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Rich friends, poor friends

Rich friends

Surrounding yourself with rich friends is a well-known strategy for making more money.

By spending time with rich friends, you will automatically:

  • See having lots of money as normal
  • Get over your negative money beliefs
  • Think positively about growing your finances
  • Try harder to improve your lot
  • Copy what your rich friends do to get richer

In my 20s, I read through a taller stack of books about making money than the average young man’s pile of pornography. And nearly all those books urged readers to abandon friends who had a ‘poverty mindset’.

Instead, you should look for rich friends who are going places.

True, maverick self-made millionaires such as Richard Branson, Duncan Bannatyne, and Theo Paphitis don’t seem to need peers as role models.

But for you and me, moving in wealthier circles will raise our expectations – and boost our bank balance.

Big fish, small pond

There’s one snag with this strategy. I’ll illustrate it via a slightly stylized story about an ex-girlfriend.

My ex – let’s call her Catherine – is a talented violin player. From the age of seven, she showed great promise with the instrument, and by her early teens she was established as the best bow in town.

Catherine enjoyed being the lead violinist in her school orchestra. But she knew she could push her talent further than her school could take her. Most of her friends might as well as have been banging on saucepans for all they could inspire her.

Catherine’s teacher agreed she was being held back. He arranged for her to go to weekend classes in London at a fairly prestigious music school.

At last she’d be among musicians of her own caliber!

To cut a long story short, they were indeed better than her – and she didn’t like it one bit. No longer was Catherine the biggest fish in a small pond. In fact, by her own estimation she was the worst musician at the new school.

Catherine continued to attend the classes, because she was too ashamed to retreat to her old school colleagues. But she admits that her heart wasn’t in it. When she went to university, she didn’t even bother to join the music society.

Could Catherine have tried harder? Perhaps. Many people respond to competition, but some are too timid. A shy person, Catherine wilted in the comparison.

Yet the fact is she can play beautifully compared to 99% of people who ever pick up a violin.

Rich friends when you need them

If Catherine had never gone to the elite music classes, she’d probably have had a happier childhood. She might still be playing her violin today.

Similarly, you will make more money if you meet rich friends, but you’ll likely feel miserable.

The only solution is to decide who your real friends are – as distinct from who is in your wealth creation circle.

Spend quality time with your true friends for a pick-me-up, and hang out with your rich friends when you see your income sliding!

Contrived? Perhaps. It’s not easy being rich.

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{ 12 comments… add one }
  • 1 JoeTaxpayer May 21, 2010, 2:10 pm

    Interesting thought. From a challenge perspective, I agree. To become better at anything you need to learn from those better than you. Hanging with a ‘millionaire next door’ is going to be an ongoing learning experience. But, if you find yourself in the company of a jet-setter, you may fall into a ‘keeping up with jonese’ mentality. I’m sure that’s not what you were referring to.

  • 2 Financial Samurai May 21, 2010, 2:25 pm

    Rich friends, not acquaintances make me feel good, not miserable. There’s a difference here. If you feel good you are surround by poor people, then you/one has a complex or low self esteem, and vice versa.

    I don’t think I purposefully surround myself with rich or poor people. It’s just what happens.

    The beauty of sports is that we focus on the gifts of the player, not of their backgrounds. Everybody should play some sports!

    Sam
    .-= Financial Samurai on: The Emergency Fund Fallacy =-.

  • 3 The Investor May 21, 2010, 2:47 pm

    Hi guys – I trimmed my original post (I’m sensing readers can only read so many 1,000 word articles in week! 😉 ) but originally I cited scientific evidence that you’re made unhappier when your friends/peers are richer than you. Obviously everyone is unique, so maybe that’s not you Sam, but it’s pretty much a fact for the population as a whole. It’s all to do with deep and primitive ways in which we establish our ranking in the ‘tribe’.

    Thanks for stopping by!

  • 4 Arohan May 21, 2010, 5:42 pm

    It is not easy to design or construct your social structures in this manner as these are two way relationships. These only work if your outlook and aspirations match the networks you are trying to be part of. But then, you already know what you want and are actively working to attain your goals, so the battle is already half won.
    .-= Arohan on: How Does a Fixed Annuity Work? =-.

  • 5 FinEngr May 21, 2010, 7:42 pm

    Is this the same scientist ex? She sure was talented….

    Instead of the rich/poor comparison (since those levels can vary considerably) its about surrounding yourself with like-minded friends.

    Quick example – they could think its necessary to purchase a big home. If that doesn’t ring with your own beliefs, you won’t be happy either way whether they’re rich or poor.
    .-= FinEngr on: Don’t Buy Your Next Car Before Checking Out These Sites =-.

  • 6 Budgeting in the Fun Stuff May 21, 2010, 10:27 pm

    Based on the beginning of the article, this is not where I thought you’d end up. This is way better than what I thought you were saying. I pick my friends based on three important criteria:

    1. Do I make them laugh?
    2. Do they make me laugh?
    3. Are we laughing at each other or with each other?

  • 7 Forest May 22, 2010, 8:39 am

    The demographics of a friend never come into play and I don’t speak cash that much….. but I am not rich either so who knows.

    Anwyay I never contrive a friendship :).

    Surely hanging out with rich friends would just make you spend all your hard earned cash keeping up with them!
    .-= Forest on: A Pledge To Never Take Credit Again! =-.

  • 8 The Investor May 25, 2010, 9:25 am

    @Forest – It’s pretty much impossible to keep spending like truly rich friends. It’s just odd to hang about with someone your own age of a similar background who earned £1 million last year. It’s more the psychological impact of that which makes hanging around with rich people bad for your morale even if it makes you want to try harder to keep up with them. Everything thinks they’re immune to this sort of thing (I certainly like to think so!) but most of us aren’t.

    Thanks for your comments everyone, I’ll follow this up with a new post soon putting a bit more flesh on the ‘peer comparison’ issue.

  • 9 Jake September 20, 2011, 8:25 pm

    Errr what? I have a rich friend and I dont think it is “normal” nor does it make me feel miserable. It makes me feel really lucky that I am friends with this person, and, I like her for who she is. I could care less about the fact that she is rich.

  • 10 Lawrence August 13, 2012, 5:18 am

    The benefits depend very much on what type of rich people you are spending time with. I grew up with a lot of wealthy families and they may be in the know when it comes to investment opportunities, but in my experience they don’t have anything to offer if you are trying to make money from scratch. You have probably heard of families going from rags to rags in 3 generations (I’ve heard it called the “Rags to Rags” rule and the “3 generation rule” but I don’t know if there is an official term for it). The first generation works it’s ass off to make money, the second generation maintains the money but doesn’t add to it and the third generation squanders the money and ends up poor again. Well when you reach a certain amount of money it becomes very hard for that third generation to waste ALL the families money. The kids I went to school with are in their late 20s and early 30s, have never worked a day in their lives and despite the sports cars and international trips they can’t spend the money faster than the investment firms (their hard working grandparents hired) can make it. They don’t have any advice on how to make, save or invest money themselves, though I’m sure their investment managers would have some advice for a price.

  • 11 Oriaran Peter July 13, 2013, 6:39 am

    Some rich people are down to earth and ready to carry you along while the other category are filled with pride and xenophobic thereby seeing any move you make in getting close as a big threat.

  • 12 REBECCA July 14, 2018, 4:43 pm

    I have a lot of rich friends because of my education.But now I realise I must drop them for my own sanity.They patronise me terribly, and don’t really have a clue about how it feels to be poor..
    Who needs it?

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