Tuesday, October 16, 2007

Becoming Wealthy Is Contagious

Socially contagious, that is. Hanging with the money crowd by Jean Chatzky at Money Magazine discusses the phenomenon of social networks developing norms, both good and bad, for the group. Earlier this summer, a study published in The New England Journal of Medicine showed a person's chances of becoming obese increase significantly if a friend, sibling or spouse becomes obese. "We find that a person's chances of becoming obese increase by 57% if they have a friend who becomes obese, 40% if they have a sibling who becomes obese, and 37% if a spouse becomes obese," say researchers Nicholas Christakis, MD, PhD, and James Fowler, PhD.

Ms. Chatzky points out that the social norms phenomenon for obesity may also have relevance to money management. For example, financial advisor Pam York Klainer has long recommended to her clients to "find people who have the money behaviors you want to learn and start hanging out with them." The good habits are likely to rub off due to the social network pressure. If your current networks aren't working, Ms. Chatzky suggests using the web to access a network or to create a new network on your own.

To me, her best recommendation is to teach one's kids. I fully agree as I wrote in My Parental Responsibility - Be a Great Role Model. My daughter learns often by copying what her parents do. If I can model good personal finance behaviors, I can give her a head start for her future.

For more on Ideas You Can Use, check back every Tuesday for a new segment.

This is not financial advice. Please consult a professional advisor.

Copyright © 2007 Achievement Catalyst, LLC

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