Your sphere of influence is what will help propel you to financial independence. Make sure you nourish it.
My first understanding of the power of influence came as a 21 year old at 1 New York Plaza, New York City. During a job interview with a sales trader at Goldman Sachs, I remember him telling me the most frustrating thing about his job was that as soon as GS showed up in the queue to buy, the stock would instantly move higher.
His job was to buy stock for an institutional client at the lowest price possible. But because GS was one of the most powerful investment banks at the time, other traders would instantly try and front-run a GS order.
The thinking always went like this: If GS is selling, we should probably sell as quickly as possible because they probably know something we don’t know and vice versa.
Due to the constant front-running, algorithmic trading and dark pools were created to obfuscate large buyers and sellers. When there was simply too much stock a client wanted to offload, an investment bank would act as a principal, buying the stock at a discount in hopes of re-selling the stock to other clients at a premium.
With enough discretion, taking such risk often paid off. But sometimes, the bank would get slaughtered due to loose lips.
The Sphere Of Influence
Nowadays, the most common example of influence lies in an announcement that XYZ famous investor took a stake in ABC stock. For example, whenever Warren Buffet says he bought something, you can be sure the stock will jump several percentage points. The only way you can really get an edge is to buy Berkshire Hathaway stock.
None of us will ever be as influential as Warren Buffet, but over time, we can all develop our own sphere of influence.
The easiest way to develop influence is do something and succeed over and over again.
For example, after you’ve done 1,000 successful eye surgeries, you will become the leading eye surgeon in the land. You will be invited to conferences, be able to direct research funding, and receive a steady stream of clients. Your influence will enable you to raise prices, create courses, license your name, and get rich in the process.
If you’ve done 25 surgeries, and botched five of them, nobody will ever want to see or hear from you again.
Develop expertise through consistent execution and patience.
Related: The Secret To Your Success: 10 Years Of Unwavering Commitment
Influence Can Come From The Smallest Idea
Although a lot of folks from all over come to Financial Samurai to learn more about personal finance, this site is really tiny in the grand scheme of things. I don’t expect to influence the world, especially since I’m an unemployed nobody.
I only expect to help the 3% of you who actually take my advice. That’s right. Based on conversion metrics, roughly 97% of you read something and never take action. That’s cool, because it just means something isn’t painful enough for you to do something about it.
Real Estate Influence
Because I like to check out open houses, on average I speak with three real estate agents every week. I always ask the real estate agent at least three things: 1) How do you think the market is doing versus this time last year? 2) Where do you think the market is heading over the next 12 months? and 3) Where is the best place in the city to buy?
To my surprise, over the past several months, more than half of the experienced real estate agents have told me the western side of SF is the best place to buy. They pointed to Inner Sunset, Parkside, and Golden Gate Heights as the primo neighborhoods to make the most amount of money.
Several even listed reasons why Golden Gate Heights is the best area which sounded eerily similar to the reasons given in my post published in 2014 called, “The Best Place To Buy Property In San Francisco Today.”
Then one realtor handed me a flier with this chart below. It’s Redfin’s 10 hottest neighborhoods in the ENTIRE country to close out the year 2017. Notice anything interesting?
What Are The Chances?
There are around 150,000 neighborhoods in America and 119 neighborhoods in San Francisco alone. What are the chances that Golden Gate Heights, a tiny neighborhood, would even make the list? My guess is less than 0.1%.
When I Googled,”the best place to buy property in San Francisco,” I found my article in the #1 or #2 spot of the results. So I asked all the realtors whether they had heard of Financial Samurai before, and all of them said yes.
Ah hah! It seems that three years after I made a strong argument for Golden Gate Heights, Google now agrees with the argument, many realtors now agree with my thesis, public company Redfin agrees, and now a herd of new buyers agree.
In fact, just the other day, our local paper republished a post originally published on Business Insider about Golden Gate Heights.
Developing Influence Is Important
I might not be able to influence the world with my tiny site, but I have been able to influence the population looking to buy real estate in San Francisco. In turn, this influence has helped improve my net worth given I’m long a panoramic ocean view home in Golden Gate Heights.
Who said the only way to make money blogging is through online advertising? My biggest mistake was not buying two GGH properties before the mass media and real estate companies decided to agree.
Will they give me credit for the thesis I made in 2014? Of course not. But it doesn’t matter because what I care most about are the results. Inception is about planting an idea a long time ago and making the evangelists believe it was their idea all along. Having someone else, especially in a position of power, speak for you is much more effective than speaking for yourself.
The author of the Business Insider article graduated in 2013 and came to SF in 2015. From her perspective, GGH is an incredible revelation. For FS readers and long time SF residents, not so much. To be able to influence the mass media can be very lucrative. Why do you think billionaires like to buy newspapers like The Washington Post?
