There are many times over the past couple of months where I thought to myself that I should probably move to New York, yet here I am still in Philly. Part of the reason I’ve been reluctant to leave Philly is because I still thought that there were some friendships with room for growth. I didn’t want to cut off funding for friendships that have not reached their full maturity yet.

If I really wanted to prioritize my career, I probably should have moved to New York ages ago. Although remote work has saved me quite a bit of money on rent, it probably isn’t that great for a career in the long-run. After all, there is only a finite amount of time you have to build you network before you have to actually leverage your network for professional purposes. But I stayed in Philly because I thought that there was something worth staying for.

But now, as my summer friendships reach their maturity, there is less that’s keeping me in Philly. I feel my friendships have reached a point where revenues have plateaued and additional profits come from streamlining operations as opposed to organic market growth. Although I won’t be selling my positions in them (I’m not sure if there’s actually an equivalent for this in friendship), I don’t feel the need to provide additional capital to my summer friendships to achieve their operational targets.

Every day, we are faced with options of how we want to allocate our energy. In simplistic terms, we can allocate our energy in two ways: into our relationships or into ourselves.

Although life comprises of more than work and relationships (barely though, in my opinion), work and relationships comprise the only real uses of energy in my life. Art, fitness, and music are constants. These activities take virtually no effort on my part, and I engage in these activities regardless of my priorities. There is no real trade-off between my lifestyle choices and art, music, and fitness. The real constraint is the balance between work and relationships. Large decisions including where I reside and settle down are the product of either work or relationships, which have thus far not been at odds but could be at odds in the future.

We allocate more of our energy into our relationships when we see significant potential for growth in our relationships, and we allocate more of our energy into ourselves when our potential relationships do not have the same risk-adjusted yields.

The function of career and time is fairly linear. The progression from analyst to associate to VP is dependent on a set amount of time and a reasonable expection of productivity growth. With each promotion comes with a sizeable increase in total compensation as well as hierarchical importance within the industry. As long as I stay on the path I am on, assuming I don’t accidentally blow up my career, I could get a promotion every 2-3 years. I could become more competitive with additional certifications like the CFA or a master’s degree. When I’m around 28, I’ll evaluate whether I want to go to business school and restart my career in another direction. If not, I’ll be pretty happy working in finance my entire life.

The function of relationships and time is a random variable (pronounced: complete shitshow). Sometimes you could meet someone from the weirdest contexts and get very close to them very quickly. Other times you can just not really click with anyone for awhile. There’s little inheritance you receive from your past relationships. While for careers being an associate at one company allows you to apply for associate roles at other companies, you can’t just make another close friend after you made one close friend. Most conversations don’t really lead into anything. Yet, we still continually meet new people because there’s a chance that we could make a friend. There are a few interactions that translate into something meaningful, and that makes all the difference.

Investing in your career is diversifying across US treasuries and some large-cap dividend fund. Other than a few hiccups onset by a recession here or there, the growth is steady and constant. You can’t go wrong by investing your career, but there are opportunities that you might be missing out on because of its “safe” nature. Investing in your relationships is like dumping a quarter of your savings into a pre-revenue frontier tech company with completely unproven technology. If it works out, the reward is immense. It has the ability to convince you life is meaningful, even for a little bit. If it doesn’t work out, it sucks, but it’s not the end of the world. There are more opportunities in the future.

Relationships are high beta investments. They are only worth it if the expected emotional value of its future free cash flows are better than those your career can offer.

Modern portfolio theory suggests that we should allocate along the efficient frontier, which represents the optimal allocation between risk and return. Our immediate investment opportunities are presented to us through our immediate surroundings. We can perceive the potential growth for each friendship from how quickly we perceive feelings of intimacy forming through random interactions. If a certain threshold of intimacy forms without initial investment, we could throw in a Series A and spend time intentionally outside of random interactions and turn to low-level interactions through meals or drinks. If intimacy continues to grow, then we can add additional investments into the friendship with a higher valuation through higher-level social interactions like trips and music festivals. If, at any point, the formation of intimacy slows, we lower the valuation of the friendship and stop adding additional capital.

Although virtual communication has made significant progress over the past year, I don’t think there’s ever going to be a point where friendship isn’t dependent on interaction in a shared physical space. As a result, we can only make friends with the people who are immediately around us. From experience, most of the friends I make are just a progression of mutual friends. It is quite a limited environment, but it gives a good overview of potential friendships to invest in. At the end of the day, our decision to value our career or relationships depends on our perception of the socioeconomic environment at a given moment. If the small-cap intimacy scene is prime for investing, we invest. If it is not, then we focus on higher-yielding investments on a risk-adjusted basis like our career.

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