Study: Rich Friends Have Rich Friends

Looking to boost your bank account? A study analyzing 27 million Facebook users and IRS tax return data suggests that having rich friends increases your own likelihood of investing and maintaining a savings account. This could be because affluent friends convince those around them to make sound financial decisions. “$1,000 invested in the S&P 500 in 1980 would be worth $121,350 today – this creates a disparity in wealth for those who participate relative to those who do not,” study co-author Brad Cannon explained. Having 10% more high-income friends is associated with a 5% higher chance of having a savings account. “Perhaps knowing people who invest makes it less daunting and fraught, particularly if those friends can serve as a resource and sounding board,” Cannon suggested. (Study Finds)