Achieve Financial Independence With Influence
The most important place to grow your sphere of influence is at work. Do what you say you will do in a professional manner for a long enough time and you will get paid and promoted.
Once you’ve developed a solid track record at work, develop influence with your clients and competitors. If your clients all believe in you, then you can go anywhere and your clients will follow. The more you are respected and feared by your competitors, the more they will want to poach you for bigger bucks and a larger role.
To really scale your influence, establish a presence online. Compared to offline reach, online reach is unlimited. I could have tried to meet every single realtor in San Francisco to make my Golden Gate Heights pitch in person, but that would have taken forever and expended too much energy. Instead, I simply spent a few hours typing a post, then let the internet do its thing.
Once you develop influence you can scale your influence into any number of things:
- Public speaking
- Building a business
- Creating a subscription newsletter
- Managing other people’s money
- Selling your own product
- Running for political office
- Selling other people’s products you believe in
- Getting other companies to hire you away for big bucks
With so many new ways to make money beyond your day job, your financial worries should decrease, if not disappear altogether. Achieving financial independence is only a matter of time.
Key Points Of Influence
* Influence must be earned through repetitive successful outcomes.
* You will only gain influence if you do what you say you will do.
* Providing an opinion when you have no skin in the game is pointless.
* The stronger your brand, the longer you can make your influence last.
* Once you gain influence, you can leverage your influence in many different directions.
* You can skip the long slog of developing your influence by joining a firm that already has influence. However, you might always feel like an impostor piggy backing off your firm’s reputation.
* Try and build a network of influential friends. Life get so much easier if you do.
Explore real estate crowdfunding. If you’re looking to buy property as an investment or reinvest your house sale proceeds, take a look at Fundrise, one of the largest real estate crowdfunding platforms today. They allow everyone to invest in mid-market commercial real estate deals across the country that were once only available to institutions or super high net worth individuals.
They are the pioneers of eREIT funds and they are creating an Opportunity Fund to take advantage of tax-efficient Opportunity Zones. Thanks to technology, it’s now much easier to take advantage of lower valuation, higher net rental yield properties across America.
Refinance your mortgage. Check out Credible, my favorite mortgage marketplace where prequalified lenders compete for your business. You can get competitive, real quotes in under three minutes for free. Mortgage rates are back to all-time lows! Take advantage by refinancing your mortgage or buying real estate.
Updated for 2021 and beyond.
Aparna @ Elementum Money says
You have a valid point there about increasing your influence to inch towards financial independence. This neatly ties up with being in the top 1% of whatever you choose to do as that is bound to make you a person of influence.
I especially like the 7-point key mentioned by you towards the end of the post as it makes the idea very doable and actionable, especially the statement – “Influence must be earned through repetitive successful outcomes”.
ZJ Thorne says
Some folks who aren’t business-owners themselves like to holler at me regarding my publicity strategy. I’ve focused on having a few clients and treating them as perfectly as possible. The only paid “advertising” I’ve done is letting my business sponsor events in the community. My reputation is growing and I’m getting more word of mouth referrals of people who want to pay for my services. It’s a tiny sphere of influence, but it matters.
Dan F says
I loved your last two bullets as they resonated with me quite a lot.
(1) You can skip the long slog of developing your influence by joining a firm that already has influence. However, you might always feel like an impostor piggy backing off your firm’s reputation.
Working at a large public accounting (consulting) firm, I am regularly advising clients on multi-billion dollar transactions. I’ve been in the game for over 11 years; yet, I still feel the impostor syndrome. Esp. in a place like New York where there’s always someone smarter, more experienced, etc. out there.
* Try and build a network of influential friends. Life get so much easier if you do.
Also from my experience at a big firm, I’ve realized its very important to gain influence within your organization. This helps you work on more interesting projects, do bigger and better things for your career, and helps ensure that someone is looking out for you come “review time” and “promotion time.” I struggled to find mentors during the first couple of years but once I did, the growth of my career really started to accelerate much more quickly.
Ten Factorial Rocks says
Great post, Sam. To me, influence is a subtle force that I see it in action in many places, noticeably in corporate meetings. When people often talk over each other during meetings to convey their points, whenever I speak, the room is hushed and they listen intently to what I have to say. This kind of influence without any hierarchical power in an organization takes years of delivering positive results and business-impacting insights. This has opened up opportunities for fast track career growth for me. This is one example of how influence plays a big role in the corporate world.
There are 2 sides to a human.
External to us, and Internal to us.
A person who can NOT influence their internal self, can NEVER influence their external.
