Sep 02, 2023

Our insights 

American businessman Dan Peña once said: “Show me your friends and I’ll show you your future”.

And he didn’t stop there.

“I know why the Kennedys and the Rockefellers and those people send their kids to those schools. Because there is a higher probability that if they were raised in a wealth creation, high-performance environment that it is going to rub off.”

It’s a frank appraisal of the influence our peers and friends have on us.

They help shape our values, celebrate our success and motivate us to achieve in ways we often don’t even appreciate.

But it can be a double-edged sword.

The upside

First, let’s remember there is a difference between peers and friends.

Peers tend to be people you associate with who share similar characteristics be it occupation, age, business and social circles.

Your friends are the people you choose to spend time with.

Both can have a positive influence on helping you grow your wealth.

Learning good habits

Peers and friends with similar financial goals will have strong ideals and act as a positive influence over your wealth creation journey.

They appreciate the value of saving money, investing wisely and spending carefully, encouraging you to adopt similar habits.

Networking opportunities

Grow your network by surrounding yourself with like-minded people who can introduce you to new contacts in the wealth creation sphere.

They may offer new investment opportunities, business ventures or even help drive your career forward.

They all open new doors to your fiscal ambitions.

Knowledge sharing

Like-minded peers can share unique insights about their money-making strategies.

It may be a stock to watch, a business opportunity to consider, a book to read or a blog to follow.

Learning from the successes and mistakes of your friends broadens your knowledge base, enhances your financial literacy and improves your ability to make good financial decisions.

Collaborative ventures

Trusted peers and associates can steer you towards collaborative business ventures, investment opportunities and partnerships that may not have otherwise presented themselves.

Sharing ideas can lead to a greater pool of knowledge and skill sets producing better outcomes for the benefit of all involved.

But tread carefully when doing so with friends. Getting into business with friends is fraught with danger.

Financial resilience and emotional support

The road to financial success is rarely smooth and there are likely to be many challenges and setbacks along the way.

Working closely with peers and friends allows you to support each other through the more difficult times, sharing the burden of failure.

It can also reduce stress levels, grow your resilience and help you plot your path to recovery.

The downside

This is where there tends to be an even greater distinction between dealing with peers and friends.

Keeping up with the Joneses

Unless you’re Elon Musk, there’s always someone with more money than you.

Keeping up with the Joneses who have more money than you can be an expensive and unsustainable game.

Young people find it especially difficult to opt out of their peers’ or friends’ activities they really can’t afford.

Trying to keep up with your richer friends will also negatively impact your ability to save and invest, sending you on a downward financial spiral that can leave you in debt.

If you can’t afford something, talk to your friends. They will understand. Your peers may move on without you.

Differing financial goals

Sometimes, your peers or friends might have different financial goals to you and may not appreciate or encourage your wealth creation plans.

They may challenge your financial decisions at an economic or even moral level.

If your peers or friends are of dubious character, you may be offered to partake in money-making schemes that are fraudulent.

When mixing with friends, business is sometimes best left out of the dinner table conversation.

Friends and business don’t mix

The old adage that friends and business or friends and money don’t mix is one many people have learned the hard way.

Lending money to friends is ill-advised, even when strict terms for repayment are drawn up.

Many friends have gone into business together but parted estranged after one party abused the trust in the relationship.

Separating work from play

Working in a business partnership with friends can be too much of a good thing that may ultimately damage the relationship.

Excessive socialising can lead to time management issues or a lack of focus on the task at hand and may also see capital misappropriated.

Forming business relationships with peers is preferable.

Get advice today

Peers and friends can have a great influence over your wealth creation activities.

The key is to ensure they are positive influences and that you don’t risk valuable friendships with failed business ventures or transactions.

It’s important to strike the right balance between leveraging the value of connections with your peers and friends without making poor decisions and suffering the consequences.

That’s where Calder Wealth Management can help.

CWM are wealth experts who can act as your financial mentor, running an impartial eye over all of your financial plans and decisions.

We’ll work with you to devise investment strategies whatever your financial goals.

No-one should do without quality financial advice from someone personally invested in their wealth accumulation.

At CWM, we pride ourselves on leading our clients into the future with structure, financial stability and confidence.

Contact us today to discuss all of your financial needs and concerns.

The information contained in this article is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from a financial adviser.

Taxation, legal and other matters referred to on this website are of a general nature only and are based on Calder Wealth Management’s interpretation of laws existing at the time and should not be relied upon in place of appropriate professional advice. Those laws may change from time to time.

Calder specialises in wealth management with a focus on advice, investment, sustainability, insurance and finance.