She also looks at social pressure and advertising – she’s had a couple books out about it. The Overspent American was a big part of keeping me on the frugal path when I was in my early 20s.

My income may be similar to that of my friends because of geography. With a college degree and living in the northeast, a 6 figure salary is commonly considered “middle class”. If I tend to associate with my old college buddies or people like that and we live in the same region,it stands to reason that we’ll all make a minimum salary in the middle class (of course, the guys who went to Wall Street or law school do make a heck of a lot more than I do). If I lived in the mid-west, I’d probably be considered “wealthy” with the same income and living in a mansion for the same mortgage I’m paying now for a modest house and property. So, part of the correlation is pre-determined in my opinion and not necessarily a result of being friends with them.

On the spending side, again, there’s probably some overlap since you normally become friends with someone due to shared interests, hobbies, past experiences, etc., so if that entails golfing and joining a country club or driving sports cars, those are “expensive hobbies”.

I find we’re actually much more frugal than virtually all our friends. Don’t get me wrong, we have a few friends who are “cheap” but not frugal. They spend a lot on themselves and then tip horribly and give chintzy gifts or happen to always “have to hit the MAC” when it comes time to pay the bill. We tend to be more generous in those situations but save and invest much more than our friends.

I’m continually amazed by finding that people with high incomes (Double that of ours or more since I’m the single source of income) carry signficant credit card debt. It’s like, if you’re making 250K, how do you have credit card debt???

So, I think spending patterns are also very much determined during your formative years, perhaps even before you’re met a new friend later in your 20s and beyond.

I do think there is something to the spending side of this, though. Friends influence each other’s spending habits regularly. So, I see one inherent danger in assuming more wealthy friends. Hang out with the ones who spend the most money and you start spending more money…trouble is, if your income hasn’t caught up to theirs, then you’re spending more then you can afford and putting yourself in a bad position. Thus, keeping up with the Joneses was born.

Ultimately, I say pick people who will enrich your life overall, not just financially. As our relationships with people and how we interact will be what really defines us, don’t let money do the choosing for you. If being wealthy is your goal, then work towards it independently of what your friends are doing.

I also think his rule of averages is skewed because we tend to find wealthier friends as we get wealthier. Maybe you join a country club and start golfing with new buddies. Or, you start collecting artwork where you end up associating with other art collectors – typically wealthier folks. Then the five friends tend to have more money than your friends from the municipal golf course or local watering hole.

I really don’t think this is good advice from Winget who usually provides solid ideas. Hang with the people who make you happy. And, set goals for wealth if that is what you want.

I think your income is likely to be similar to your peers because ‘birds of a feather flock together’. You have similar environments, tastes, interests etc, and therefore are likely to end up in similar types of jobs and therefore similar income levels.

First, I’d have to figure out who my five closest friends are. The guys from high school, the guys at church, the guys at work? I don’t have any college friends I hang around with, as I got my degree much later in life than most.

Second, I’d actually have to ask some of these people what their income is. It hasn’t been something I’ve really concerned myself with. I can only tell for sure what one of my friends makes, because I’m on the committee that sets his salary.

Third, I do have one fairly close friend from high school who’s a multimillionaire. His income would really screw up the average.

I definitely don’t spend money according to what my friends spend. I buy what I want/need within my budget and plans. Who cares what “the Jones” are doing?

Surrounding yourself with doctors who graduated from Johns Hopkins and live in big mansions isn’t going to affect your income unless you start performing brain surgery. Many wealthy people aren’t particularly good and managing their finances; they simply have skills that are quite valuable.

If the argument was that you should surround yourself with entrepreneurs successful investors, I could see the logic.

There’s also the non-financial side on this. Am I going to add or remove friends based on financial reasons? No, no, a thousand times no. Friends help maintain sanity – they are priceless.