Such a person will always GET influenced by OTHERS.
Great Post – I always remember Gordon Ramsay’s recommendation to restaurants, don’t have a huge menu, just do a few things incredibly well and you will be successful.
Money Miser says
I guess this just shows the power of words in action. It’s crazy how an online blog can have such a real world impact. Having that kind of power is almost like cheating!
What’s stopping Buffet (or you) buying something, saying how great it is, waiting a little for the vultures to come calling, then selling it again once the price has risen? Nothing, I suppose. The only result would be people trusting you less and perhaps not listening to you in the future.
Balanced Dividends Mike says
Ah… 1 New York Plaza…look straight out the building toward the harbor line and see the big orange monster – the Staten Island Ferry. It is a very nice building (old but recently renovated on a number of floors I used to work on).
Nice post as well, Sam – thanks. Good points. The emphasis on repetition and a small idea is key. I have a current higher up who uses the term “boil the ocean” – you can’t do it at once, but if you keep talking about it, follow through, and get gradual, yet consistent results, someone will notice and follow (regardless if you actually boil the ocean fully or not).
Jeff @ Maximum Cents says
The sphere of influence at my job could increase as more senior people in the company find out about the great work I do. The big issue with that is sometimes there is greater responsibility, high stress, and not much more pay. You are right that online businesses have much greater potential for scale. You have been an inspiration to start Maximum Cents and I hope I can eventually reach even a small fraction of your number of readers.
Physician on FIRE says
You’ve taken the concept of being an “influencer” to the next level, Sam. I was thrilled when the good people at Fortified offered to send me a tricked out commuter bike, but you managed to get tens of thousands in equity out of your real estate purchase with your influence. Strong work!
Rich W says
When I hear the words sphere of influence I think about the tip of the spear. Takes work to get to the point where you are able to make decisions in an organization that can make big time impact. I have been climbing the corporate ladder for 16 years and I’m on the rung of middle management. I have some more rungs to climb but each rung unlocks a new sphere of influence. #keepclimbing
Never heard of Deanwood DC; had to Google Map that one. My influence has a long way to go – at least in the writing world. But every now and then a friend or co-worker does ask what stock/fund they should invest in. I don’t like to get too specific because I’d rather avoid the blame of something failing than the praise of it succeeding. So I usually point to funds. :-)
Joey Graziano says
What a great post. I have a real-world scenario that complements this same message. When I decided to pay cash for my home I had to innovate ways of creating extra income outside of my day job. I decided to start doing some freelancing PC repair jobs. Instead of paying for marketing, I created how-videos on YouTube and blogger.com. I then shared these videos all over social media.
I would also volunteer at my local church and work for free. In addition to the internal reward of helping a person in need, this was free marketing to my community. That was the key. The local churches and businesses noticed me. I started to get many job offers and before I knew it, I was getting paid for my opinion consulting local companies in my area. All I did was fix windows computers and setup networks. I did this consistently online, in person and on blogs for many years. And people recognized my effort. Eventually I moved on to other work and 6 years later, i will still get random emails requesting my services. How cool. :)
Financial Samurai says
VERY COOL and well done leveraging your influence! I hope more people follow your path. You never know what types of good things can come out of it.
Ms. Conviviality says
There’s that saying that “who you know” is important to success but what’s probably more important is “who knows you.” How well someone knows of one’s skills and strengths will have more impact on whether someone would use your services than someone just knowing that you’re in a certain profession. I started off my side business doing wedding flowers for my sisters’ friends and after they raved about how much they loved my work, I’ve gotten more jobs through referrals.
Love this article! :) When it comes to SF real estate there’s no one else I know who is more clued in on what’s happening than you. I seriously think you know more than a lot of realtors out there.
I have no doubt you’ve had a large impact on the popularity growth of Golden Gate Heights and the neighboring surrounding areas and it is indeed a fantastic special part of the city.
It’s fantastic to be able to spread positive influences on things you are passionate about. Well done!
I’m glad I read this article. I’ve heard Warren Buffet preach about credibility quite a bit. Ironically you mention him in your article as a person with major influence. That’s probably one of his most important traits.
I’m piggybacking on the brand of my employer right now, but hopefully I can leverage that into creating my own sphere of influence down the road. For now I’m just a lowly peon building my successes one one step at a time.
This is exactly why I follow Financial Samurai. Sam has a great track record and the information is easy to understand. I’m a slow learner so I need to keep reading and slowly apply these knowledge to my life. I’ll keep working on growing my influence.
Lily @ The Frugal Gene says
Great key points! I don’t have a sphere of influence ha :( This is probably something you cultivate with age. As a 20 something, I would probably come off over confident. I haven’t proved myself in time or outcome.
