Are you only as rich as your 5 closest friends?
“Dis-moi qui tu fréquentes, je te dirai qui tu es”, a French proverb meaning “A man is known by the company he keeps.” In contemporary times, Arel Moodie, author and motivational speaker, swears by the average of 5, a concept suggesting that an individual will become the average of the five people with whom he or she spends the most time.
In fact, this theory (minus the exact label) guided my own upbringing. My parents, like most others, were convinced that my friends could and would greatly influence my behaviour, and therefore my future success. If I were to hang out with drug addicts, most likely I would become one myself. Or, in a best case scenario experiment with some drugs enough to affect my grades and my ability to deliver healthy grandchildren. But, if I spent my days surrounded by A-students who focused on school and set high goals for themselves, chances are I would also be inclined to push myself and discover my full potential. It’s the idea that the behaviour you are exposed to the most often becomes the baseline for your own personal normal.
While I do agree that the theory is valid, I am not certain that it applies to personal finance. I am financially stable; however, many of my friends and some family members struggle with severe financial troubles: hefty debt, insufficient income to support their lifestyle, extensive student loans, unlucky investments gone awry – the list goes on. One of my closest friends has thousands of credit card debt and is a self-proclaimed shopaholic who indulges in retail therapy. Does this then translate into me accumulating credit card debt and having the same attitude towards spending? No.
I think that when it comes to a person’s attitude towards money, parental influence holds more clout. The financial habits you were exposed to by your parents inevitably influence your own. Did your parents squirrel away every penny for an unplanned catastrophe? Or did they seize the day and seek instant gratification? Maybe you became the opposite of your parents, but it was their behaviour that leveraged the change.
I do however believe that the company you keep can affect your earning potential. By impacting aspects of your personality – such as drive, confidence and perseverance - your friends influence the route you will take to gain success. My conclusion: You are likely only as successful as your five closest friends nurtured you to be. My suggestion: Don’t wait on your friends. Take responsibility for your own success.
Do your friends influence your financial habits? And if they do influence your own success so strongly, should you get new friends if you haven’t yet made your fortune?