The Power of Association:If you want to be rich, choose your friends carefully

2 Feb

When Kim and I were at the beginning of our financial journey, we knew that our friends who didn’t have money or who weren’t interested in money couldn’t help us on that journey. People who we had spent much time with in the past started to spend less time with us. Some of them are still our friends today, but not in the same way they were before we were rich. Some of them were jealous of our success and that caused friction. Those friendships naturally faded.

I have several friends who have made billions of dollars in their lifetime. Three of them have told me the same thing. Their friends who have made no money have never come to them to ask them how they did it. But they do come to them to ask for one of two things, or both: a loan or a job. I’ve found this to be true in my life as well.

As the old saying goes, “Birds of a feather flock together.” If you want to be rich, it’s important to be friends with the right people. Many people will find that, as they get richer, the friendships that they had before also change. If you’re rich, it’s harder to be friends with people who are adverse to money, business and investing. It’s simply a matter of different focuses in life.

While you can’t control your friends, you can control who you’re friends with. And if you want to be rich, it’s important to choose your friends carefully. The following are a few short tips on how to do so.

Choose friends based on what you can learn

Personally, I don’t choose my friends by their financial statements. I have friends who have taken a vow of poverty as well as friends who earn millions every year. At the end of the day, the way I choose my friends is by what I can learn from them.

There are certain people I’ve become friends with because they had money. I wasn’t after their money. However, I was after their knowledge. My friends who have money like to talk about money. They don’t brag about it, but they do like to discuss the subject of money: how to make it and how to keep it. I learn a lot from these friends.

Other friends, like my sister who is a Buddhist monk, have other things to teach me. I learn about spirituality and other things from them. But I never talk with them about money because they have nothing to teach me, and often, they are not teachable about money. Nevertheless, they are my friends because they have knowledge, and that is valuable.

If you want to be rich, be friends with people who have something to teach you.

Don’t be friends with Chicken Littles

I know people who will always try to talk me out of a deal. Many years ago, a man I know told me he was excited because he found a 6 percent certificate of deposit. I told him I earn 16 percent from the state government. The next day he sent me an article about why my investment was dangerous. I have received 16 percent for many years now. He still earns 6 percent. His fear holds him back, and if I listened to him, his fear would hold me back too.

Don’t listen to poor or frightened people. Being rich is as much about mindset as it is about knowledge. Poor and frightened people have a poor mindset and are always complaining about how the sky is falling. They are Chicken Littles who will always tell you what is wrong with your business or investment idea. They are motivation killers.

If you want to be rich, be friends with people who have the same mindset as you, or who at least won’t try to change your mindset to be more like theirs. Life is too short to spend time with people who don’t help you move forward. Rely on insider information If you want to be rich, it’s also important to be friends with people who can give you insider information. After all, whether we like to admit it or not, all trading is “insider trading.” Now, there are forms of insider trading that are illegal. Obviously you don’t want to break the law, but there are also forms of insider trading that are legal.

The reason you want to have rich friends is because that is where money is made—on information. You want to hear about the next big boom, get in, and get out before the next bust. The sooner you know good information, the better. You will not hear about good information from poor friends.

If you want to be rich, do the financially-intelligent thing and be friends with people who are rich and who have good information to share.

Who are your friends?



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