
    • Currencies
    • Cryptos
    • Commodities
    • Equities
      • Company Results
      • Dividends
      • Stock Market
    • Fixed Income
    • Market Views
    • Securities
  • Sectors
    • Agriculture
    • Aviation
    • Company News
    • Consumer Goods
    • Corporate Updates
    • Corporate deals
    • Corporate Press Releases
    • Energy
    • Entertainment
    • Financial Services
    • Health
    • Hospitality & Travel
    • Manufacturing
    • Real Estate and Construction
    • Renewables & Sustainability
    • Tech News
  • Business News
    • Budget
    • Public Debt
    • Funds Management
    • Tax
  • Financial Literacy
    • Career tips
    • Personal Finance
  • Lifestyle
    • Billionaire Watch
    • Profiles
  • Opinions
    • Blurb
    • Op-Eds
    • Research Analysis
  • Recapitalization
    • Access Holdings Offer
    • Fidelity Bank Offer
    • GTCO Offer
    • Zenith Bank Offer
Nairametrics
No Result
View All Result
Home Opinions Blurb

Nigeria could learn from Ray Dalio’s ‘How the Economic Machine Works’

Segun Olarinmoye by Segun Olarinmoye
March 14, 2019
in Blurb, Financial Literacy
Nigeria's GDP, Nigerian economy slips into recession as GDP contracts by 3.62% in Q3 2020
Share on FacebookShare on TwitterShare on Linkedin

When I read the book “Principles” by Ray Dalio, I immediately made a decision to adopt him as a virtual mentor. Ray Dalio is a 62 year old American investment guru who runs Bridgewater Associates, one of the biggest hedge fund managers in the world, with Asset Under Management (AUM) of $150 billion.

Recently, my mind was blown away after watching his YouTube video on “How the Economic Machine Works”.  I have decided to share with you some of the things I learnt.

Transactions are the building blocks of the economic machine

Buying and selling are essential

As you may well know, every transaction involves, at least, a buyer giving money (or credit) to a seller, and the seller giving a product, a service, or a financial asset to the buyer in exchange.

RelatedStories

Valentine's day business ideas

Businesses that will profit from today’s Valentine’s Day celebrations

February 14, 2023
How to grow your customer base, keep your business in demand (Part 1) 

How to grow your customer base, keep your business in demand (Part 1) 

October 10, 2022

Every economy is simpler than it seems

This shows that an economy is the sum total of all the transactions that make it up. For example, in every economy, you have the financial market, car market, oil market, fish market, bread market, real estate market etc. All these markets involve transactions that total what makes up an economy.

Therefore, whereas an economy may look complex, it is simply a makeup of more than a billion simple things working together, which makes it look more complex than it really is.

The bottom to top approach

To understand how an economy works, study it from the bottom up instead of studying it from the top down. This means start small and look at a single transaction first, because doing this will help you understand the economy much better.

In summary, have the following in mind when trying to understand an economy:

  • The total amount of spending drives the economy.
  • If you understanding transactions, you will be able to understand the economy.
  • An economy consists of all the transactions in all of its market.
  • All forces and all cycles in an economy are driven by transactions.
  • People, businesses, banks and Governments all engage in transactions.

The three (3) main forces that drive the economy:

There are three major forces that shape the economy. They are:

  • Productivity growth,
  • Short-term debt cycle, and
  • Long-term debt cycle

Productivity Growth

This is measured as a percentage of GDP and it grows over time as knowledge, technology, and innovations that help raise living standards.

An individual can improve productivity either by working harder or smarter. The productivity of a country is driven largely by how cost-effectively such a country can produce in relation to another country.

The following factors can influence the productivity of a country:

  • Cost of uneducated people,
  • Levels of bureaucracy,
  • Attitudes about work,
  • Raw materials cost,
  • Lending, and
  • Capital market efficiencies.

Short-term Debt Cycle (Business Cycle)

This usually lasts between 5-8 years and it arises from;

  1. The rate of growth in spending being faster than the rate of growth in the capacity to produce until
  2. The rate of growth is curtailed by tight money and credit, at which time a recession occurs.

Long-Term Debt Cycle

This arises from debts rising faster than incomes and money until this can’t continue. This is because debt service costs become excessive, typically because interest rates can’t be reduced any more.

He drops 3 rules of thumb which can work for individuals and policymakers of any economy

  • Do not allow debt to rise faster than income, because your debt will eventually crush you
  • Do not let income rise faster than productivity, because you will eventually become uncompetitive.
  • Also, do all you can to raise your productivity level.

