Your income depends on whom you associate with

I have My parents always took a keen interest in our friends and I remember long lectures from my dad on the importance of choosing good friends. He maintained that who we associated with, would make or break us. To this end, he interrogated extensively (much to our embarrassment and trepidation) anyone you introduced as a friend.

Who were their parents, where did they live, where did their parents work etc... I guess if daddy had lived in our times he would request their bio data and academic transcripts. Now that I am older, I fully understand where he was coming from as it is very clear that “birds of a feather flock together”.

How many times have we seen someone we know join a particular group and change for the better or worse? We have heard statements like “Grace changed when she started hanging out with so and so.”

Sadly, typical of human nature, the stories we get to hear are mostly about people who changed for the worse, those who joined a wrong group. Needless to say there are some inspiring examples of people who changed friends and changed their destiny positively.

Income depends on your friends
A few years ago, I came upon a staggering statistic regarding friends; apparently data shows that we all earn within a 20 per cent band (+/-) of what our core inner circle makes in income.

At that time, I was taking financial literacy classes and reading every wealth creation book I could get my hands on. Every single book I read recommended the need to examine who you hang out with and who you take financial advice from.

All the books recommended that one seriously consider changing their friends if they wanted to see a quantum positive change in their income and wealth. This was disheartening for me as I do not make friends easily.
Actually 99 per cent of my inner circle are great friendships that date back about 25 years ago; girlfriends from school and university days. And yes, it was true we all earned within a 20 per cent band of each other’s salary and yes, we were a bunch of financial illiterates.
What clique do you keep?
I began to take a keen interest in cliques and friendships around me. The ladies who liked shopping tended to operate as a clique. Those who prioritise going on holiday were another clique.

Those who bought expensive jewellery were a clique; those who invested in expensive clothes were also a clique. The ones who obsessed about buying plots were a clique; those who took loans to invest in business were yet another clique. The gossips who knew everyone’s business were a clique.
The “savedees” were a clique. The one universal truth about all these cliques was that the members had comparable incomes. So, like a good friend, I shared my findings with my inner circle and jokingly told them that being a practicing Christian I would not “damp them for money” but I needed to associate with some financially literate, rich people so that all our incomes would go up. So, technically, I was getting “new friends” for their good.

Get financial mentors
To cut a long story short, I never managed to make new friends; I got a couple of financial mentors and the association with these mentors has changed my life for good.

I continue to be very circumspect about whom I hang out with and who is influencing my financial decisions. I de-emphasise friendships that influence me to make bad financial decisions and seek out company that encourages me to think smartly about money.

I encourage you to do an audit of your friends and the company you keep. Who you hang out with is the key to your financial future and it is never too late to change.
That said, always remember you can make new friends and keep the old ones if they are good for you.

The writer is Standard Chartered Bank’s head of financial markets in East Africa.