Several years ago, I hired a summer student enrolled in university for some general office administration. Before the start of the next summer, she called and asked if I was hiring for that summer. For a variety of reasons, we did not need help that summer. However, I asked her if she could forward her resume to me in case someone I knew was looking for help. In such an event, I could quickly pass her resume along with a kind word.
She said no.
This to me was a head-scratching move. Summer jobs are hard enough to come by even if you know the employer. But to turn down a chance to have a resume passed along with a reference is tantamount to ensuring your summer spent unemployed or in summer school. Not surprisingly, I have not heard from this summer student since.
We often use the phrase it is not what you know but who you know to emphasize (both positively and negatively) that your network is sometimes more important than your credentials. Yet, when confronted with an opportunity to expand ones network, some of us turn down these opportunities.
The notion of human capital, often called the most over-looked aspect of personal finance, is traditionally seen as an output of education and experience. However, one could argue it also encompasses the power of ones network. After all, the foundation of desirable personal finance outcomes- getting a good job, being invited to invest in businesses/products, listening to experts give advice- are often an outcome of people you know.
Every single job I have been hired to do, except for my entry-level lawyer position (done through a formal recruiting process) was someone connected to someone I knew (sibling, boss, friend, professor, client and colleague in my networking group off the top of my head). The investment advisors who gave me the greatest advice and/or tips are/were advisors with whom I had drinks or dinner with- they werent my investment advisors but they offered free advice as a friend. Best tax advice? In a gym locker-room with my accountant. Best ways to obtain new clients? Have clients introduce you to their friends.
We often have negative connotations of networking. Think of politicians glad-handing, pointing at VIPs in a room, kissing babies etc. It is not like that at all. To paraphrase Woody Allen, it is about showing up. To mix metaphors, networking is like dating. The other side is just as nervous as you so just be yourself.
Who do you network with? Anybody. The conventional analysis is to find the VIP and become part of their network. But everyone is doing that already. The power of networking actually lies in the power of the weak link. Think of your group of close friends. You all know the same people. You all hang out at the same place. But find someone outside your immediate circle and one is introduced to new opportunities.
If you are looking for a job, I would suggest that not only you engage in traditional job search strategies but also volunteer for a worthy cause. It is a good way of meeting new people, expand your network and show people you are just not in it for yourself. If you are in school, I would take every opportunity to meet people outside your immediate circle; I was once told by a successful entrepreneur that his first external investor was his dentist who he had befriend as a teenager. Dont know anyone? Join a club or association where there are structured opportunities to meet people.
The point is that net worth is not only a function of assets and liabilities but relationships which fulfill both personal and finance needs.
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