As you progress in your wealth building it might pay to be strategic about the kinds of people you want to associate with. The thinking here is that there appears to be a tendency for “birds of a feather to flock together”, that is people with similar inclinations tend to associate themselves with one another. This holds true for a lot of groups; professional trades, hobbyists, political activists, criminals, fat people, etc. Now, one of the sociological effects that you get from this sorting process is social capital. People are able to gain knowledge and access political, social and economic resources via their social networks.
But, the same principle holds true for people interested in building wealth. Lets say that you’ve managed to get your debts paid off and you have some investment capital to put down on a small to medium sized deal. How will you get access to the kinds of opportunities you want? How will you learn the process of investing or building a small business? One way is to get to know people who are doing the investments you want to do. If you’re able to make friends with people who are doing the kinds of deals you find interesting you can learn about the ins and outs of the process, as well as what mistakes to avoid, etc.
So, don’t be afraid to seek out and make friends with people who have achieved the kind of wealth you seek to amass. Do think about establishing mentorships and friendships with them.
Now, a question that comes up whether this approach is ethical. Many people often view this sort of strategic social capital development as overly Machiavellian.
There are two reasons why this kind of thinking isn’t helpful.
First, what is your goal? If you truly desire financial independence you will immediately see the need for taking the correct action to achieve your goal. Essentially if your priority is to pay off debt, become a millionaire, save for a house, etc. then you’ll do what you need to do. The point here is that you have to believe that discipline, focus and effort to achieve your goals has value in and of itself.
Interestingly enough, self made millionaires tend to have fewer mental hang-ups about getting rich. For example, lots of CEO’s are devotees of Ayn Rand, who preaches that effort and creativity should be rewarded (often to the exclusion of socially important altruistic values – but that is another issue). I think adopting a pro wealth mindset facilitates the process of wealth building. That is, if you believe you are deserving of money, you are more likely to do what you need to bring it into your life. So, the bottom line is that harmony between thought and action facilitate your getting ahead.
Second, don’t be false or insincere. There some few disturbed people who view others as objects. Don’t be like this. Don’t tell people something that isn’t true or make representations regarding your relationships with people that you know to be false. If you don’t like spending time with someone, don’t do it. Be up front and transparent about your goals and your objective. Do try to provide value to others or give them something in return for their helping or educating you.
So, the bottom line here is developing social capital can help supercharge your wealth building and, importantly, it can be done in an ethical manner.
James Hendrickson
James Hendrickson is an internet entrepreneur, blogging junky, hunter and personal finance geek. When he’s not lurking in coffee shops in Portland, Oregon, you’ll find him in the Pacific Northwest’s great outdoors. James has a masters degree in Sociology from the University of Maryland at College Park and a Bachelors degree on Sociology from Earlham College. He loves individual stocks, bonds and precious metals.
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