The importance of Collaboration

Hello students and welcome back to Fire University. In today’s class we will be discussing the importance of being able to collaborate with a diverse group of people and the benefits it has for you both personally and professionally. Collaboration basically means to have two or more parties working together on the same task. In today’s fast paced and high tech business environment it is imperative that we are able to work with people of different age, sexual orientation, religious beliefs, economic standing, and ethnic background.

photo of people doing fist bump

So how does this relate to Financial Independence? Well I’m glad you asked. First off we now live in a global economy where trade happens across the globe from country to country. A great example of this is how large companies are moving their manufacturing overseas to harness cheaper labor in underdeveloped countries with a much lower cost of living, this allows the companies to greatly reduce the final price offered to their final customer. These customers are typically in another country than the where the manufacturing took place, so the company leaders have to be able to work with a design team to create a product and then work with a foreign entity or government to secure manufacturing and finally a marketing team to properly market the product to the consumer. At each level of production it is important that all parties feel that they are being treated and compensated fairly.

group of people in a meeting

In our personal lives we sometimes live in bubbles made up of friends and family with the same beliefs and world views that we have, this causes us to never truly be tested and forced to think outside the box or see things from someone else’s perspective. By creating a diverse group of friends we are able to gain a better insight into our own selves and understand why we behave and act the way we do. Having friends of the opposite sex is great to be able to bounce questions about a relationship off of and having friends of different ethnic groups gives us a chance to broaden our cultural intelligence and see world events through their lens not just ours.

selective focus photo of magnifying glass

When it come to investing we always hear the old advice of diversification when it comes to proper asset allocation within our portfolios. Why is that? Diversification of assets allows us to spread our risk among different asset groups that are not directly correlated or related to one another. The hope is that if one asset loses value another will help to offset it. One of the usual allocations we see in the FIRE community is the use of index funds which are diverse by nature, but even with that in mind we still diversify further by putting some in domestic equity markets, foreign equity markets, and some into bonds. This allocation allows us to share in the growth both here and abroad as well as offer some stability through the presence of bonds. In essence we are collaborating with managers and team members of businesses from all across the world as well as economies and consumers from the world over. This type of collaboration allows us to broaden our horizon and earn returns from a much larger group, rather than relying on ourselves to earn income.

abundance achievement bank banknotes

One of the best examples of collaboration is the Fire Community of bloggers. All one must do is hop on twitter and search Personal Finance, Financial Independence, or Early Retirement and they will be met with a wide array of some of the most amazing people from all over the world. The FIRE community is made up of men and women from all different ages, races, religions, and backgrounds that have one thing in common, their desire to help others save more, spend less, and become financially independent. By following people in this community you will be privileged to a wide array of different ideas and strategies to help you on your journey towards Financial Independence.

Thank you for joining us and remember that we are not licensed financial advisers or tax professionals, please consult with your financial specialist before making any financial decisions.

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