The Importance of Financial Friends

One of those manly hands is mine

As I sit down to write this, Mrs. Dollar and I have just finished getting the place ready for company. We’re having some friends over tonight for pizza and board games. But they are more than friends, really. They represent our “Mastermind Group.”

The group consists of two other couples, fairly young like ourselves, and all just getting started on their journey to freedom. We met at our real estate investing club and we’re all at different stages in our lives and relationships. Some are married, some are not. Some are planning for kids and some are still enjoying their youth. But the one thing that we all have in common is a shared desire to take control of our finances and put our money to work for us, instead of working for money.

Collaboration

Since we’re all landlords, it’s great to get together and swap stories. We can learn a lot from each other’s successes and challenges. When one couple finds a new tool or system to improve their business, they gladly share it with the others. When one couple has problems with their tenants or with maintenance, we can all benefit from their experience and apply the lessons to our own business. We can share reviews of vendors, compare bids between contractors and overall make more informed decisions than if we were by ourselves.

But this idea of sharing and learning extends beyond business. When you associate with growth-oriented people, you can learn a lot from each other about life in-general. Since the foundation of success is psychological, it’s important to surround yourself with people who are successful. You can only achieve what you believe you can, and being around people who believe gets you headed in the right direction.

Competition

Flickr photo by Max Klingensmith

Competition in capitalism spurs innovation. Would we have three (or four?) generations of iPods if the original iPod were the only music player on the market? What incentive would Apple have to improve it? With so many music players to choose from, Apple needs to continually improve their products to remain competitive and maintain their market share.

Similarly, competition within your circle of friends can make you stretch to reach your goals. As long as the competition remains friendly, it can be a really useful motivator for helping you achieve milestones: in business, fitness, finance or otherwise.

For competition to be successful, you should only try to compete with people who are “in your league.” And most importantly: don’t beat yourself up if you aren’t winning! The point is not to crush the competition, the point is to make progress towards your own goals.

Some people don’t do well with competition but in reality, the only person you need to beat is your past self. If you are making progress against that guy or gal, then you’re really winning, no matter how your friends are doing.

Commitment

When you are working towards a goal, having an “accountability partner” is a documented method for improving your chance of success. It turns out that disappointing ourselves is not nearly as heartbreaking as disappointing someone else. This effect is magnified when you have multiple accountability partners or a whole group of them! I know that when I chat with my mastermind group, they’re going to ask about our progress: “How’s the search for the next house? Have you made any offers?” Knowing that I’ll have to answer these questions, spurs me to take action.

Again, this works for any goal, no matter what it is!

  • Having a “gym buddy” makes you far less likely to skip out on your fitness
  • Keeping a public food diary or a little weight loss widget on your blog will motivate you to make better nutrition decisions
  • It’s far less common, but having a “money buddy” might be what you need to kick the spending habit or get out debt. My fellow blogger, Aloysa at MyBrokenCoin.com is using this tactic right now. You can see her progress to pay off her debt right on the sidebar of her blog.
Since money is sort of a taboo subject in our culture (at least in American culture), it might be harder to find a “money buddy” within your current circle of friends. In that case, you can always turn to the internet. The digital landscape is vast and full of people who are working on the same goals as you.
In fact, you can leave a comment on this post about your goal and I’ll personally bug you about it and make sure you work on it :)

Conclusion

Well, I wasn’t sure I would be able to keep the heading alliteration going but I pulled it off. :)

Having a group of like-minded friends can be a huge boost in your ability to achieve your goals, financial or not. And even if you don’t have any “financial friends” you can surely find plenty on the internet. The personal finance blog-o-sphere is full of people at various stages of financial success and there’s a community out there for you.

I’m not saying that you have to ditch your unsuccessful friends and find new ones. Far from it! But I wouldn’t take any advice from negative people, if I were you :)

How about y’all? Do you guys have a mastermind group or something similar? What have your experiences been and how has it helped you achieve your goals?

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19 Comments

  1. Posted February 6, 2012 at 8:15 am | Permalink

    I can only wish I’d been smart enough to do this when I was coming up. fortunately there have been two financially savvy friends in my life and I spent some time working in the investment biz.

    But money is a taboo subject, so we never shared specific details. seems this is less the case now, but for us old habits die hard.

    So, is Monopoly the favored board game at your gatherings? ;)
    jlcollinsnh recently posted..Go ahead, make my dayMy Profile

    • Dollar D
      Posted February 6, 2012 at 10:07 am | Permalink

      I think younger people are starting to talk about money more and more but it definitely depends upon your family background. In my family it was definitely taboo but I’m starting to change that. Money is too important not to discuss and learn from one-another.

      Funny enough, we’ve yet to play monopoly at these get-togethers although we do love Cashflow, the “rich dad, poor dad” boardgame. We bought it on eBay and it’s like monopoly on steroids.

      Other than that, we do play a lot of strategy games: Catan, Agricola, Acquire and Dominion are the top picks in our group.