I didn’t think First Hill in Seattle would make the list. There’s a giant hospital in the region so there’s quite a bit going on in terms of noise.
Great article as always. Speaking of botched surgeries, there really is no way for patients to find out how many operations a surgeon has screwed up. What about the next best thing? Consumers’ Checkbook developed a free site for the public that gives consumers a list of doctors in their area most likely to give them the best results. It’s at http://www.surgeonratings.org.
These are records from 4 million major surgeries performed by 50,000 doctors. Checkbook took on this project with the goal of greatly reducing bad surgical outcomes for patients and had to sue the federal govt multiple times to get this data.
Even if you didn’t mean it to be, this post definitely applies to parenting as well. The parent that follows through with what they tell there kid will absolutely have more influence on their child than a parent that doesn’t. It’s one of the reasons I don’t discipline when I’m super mad. If I tell my kid a consequence I will follow through. My wife on the other hand will get emotional at the time and threaten a punishment both of us know she won’t follow through on. A funny example was threatening to cancel Christmas. All of us still laugh about that one.
I’m not trying to make fun of my wife. She is a very warm, comforting, and nurturing women. However, I definitely have more influence simply because I do what I say.
Financial Samurai says
Bill, can you clarify what you mean by not disciplining your kid, but following through? Can you give an example of what you are following through on?
I plan to demonstrate consistent work ethic in front of my son until he goes to college. That way, perhaps he will find less excuses to slack off. I thought about this a lot given were both stay at home parents. But he is going to see what it truly means to hustle and not take anything for granted!
Do what you say you will do, or don’t say anything at all.
To clarify, in the heat of the moment I might ground my kid for 2 weeks. If I do that then I stick to that even if 2 weeks isn’t warranted. It’s not fair to her if the time doesn’t fit the crime. I’ve learned to wait till I cool down and then decide what punishment is deserved. It is so important to follow through with what you say.
Like you said, if you want to influence behavior ” Do what you say you will do, or don’t say anything at all.”
Billy B @ Wealth Well Done says
Good article that makes me think of something I did recently and wrote about at, Wealth Well Done, this week. I simply reached out to a million-view blogger @physicianonfire, and went on a mountain biking adventure with him. I believe friendships are our greatest assets, because influence can be more powerful than money. You gain influence as you build quality relationships. The greatest way to start building influence, is to begin building real, honest, relationships with other successful people. So that’s what I always try to do, and relationship building is probably my greatest wealth-building tool.
Ten Bucks a Week says
Do you think it is better to have two personas, yourself and your blog, or to merge them? So far I have been anonymous, but I don’t think that has helped me as I would be willing to say everything that I have written. I think I will am going to merge them when I write how I saved $170,000 on my European MBA.
I like the pun in here: If you’ve done 25 surgeries, and botched five of them, nobody will ever want to see or hear from you again.
Financial Samurai says
When you build a brand, you should also think about how leverageable it is. How much can your brand resonate with others?
For example, there is only one you, so that’s not as leverageble as building a brand around “Ten Bucks A Week”.
For Financial Samurai, anybody can become a Financial Samurai based on following certain principals. Therefore, I focus on building the FS brand.
Dave @ Married with Money says
Hah that’s a little nuts, and kinda cool, to see how you potentially influenced things years later. :)
It definitely can take some time but I’ve found that it’s more important to SAY what I’m going to do and then do it, as opposed to just doing it, even if the result is the exact same. People like to be in-the-know, and like to know that you’re intentionally doing something and can commit to things. Just producing results is okay, but without the intent being articulated and understood it just doesn’t hold as much weight.
The problem with influence is it’s relative. The saying Big fish in little pond or little fish in big pond is so true. I have an large influence on the company I work for. I see it even in discussions with the execs. Someone in the same position as me presents a similar idea and is grilled to no end. I’m implicitly trusted. But I have a small influence outside the company. I’m not being poached, I’m not published, and I am not considered one of the best in my broader field. At other companies I’d probably have much less influence, especially in companies where my skill set In is more common. In essence I’ve realized my capability of influence and sized my pool to my advantage. I can see significant positive outcome as a result.
Ms. Frugal Asian Finance says
Your analysis of Golden Gates Heights is logical and backed with solid evidence. That may be the reasoning why it’s so convincing.
It’s fascinating how you meet people who have read your work but don’t know you are the person who read the influential piece they read!
I enjoyed this post a lot Sam, thank you for sharing it. It seems so obvious now that influence can come from getting really good at one thing and successfully doing it repeatedly. But I hadn’t thought of it that way. This is a good reminder to keep pushing every day and that over time, a focus disciplined execution will really add up. Thanks again!