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20240313-Aneth-Ng-Lim

Aneth Ng-Lim

<div><span class="fr-img-caption fr-fic fr-dib" style="width:960px"><span class="fr-img-wrap"><img src="https://od2-image-api.abs-cbn.com/prod/editorImage/choosing friends new.jpg" style="width:960px" class="fr-fic fr-dib" alt="Artwork created with Muse AI"/><span class="fr-inner" style="text-align:left"><em id="isPasted">Artwork created with Muse AI</em></span></span></span></div><p>A new study called Friends with Benefits caught my eye, and sorry, this is not that more romantic “friends with benefits” phrase that most people are familiar with. </p><p>Earlier this month, Marketwatch.com reported that the US National Bureau of Economic Research released a study that suggests when people have more rich friends, chances are they are also saving money, and even investing them for greater potential earnings.  The full title of the study is “Friends with Benefits: Social Capital and Household Financial Behavior.”</p><div><strong>Saving more, and investing more</strong></div><p>According to the researchers, for every 10 percent increase in friends with a higher socioeconomic status, they saw people of less means to have a nearly 3 percent greater chance of investing in the stock market and about a 5 percent increase in the chance that they saved money.</p><p>The authors of the study were affiliated with Baylor University’s Hankamer School of Business, Binghamton University’s School of Management and the University of Southern California’s Marshall School of Business.</p><div><strong>The company we keep matters to our wallet</strong></div><p>What made me curious about this is that I confess I have my own biases when it comes to being friends with those who have more money, and sadly these biases multiply the more money they have.</p><p>Growing up, you may have heard nasty talk about social climbers, or stern warnings about sticking to your own kind of people.  Then there are some documented stories of those who fell into debt because they overreached, and tried to keep up with rich or richer friends.</p><div><a href="https://news.abs-cbn.com/video/business/07/14/23/how-much-do-gen-zs-know-about-personal-finance" id="isPasted">How much do Gen Zs know about personal finance?</a></div><p>Whichever side of the spectrum is more true, the good or the bad, what’s clear is that the company you keep will have an impact on your wallet, today and tomorrow.  How to make sure it’s the positive side of the spectrum?  Here are things you can do to make sure it’s all good influence, and none of the bad.</p><div><strong>#1 Live within (or even below) your means</strong></div><p>The more you are exposed to wealth, the more you see its trappings, which may include “wants” that cost over and above your paycheck.  From designer clothing to fast cars to luxury vacations, you need to learn to draw the line so you can be friends with those with richer pockets without your wallet bleeding.  Living within your means is a good rule to follow regardless of whether or not you have wealthy friends that may tempt you to cross the line.  </p><div><strong>#2 Take notes on their money moves</strong></div><p>While working for a multinational company, I met people who do not need to work, and yet choose to for personal reasons. Clearly, they do not need their paycheck so I wondered what they do with it.  One told me that she took advantage of our housing loan benefit, and bought real estate.  Her payment term was set to five years, and once she paid off one property, she looked for her next investment and repeated the cycle.  Another told me she signed up for automated savings, and then these were invested in mutual funds.  With a long-term investment horizon, she did not need to worry about short-term market volatility.</p><div><ivs-player data-ivs-key="e8c22c015ca9eafa76f1e3edfa03c603" data-ivs-spid="3001339" data-ivs-vid="2914104"></ivs-player></div><script src="https://player.ivideosmart.com/ivsplayer/v4/dist/js/loader.js"></script><div><strong>#3 Piggyback only when you can afford it</strong></div><p>The rich do not just save their money, they also invest it.  When we hear of how much money so-and-so made from investing here or betting on this stock, we cannot help but hate that we missed out.  So it’s possible that given the chance to piggyback on their investment choices, we might do so.  But one thing that makes us different from them – they can afford to lose some money.  You may be thinking that it’s a sure bet, but there is never a sure bet in investments that comes with handsome rewards.  So if you try to ride their wave, do it with money you can also afford to lose.</p><div><strong>#4 Watch how they save money, and do the same</strong></div><p>Everything from tax deductions, to taking advantage of offers from stores or banks or their employers, to avoiding debt, watch how the rich save money and then do the same for yourself.  