Truth Bomb Tuesday: The power of networks is actually astounding.
I have an argument with my marketing guys pretty regularly. At ILRE we have a range of systems and strategies that people can access. And they also have a powerful community that they can be part of.
Which one do you think is more important when it comes to achieving financial success?
If you said the systems, then you’re on the same page as my marketing guys.
But if you said the network, then you’re on the same page as a growing body of data.
Recently I learnt about a giant new study led by Raj Chetty at Harvard. It found that poor children who grew up in places where people have more friendships that cut across class lines earn a lot more as adults than children who don’t.
That is, one of the most powerful predictors of whether you rise out of poverty is how many of the people you know are well off.
And the size of the effect is astounding.
Cross-class friendships are a better predictor of upward mobility than
Wild.
And why?
Well, some people say it’s access to information and social networks. Rich people can connect you with rich jobs.
But that doesn’t explain the ‘dosage effect’.
The study found that kids who move into these economically diverse neighbourhoods at age 2 tend to do better than those who move in at 14.
Nobody is lining you up for an investment banking internship at age 2.
No, there’s something powerful that happens in networks.
There’s a large body of work in psychology that explores the way our friendships groups influence us.
If people in your friend network quit smoking, then you’re more likely to quit smoking.
If your friend gains weight, you are more likely to gain weight.
In fact, if you want something mind-blowing, research says that if one of your friend’s friends – who lives far away and who you have never met – gains weight, then you’re more likely to gain weight, too!
Our friends also shape how we see the world. When you hang out with people who have liberated themselves from the rat race, you start to believe that it is actually possible.
If everyone in your network is chained to the wheel, dreaming of retirement, you’ll inherit the belief that that is all that is possible.
You see financial security and freedom as something rare, like unicorn tears, rather than as something that happens to ordinary Australians every day.
And our friends also shape our desires. If you hang out with people who aspire to get the most out of life, that begins to shape your own desires.
Hanging out with hungry people makes you hungry.
And of course there’s shared expertise and access to experience and to joint venture partners with money and all of that. That’s awesome too.
But more and more, I see the heart of the value in ILRE is in the amazing community.
Systems can change your situation.
But people can change your story.
DB.