In conclusion, Nigerian policymakers, economic planners, heads of companies, and even private individuals, can learn a thing or two from this on how to improve on our economy.

To watch Ray Dalio’s YouTube video on “How the Economic Machine Works”, simply follow the link below:


Follow us for Breaking News and Market Intelligence.
Tags: Bridgewater AssociatesHow the Economic Machine WorksOn the MoneyRay Dalio
Segun Olarinmoye

Segun Olarinmoye

Related Posts

Valentine's day business ideas
Financial Literacy

Businesses that will profit from today’s Valentine’s Day celebrations

February 14, 2023
How to grow your customer base, keep your business in demand (Part 1) 
Financial Literacy

How to grow your customer base, keep your business in demand (Part 1) 

October 10, 2022
From reading to vending: The story of Chike Nwafor who makes a decent living from peddling books 
Business

From reading to vending: The story of Chike Nwafor who makes a decent living from peddling books 

October 2, 2022
Interim Government: What’s the fuss about?
Business

Twitter ban lift: Experts point to Nigerian government as the biggest loser

January 16, 2022
Fortress purchases 4,500 bitcoin mining machines from Bitmain
Cryptos

Bitcoin on rampage, most powerful hedge fund manager says it’s a store of value

May 25, 2021
Ray Dalio
Cryptos

Bitcoin is most secure crypto – World’s biggest hedge fund

January 29, 2021
Next Post
Emirates Airlines, airport reopen, domestic flights, aviation, The nature of Nigeria's ban on Boeing 737 Max 8, FAAN commences renovations of Enugu Airport , Land dispute threatens reopening of Enugu Airport , Here is reason Turkish Airlines was allowed to land in Abuja, Aviation industry's 2019 GDP contribution hits N198 billion but 2020 will be worse

The nature of Nigeria's ban on Boeing 737 Max 8

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Emple
nlng
first bank








DUNS

Recent News

  • SEPLAT tops trading value as All-Share Index hits N80 trillion; ACCESSCORP leads volume 
  • President Trump issues 50-day ultimatum to Putin, threatens 100% tariffs over Ukraine war 
  • FG to establish National Design and Development Agency to support Nigerian innovators 

Follow us on social media:

Recent News

Weekly Stock Update: Nigerian Exchange Group record growth w-o-w, up by 0.48%

SEPLAT tops trading value as All-Share Index hits N80 trillion; ACCESSCORP leads volume 

July 14, 2025
President Trump issues 50-day ultimatum to Putin, threatens 100% tariffs over Ukraine war 

President Trump issues 50-day ultimatum to Putin, threatens 100% tariffs over Ukraine war 

July 14, 2025
  • iOS App
  • Android App
  • Contact Us
  • Home
  • Markets
  • Sectors
  • Economy
  • Business News
  • Financial Literacy
  • Disclaimer
  • Ads Disclaimer
  • Copyright Infringement

© 2025 Nairametrics

Welcome Back!

Login to your account below

Forgotten Password? Sign Up

Create New Account!

Fill the forms below to register

All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In
Social Media Auto Publish Powered By : XYZScripts.com
No Result
View All Result
  • Home
  • Exclusives
    • Financial Analysis
    • Corporate Stories
    • Interviews
    • Investigations
    • Metrics
    • Economy
    • Nairalytics
  • Markets
    • Currencies
    • Cryptos
    • Commodities
    • Equities
      • Company Results
      • Dividends
      • Stock Market
    • Fixed Income
    • Market Views
    • Securities
  • Sectors
    • Agriculture
    • Aviation
    • Company News
    • Consumer Goods
    • Corporate Updates
    • Corporate deals
    • Corporate Press Releases
    • Energy
    • Entertainment
    • Financial Services
    • Health
    • Hospitality & Travel
    • Manufacturing
    • Real Estate and Construction
    • Renewables & Sustainability
    • Tech News
  • Business News
    • Budget
    • Public Debt
    • Funds Management
    • Tax
  • Financial Literacy
    • Career tips
    • Personal Finance
  • Lifestyle
    • Billionaire Watch
    • Profiles
  • Opinions
    • Blurb
    • Op-Eds
    • Research Analysis
  • Recapitalization
    • Access Holdings Offer
    • Fidelity Bank Offer
    • GTCO Offer
    • Zenith Bank Offer
  • Login
  • Sign Up

© 2025 Nairametrics