I remember being surprised at how a younger colleague negotiated for her salary package.  She asked for stock options, stock purchase plans, higher insurance, and topping up the retirement plan.  And so I asked why not lobby for more pay?  She was quick to answer: “I already know this is a good take-home pay, and likely there is little room to ask for more.  But I wanted to push for benefits where I can stand to get more in the long term, with just a little money out of my pocket.  This way, I can also show that I am in this for the long haul.”</p><div> </div><div><strong>#5 Treats are fine, but watch the fine line <br/></strong></div><p>If you have good friends, and they also happen to be rich, they may treat you not just to a meal but to more generous gifts like free vacations.  The more giving they are, the more eye-popping the treats can be.  It’s okay to say yes, but set boundaries.  Someone I know travels with her well-off old classmate and gets treated like a personal assistant during the trip.  She does not mind as they stay in the same hotel room and eat the same meals.  But she admitted that she would probably feel bad if her friend stayed in a suite and she was assigned a smaller room or even had to stay in a different hotel.  She felt like she repaid the kindness by helping her friend manage her schedule overseas and run some errands, and then they make sure they spend enough time where they are just being friends and enjoying each other’s company.</p><div><strong>#6 Stay on the right side of the law</strong></div><p>Not all rich friends ask you of this, but some do.  We met a businessman from abroad years ago who was so friendly to the point it was a bit nauseous.  Turns out he needed a favor – he wanted to set up companies in the Philippines and needed Filipino friends to “represent” him.  My husband and I clued in on his not-so-nice intentions early, and managed to walk away.  We suspect someone we know did not.  Remember that just one “bad” favor can land you both in trouble so be careful.</p><div><strong>#7 Do not count other people’s money<br/></strong></div><p>Now this I heard from a basketball superstar when asked how he feels about other basketball superstars getting paid more.  Steph Curry said this wise advice came from his father and he learned not to pay attention to others’ good fortunes and focus on his own.  </p><p>When it comes to having rich friends, it’s probably tough not to look at how much they have, and start counting their money.  But this can keep you from enjoying what you have, and building your wealth from there.  Take care of your own “farm”, sow what you can today to reap for tomorrow, and learn to be grateful.  Build from there and one day, you could be the one helping others boost their wealth.</p><div><a href="https://news.abs-cbn.com/advertorial/life/12/15/21/why-personal-finance-is-integral-to-your-dream-future" id="isPasted">Why personal finance is integral to your dream future</a></div><div><img src="https://od2-image-api.abs-cbn.com/prod/editorImage/opinions-aneth-lim.jpg" style="width:960px" class="fr-fic fr-dib"/></div><div><strong><em>ABOUT THE AUTHOR</em></strong></div><div><em></em><span id="isPasted" style="color:rgb(34, 34, 34);letter-spacing:normal;orphans:2;text-align:start;text-indent:0px;text-transform:none;white-space:normal;widows:2;word-spacing:0px;-webkit-text-stroke-width:0px;background-color:rgb(255, 255, 255);text-decoration-thickness:initial;text-decoration-style:initial;text-decoration-color:initial;display:inline !important;float:none"><em>Aneth Ng-Lim returns to writing after more than two decades of working as a communications specialist in the government and the private sector. Her advocacy for financial inclusion and personal finance began when she served as head for Consumer Education during her stint at a multinational bank. </em></span></div>

<p>Marketwatch.com reported that the US National Bureau of Economic Research released a study that suggests when people have more rich friends, chances are they are also saving money, and even investing them for greater potential earnings.</p>

Marketwatch.com reported that the US National Bureau of Economic Research released a study that suggests when people have more rich friends, chances are they are also saving money, and even investing them for greater potential earnings.

Friends with 'benefits': How choosing the right friends can help you become richer

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Friends with 'benefits': How choosing the right friends can help you become richer

Aneth Ng-Lim

Published Mar 13, 2024 04:57 PM PHT

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Updated May 28, 2024 03:45 PM PHT

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