Exchange is a two-way-street
Often people are encouraged to think about ways in which they can offer value to others, but sometimes we need to think more deeply about the value other people are providing to us.
Your goal in life should be to create relationships where the whole is greater than the sum of the parts, and if you can do this consistently in all areas of your life (work, relationships, family and friends), then I think that is the secret to a happy life.
I've got a large collection of hard-won experiences I can share to shed some light on this analogy what I cleverly came up with.
Your investment
Really, the only thing you have to offer other people, is your time, your creativity, your effort, energy, your emotions, attention, and any resources you have access to, plus other people in your network. So not much then.
You can be nice to someone and forgive them when they make a mistake, you can smile and be cheery to your neighbour, you can go out of your way to help someone with something like cleaning up their garden. There are lots of ways we can add value to other people's lives.
This is like the stock market, where you can make choices to purchase different stocks. You have your earnings from dividends, the sale of any other stock, and any savings you have from income. You get to choose what to buy with this money.
In both cases, your investment is finite. If you buy one stock, you cannot buy another. If you help one person, then you aren't helping someone else. And in both cases, the better you manage your portfolio, and the larger and more profitable it gets, the more capital you have to re-deploy into the markets, or take out as a dividend.
Your returns
In the stock market, your returns are always financial. Some stocks go up massively in value, some pay steady dividends and just hold their value, some are a roller-coaster swinging up and down, while others look promising but crash and burn and become worthless. But for a happy and fulfilling life, you are going to need much more than money.
With people, some can lift you up - they make you laugh when you're feeling down. Some people inspire you to want to be a better person, some people hold you accountable and push you to become more than you thought you could be.
Other people have control of resources, or access to other people and opportunities. Maybe a job in an exciting industry, maybe seed-funding for that business you wanted to start. Maybe you have a book you want published and want it promoted to a wide audience.
Then on the down-side, some people will take credit for your work. Some people will shift blame for their mistakes onto you. Others will spread vicious rumours about you and destroy your reputation. Some people will constantly negate you and your efforts, chipping away at you day after day. Other people are highly unstable, giving love and affection one day, only to blow up like a volcano the week after.
Like the stock market, everyone has different investment goals. So you need to tailor your portfolio to meet your needs. Try and assemble a portfolio of personal relationships that gets you what you want out of life.
Realise though, like buying better quality stocks costs more money, connecting to better quality people means you need to up your game a bit. But you don't have to do it all at once, you can boot-strap this process and get incremental improvements that compound over time.
How do I know what I want
This can seem like a difficult question, but it's actually quite easy to solve. Just look over your life and pay attention to your emotional reactions to things. Things that got you energised and excited point to areas where you have a passion and interest. Things that scared you point to growth and opportunities for development. Things that made you angry point to stuff probably best avoided.
So you can do a quick audit of your life, and see which people brought the types of things you are looking for, and which people brought the kind of drama and upset that you can live without.
Compounding really matters
If you keep buying into stocks that do well, then over time your portfolio grows. You have dividends being paid out that you can reinvest to grow your portfolio without having to add any of your own earnings.
Similarly, if you keep investing money into a fund that turns out to be a ponzi scheme and collapses, you have lost all the capital you allocated AND all the future earnings that should have provided.
So with people, if you consistently work with good, honest people. And your time and effort is rewarded with a fair salary, being treated with respect, and being trained and lifted up as a person, you will continue to improve in life. You will learn new skills, have a positive outlook on life, and generally enjoy yourself. This creates value in your network which means you have something to offer other successful people and so on. Your value compounds and things get better and better.
If you keep giving your time and energy to crooks, you will find that the organisations you work for will have a bad opinion of you even though you worked your ass off. You will be upset a lot of the time, emotionally unstable, have a cynical view of your fellow man.
This is not the type of person that successful people want to associate with, and future opportunities will be closed to you.
Investment strategies
So how can we take our knowledge of the stock market and apply it to human relations?
Portfolio allocation
You can concentrate your portfolio into one stock. If that stock does well, you do well, but if that one does badly, you do badly. You can also diversify, but when you do that you will never do very well or very badly, you will just get the average.
So while it's good to have back-ups, each one takes some of your resources away from your main play.
In life, you are going to make one or two very big allocations. Usually the biggest is marriage, then another big one is a business partner if you go that route. These are big commitments because they are difficult and expensive (in time, energy, emotion etc) to get out of.
Mid-sized commitments are things like a job, which while significant is easier to leave simply by finding another one and handing in your notice. Close friends is another mid-sized commitment.