  2. Posted February 6, 2012 at 2:56 pm | Permalink

    That’s a great idea. I don’t explicitly have a mastermind group. It would be nice to be a part of something like that. I talk to my brother about finance and he’s still learning so I’m showing him the rope mostly. It’s great to follow PF bloggers, there are many great practical ideas.
    retirebyforty recently posted..Frugal & Healthy Tip – Learn To CookMy Profile

    • Dollar D
      Posted February 6, 2012 at 3:00 pm | Permalink

      It’s great that you have someone to talk about finances with, even if it’s someone with less experience then you. That’s kind of you to share your experiences and mentor someone like that!
      The personal finance blog-o-sphere is full of great ideas for anyone willing to put in the time to read. No matter what stage of financial development you are in, there are tips and strategies for you.

  3. Posted February 6, 2012 at 10:49 pm | Permalink

    We don’t have a regular “money” group, but do rely on the counsel of some financially clever people.
    101 Centavos recently posted..Buying Uranium When It’s in the GutterMy Profile

    • Dollar D
      Posted February 7, 2012 at 9:23 am | Permalink

      It’s nice to have someone to talk to about financial matters. This group is unique to me in that they are all interested in that stuff :)

  4. Posted February 7, 2012 at 9:20 am | Permalink

    Sounds like you have a nice group of friends that help you out!
    Oren recently posted..Wall Street Journal – 26 Weeks for FreeMy Profile

    • Dollar D
      Posted February 7, 2012 at 9:24 am | Permalink

      Yeah, my wife and I are really lucky to have such great people in our lives. We would be friends with them even if they weren’t investors but it’s neat that we met at an investing club.

  5. Posted February 7, 2012 at 9:47 am | Permalink

    Its interesting, but when one has friends that don’t think of money, its really difficult to get them to talk about money. This is part of the reason why I started writing at Economically Humble — the blog puts me in contact with other financially savvy people. Maybe its time for me to see if anyone in my extended family network knows about finances and I can partner with them. Nice post… got me thinking.
    Economically Humble recently posted..Blog Report: January 2012My Profile

    • Dollar D
      Posted February 7, 2012 at 10:02 am | Permalink

      Most people are really sensitive about money, which I think is silly given how important it is and how much we can learn from each other. I’m glad that the internet has given us a place to connect with so many other like-minded people!

      • Mrs. Dollar
        Posted February 7, 2012 at 3:04 pm | Permalink

        I think money is a taboo subject mostly because people have a hard time not feeling jealous or like they are bragging, depending on the situation. What’s the saying? ….”eat your heart out”?

        Discussing these kinds of things with the wrong person can really turn ugly fast! I can literally see the shift in body language when the topic comes up. I personally am agreeable about discussions about money, I want to know other people’s ideas and what they do to keep their family on track. Imagine if everyone was so open and willing to share?

  6. Posted February 7, 2012 at 7:37 pm | Permalink

    My friends don’t know my financial situation. They also don’t know about my blog. :) I don’t think that they would understand me, why I am putting myself out there so openly talking about my flaws. :) PF bloggers know a lot more about me then some of my friends.
    Aloysa recently posted..When Your Server Forgets To Charge For Your MealsMy Profile

    • Dollar D
      Posted February 7, 2012 at 7:54 pm | Permalink

      Most of my friends don’t care about money and I’m fine with that but it’s nice to have a few who do.
      It’s brave of you to do what you do and I respect that.
      Plus, you’ve got the whole internet as your financial friend :)

  7. Posted February 18, 2012 at 11:23 pm | Permalink

    hey DD…

    I like this post so much I linked to it in my latest.

    Just FYI.

    Cheers,

    JC
    jlcollinsnh recently posted..The Casanova Kid, a Shit Knife, a Good Book, Having No Regrets, Dark Matter and a bit of MagicMy Profile

    • Dollar D
      Posted February 19, 2012 at 1:46 pm | Permalink

      Thanks, JC!

  8. Posted February 21, 2012 at 1:12 pm | Permalink

    I don’t have a mastermind group, but I do have quite a few friends with whom I will discuss small pieces of financial ideas. I think I’m starting to get one of my friends hooked on the idea of striving for financial independence as well! :) My parents have also been a good source of advice.

    It’s pretty awesome that you and your wife have each other and several other couples to discuss financial issues with.
    Leigh recently posted..Birth Control is ExpensiveMy Profile

    • Dollar D
      Posted February 21, 2012 at 1:14 pm | Permalink

      It’s great that you have a few friends to talk to!
      My wife and I feel pretty damn lucky to have so many friends we can “talk shop” with. It’s pretty motivational.

  9. Trish Rempen
    Posted February 22, 2012 at 10:29 pm | Permalink

    I had group like that once, but it was a business owners group, all of us in different fields, and we met regularly for lunch and a discussion of what was going on in our respective businesses.
    It was great. Surprising how clearly you can see things in a business when you have no vested interest in it!

    • Dollar D
      Posted February 23, 2012 at 9:18 am | Permalink

      That sounds awesome! I bet you learned a lot from each other.

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