Rule #12: Build Real Friendships and Relationships.

14 money rulesA reader asked me if I could break down my ideas into a handful of principles. After some careful thought, I came up with a list of fourteen basic “rules” that summarize my money and life philosophy. I’ll be presenting these as a weekly series.

Many people argue that the fundamental unit of value in the modern world is the dollar. I disagree – I think the fundamental unit of value in the modern world is the relationship, and income derives from those relationships.

Think about it for a moment. What happens if your relationship with your boss and your coworkers sours? You lose your job – your income goes down. What happens if you build stronger relationships with your boss and your coworkers? Your income goes up – you get raises and promotions and bigger projects.

You can easily carry this over into your personal life, too. Let’s say you’re about to move. If you have a lot of real friends, a few phone calls will get you all the help you need. If you don’t have these relationships, you’ll be shelling out cash for a moving service (a big cost) or doing it yourself (a huge time sink).

This phenomenon pops up in pretty much every aspect of our lives. Food? If you have lots of relationships, you get a lot of dinner invites. Household supplies? If you have a lot of friends, at least one will have a warehouse club membership and will likely split some bulk purchases with you. A leaky roof? If you have a good friend that’s a carpenter and several other friends willing to hammer nails, you can likely get that roof fixed on the cheap. Entertainment? Swap piles of DVDs with your friends.

The list goes on and on.

From this, it’s easy to see that building up a lot of real relationships with people is valuable. What do I mean by a real relationship? I’m referring to one where something of positive value is exchanged on a regular basis – useful advice, a helping hand, loaning of items, an ear to truly listen, and so on. Any relationship worth its salt has a healthy dose of positive exchanges of value with a minimum of negative exchanges (insults, backstabbing, gossip, incorrect advice, being an obstacle).

I confess that for a long time, I didn’t know how to do this well at all. It wasn’t that I thought other people should give me value in exchange for nothing – I just simply didn’t understand the value of such exchanges. I was naturally quiet and it felt to me as though the effort expended in making myself reach out was much more than any value there was in what I might have to offer. In other words, introversion and a lack of self-confidence left me in a state where I didn’t build many relationships.

So how do you build a lot of value-based relationships? Most of the ideas I found on this topic came from Dale Carnegie’s How to Win Friends and Influence People and Keith Ferrazzi and Tahl Raz’s Never Eat Alone. The former helped me with the mechanics of actually communicating with people and helped me to build the courage to talk. The latter helped me figure out how to use those mechanics to build lots of value-based relationships.

Tips to Building Real and Honest Relationships

1. Open up a little.

If you’re an introvert and prefer to be quiet, the best thing you can do for your life is to work on overcoming that nature. Talk to people. If you find this hard, bone up on techniques for basic conversation. Work on tactics that make you appear more confident, even if you aren’t.

2. Surround yourself with people.

Go to where people are and open up. Attend conferences and conventions and meetings. If you hear someone talk who seems interesting, follow up directly with that person. Volunteer to present – it’ll give lots of others a chance to hear you.

3. Host parties.

Start having dinner parties and backyard barbecues on a regular basis. Don’t just invite the same old people, either – rotate the people you invite. Try to mix it up, too – don’t just invite the same circles. Mix the circles. This gives you the powerful opportunity to introduce people who may not know each other but may actually have a lot in common. If you don’t know where to start, start with your neighbors and your current friends.

4. Keep in touch.

Make a regular habit of keeping in direct contact with people. My technique is simple: I keep a big list of people I want to maintain relationships with and I strive to contact people on that list on a regular basis. I let them know what I’m up to directly and ask what they’re doing.

5. Give of yourself freely.

If someone needs help, help. Don’t worry about “payback.” Don’t worry about what you might get out of it. Just help them. If you contact someone and find out they’re stuck on a project, need a job, or need a helping hand in some other way, either provide that help yourself (if you can) or find someone who can provide that help and make the connection.

6. Ask for advice – and share what you get.

One thing I’ve found very useful is to treat my circle of friends like something of a help group. When I’m stuck on a big purchase or something like that, I ask a large group of friends for help and suggestions. I then compile all of that, figure out what’s best for me, then take the best of the information and send it back to all of my friends, letting them know what I found out. This is almost universally valuable – people love participating to help a friend, they love getting that info back, and when I mention them, they sometimes make new connections themselves.

7. Show appreciation for help that you get.

At some point, you’ll need some direct help from the people you’ve built relationships with (you’d be surprised how often they provide indirect help). When you do ask for that help, be thankful. Thank them for showing up, thank them for whatever help they provide, and do what you can to make their contribution easier – plenty of beverages, food, or anything else you can provide.

Doing these things over and over again will cause you to build a lot of stable, value-based relationships over time. Time and time again, those relationships will come through for you when you need them in your career and in your personal life.

Trent Hamm

Founder & Columnist

Trent Hamm founded The Simple Dollar in 2006 and still writes a daily column on personal finance. He’s the author of three books published by Simon & Schuster and Financial Times Press, has contributed to Business Insider, US News & World Report, Yahoo Finance, and Lifehacker, and his financial advice has been featured in The New York Times, TIME, Forbes, The Guardian, and elsewhere.