Then all your associates and people in your wider network are much lower-risk ventures. They are a bit like an index fund, you get a kind of average across that larger pool of people you know.
Risk management
So not over-allocating and not being over-exposed make a big difference, as you've got something you can do if things go south.
If you start a business with someone, make sure you have a clear exit strategy if things aren't working out. You never think this when you start, but if you've been around long enough you will know that not matter how well you get on at the start, it's quite likely that you will part ways one day.
Having a legal contract that states one of you is entitled to step back let's say, and that your shares will be transferred over time on a payment schedule (maybe up to a certain limit if you want to stay on as a passive investor) could be one way to more tidily wind down that relationship than a gruesome legal battle in the courts.
A bit like stop-loss on a stock. Avoid the sunk-cost fallacy, and if something drops below a certain level just cut your losses and chalk it up to experience.
Growth strategy
Some people have a trajectory, where they are likely headed much higher than they currently are. Developing these relationships with a longer-term view is a bit like buying into a promising start-up. There is risk there, but luckily you don't have to invest tons of your resources because the potential returns are so high.
The thing I look for in people above all things is willingness. This will eventually trump all knowledge and experience, because the willing will always learn and find solutions to problems.
They triumph through sheer force of will, persistence, and desire. They do the hard-things, the things other people are not willing to do, and they will always grow into something bigger than what they are now.
So with people you need to judge not just where they are now, but also how quickly they learn, what their attitude towards things are (like set-backs, or difficult people), and you will see what their potential is.
Don't be fooled by the manic. This is a type of insanity where they feel compelled to be optimistic, but be warned, it is not real. Manic people tend to be quite unstable, and will go through periods of low-motivation if they are faced with a big set-back. They will also tend to ignore or wave away genuine risks.
Real positivity will acknowledge problems, but will ultimately believe they have what it takes to navigate them and will not be afraid of changing their actions to respond to real threats.
Manic people will just insist that everything will be fine, even though you can quite clearly see you are about to drive off a cliff. You will meet them in the hospital half-paralysed and they will not be the least bit concerned about their future basketball career.
Avoid pump and dumps
A pump and dump is a stock that appears to be on the cusp of a massive growth, whereas the reality is market manipulation is going on where you are buying from the scammers who are trying to dump the worthless stock into your portfolio and keep the profits for themselves.
Some people are very charismatic, but does that really matter? Does listening to funny stories compensate for the harm caused by merciless back-stabbing?
Self-confidence, a sense of humour and so on, while of some value, pale in comparison to things like loyalty, honour, integrity and honesty. Take surface level things with a pinch of salt and look at fundamentals. Examine the balance sheet and see what's really going on under the hood.
I've learned that narcissists will be seemingly friendly but always make you slightly uncomfortable or that you feel a strong need to impress them or get their approval. That's because under the smiles, the narcissist holds you in deep contempt, and you can feel it even though you don't know how.
Really good people you can be relaxed around and just be yourself and they will accept you for who you are.
Be honest
Honesty comes in many forms, but really this amounts to not being biased.
Bias is probably one of the most dangerous things because often you don't even realise you have it.
The most extreme example I've seen of this is the Bed Bath and Beyond (BBB) community. They have become convinced that the BBB stock is part of a grand conspiracy, and that even though the company has now filed for bankruptcy and been de-listed from the stock exchange, that in reality it's part of a larger play to actually convert the stock into a new company that is going to be even more valuable than the original.
Rather than just face the fact they've made a bad investment, they are going to insane lengths to keep the dream alive. They are, in essence, degenerate gamblers. What you would have seen in years gone by, lost souls pumping away at slot machines into the early hours, now thanks to the internet people with the same mental illness can be clinging onto "investments" that exist only in their minds.
You have to be real about things. If something isn't working, just admit you made a mistake. If a relationship doesn't work out, or it's not providing you with value, so be it. It doesn't make sense to keep buying more shares of a company that is going bankrupt - you are only going to lose it.
On the flip side, if someone backs away from you, or distances themselves, you have to take an honest look at yourself. Did you do something wrong? Sometimes not, sometimes that person is just a bit of a jerk.
But sometimes you are at fault. Sometimes you can behave unreasonably. Even if you only made the slightest mistake, don't miss the opportunity to learn and become a better person. You will benefit greatly from that over time.
Summary
So there you have it. Careful and prudent management of both your financial investments, and your human relations, should lead to success over time.
Pay attention to what value you provide others, and what they provide back and make sure to keep this balanced and a mutually beneficial exchange.