Regardless of our niche (if applicable), we’ve all heard the mantra, “your network is your net worth.” Don’t get me wrong; I think there’s clearly something to it. In fact, this recluse is stepping into 2019 with the resolution to meet many people and expand my network exponentially. So it may be easy to dismiss this blog’s title as wishful thinking, and no doubt that’s a factor. 🙂 But allow me to make my case—which, you will see, is relevant to everyone:
The cliché’s premise is founded on:
- a) The idea that people in our circle end up influencing us without us really knowing, since most of our actions come from mimicking others over time (that’s how we learned to walk and talk to begin with). Therefore, those who we’re around most often will end up passing on their mentalities. As any well-informed Millennial knows, wealth and prestige these days generally come from your approach to money, not from ‘what you do.’
- b) The notion that more is better: there’s no denying it: these days it’s all about who you know. So obviously, the more connections you have, the more tools you have to make things happen. This is especially true for entrepreneurs and investors, who (again) are the primary wealth-builders in the Information Age.
While I agree on principle, there’s also an underbelly here. The simple ‘network=net worth’ equation implies that you’re always better off adding to your network as fast as you can—regardless of who you’re adding to it. Therefore, if (hypothetically) Bill Gates were a loner, he would be much worse off than a social, gregarious drunk who knows all 172 people in his tent neighborhood in Downtown LA.
This may be an extreme example, but I’ve recently been thinking: many of the groundbreaking researchers, scientists, inventors, and philosophers have been recluses—and they just might have been better off this way. Why? Because they didn’t have buddies to keep their ‘feet on the ground.’
To be fair, having such people around is often a good thing. In fact, many of these isolated personalities end up breaking with reality and turning schizophrenic. They lacked healthy reality checks. But the flip side? ‘Reality checks’ can just as easily bring you down (hence the term ‘feet on the ground.’)
Just think: when a group of guy friends gets together to pick up girls at the club, are they really there to help each other succeed? Only the most naïve would say yes. While being in a group benefits them all, they’re all there for their own dicks, and thus competing with one another. If one of them goes for a girl supposedly out of his league, the ‘friends’ are likely to razz him about it, tell him to “dream on” and the like. In turn, he’s supposed to laugh along and ‘take the joke’, which is like paying his dues to stay part of the group.
Of course it’s masked with smiles, laughs, and drinks, but the core objective is still there: to prevent the guy from getting more pussy than them. This brings to mind the proverbial analogy of crabs in a trap: if one crab is stuck in a cage, it can easily climb out. If a group is trapped, none of them will escape, since they’ll all stop each other. I experienced this first-hand in my ex-fraternity.
A few recent experiences have given me a new insight. I was chatting with a ‘friend/confidante’ about future plans, and I nonchalantly said I planned to have rental properties down the road. He wistfully shook his head and sweetly said, “Well that would be nice. You should dream big.” He said this in a kind, encouraging way. And this guy is supposedly an avid reader of Kiyosaki…WTF?!?
In reality, my goals are much greater than this, and I view rental properties as a backup. Also, having studied the topic for years, I happen to know that obtaining a ‘starter’ property is a simple straight-forward process, as long as you apply the correct formulas. To call these simple linear procedures a ‘big dream’ is to negate them. (And I guess it also means that the many hours I’ve dedicated to Real Estate Investment books and meetings are not logic-based, but starry-eyed-dream-based. Shucks, if I had known that, I would’ve just spent last December writing to Santa Claus!!)
In a similar conversation, I might run into an adversary (similar to Foster in my novel Reality Bytes), who scoffs at me and says, “Yeah right. Dream on!” I would respect this guy more than the one I quoted above. Both are making the same statement, but the first one was too cowardly to admit it. This is how people maintain the security and support of social networks—they have to act like supporters while ensuring their friends do not succeed to the point of not needing them. The ‘fist in a velvet glove’ technique is super-effective at this.
Others may not have a malicious intent in the world, but still have the same effect. For example, there’s a former co-worker who I used to pick up at work and drive home (he would give me ten bucks in exchange for not having to take the bus). Despite our language barriers, he was a very warm and friendly ‘buddy’, always acting upbeat and supporting everything I said (usually without even knowing what it meant).
He’d always known I had written a novel (I completed Reality Bytes before I met him in 2014), and we had frequently chatted about it. When I finally showed him a hard copy (just a few months ago), he got overwhelmed and cried in my car. Yes, cried. Keep in mind: he couldn’t read a word of it. He just couldn’t believe I had actually typed that many words. And then he shook his head and forlornly asked me not to forget him when I make a bunch of money.
If you’re reading this and saying “awwwwww,” then you’re wired very differently from myself. Whatever…to each his own. The point I’m making is that he still revealed two things:
- a) His projected image of ‘contented self-respecting man who takes pride in his work’ is 100% phony. Otherwise, he wouldn’t have placed me on that pedestal.
- b) While he may have paid lip-service to my accomplishment before, it never really sank in…he still saw me as someone with intellectual abilities no greater than his own, and thus writing an actual book was equivalent to ‘big dream’ (regardless of whether I sold a single copy).
As I’m starting to see, this is a natural phenomenon–people look at their co-workers or others in similar shoes to themselves, then make the assumption that those people are at the same ‘level’ as everyone else in the group (or lower). This explains why, in my years of job-hopping after graduate school, it rarely sank in that I had an MBA or even a Bachelor’s. Even when I verbalized it, within a month or so my co-workers would still think of me as a kid fresh out of high school with zero experience in the world (as revealed in conversation). This is probably a subconscious process, but I think it does relate to the crab analogy I brought up.
So where am I going with all this? To tie it back to finance, Robert Kiyosaki (author of Rich Dad, Poor Dad), frequently discusses the difference between an asset and a liability. He stresses the importance of distinguishing the two. When he first asserted that a homeowner’s house is a liability, hissy fits erupted everywhere. People were too emotionally attached to their homes to hear these words. Nevertheless, as he puts it:
– An asset puts money in your pocket.
– A liability takes money out of your pocket.
He argues (for good reason) that to be financially healthy, one must have the discipline and knowledge to distinguish the two, without emotion involved. Let’s apply that to people again.
I now realize the two ex-friends I mentioned were liabilities. They were taking net worth away from me, by trying (intentionally or not) to keep my mentality (and thus prospects) at their level, even when I knew of alternatives. Therefore, added together on the balance sheet, these two guys subtracted from my net worth. They were negative numbers. Now that I’ve cut them both off, their combined value to me is $0. No more, no less. This is better than their value before.
As my quest for assets continues, I certainly know where to look. Luckily I live in Los Angeles, where they’re abundant. The next problem, of course, is the Catch-22: if your network is your net-worth, how do you break into a high-net-worth network without first having their net-worth?
When I solve this puzzle, I’ll get back to you. But until then, here are two of my key thoughts going into (the remaining 11 months of) 2019:
1 – Your Network is Your Net Worth, when the right people are counted as liabilities (ie. negative numbers).
2 – Weeding out liabilities is just as important as adding assets. So always be on the lookout for lurking wolves in sheep clothing. They’re much worse than just wolves.