Invest in Social Capital

social connection Sep 15, 2021

Living longer brings fears along with benefits. A leading fear is running out of financial capital. Nearly half of Americans cite running out of money as their chief retirement concern. Fortunately, our society has created better tools for managing financial capital with the availability of online advice, money management software and wealth advisors.

Financial capital increases wealth span – or number of years living with financial security – but it’s not the only capital we should be focused on to make the most of a longer life. Social capital – the value of friendships – should be given at least as much focus in our age of longevity.


The Case for Investing in Social Capital

A social entrepreneur I know sees poverty not as the lack of financial resources but as a lack of relationships. As we age, should we perhaps be equally as concerned about running out of friends as running out of money?

Sociologists define social capital as the networks of relationships among people who live and work in a particular society that enable that society to function effectively. Investments in social capital help us individually, but they also help our society more broadly. When two people become friends, they are not just able to support and help each other; they are in a position to help each other’s friends. Therefore, relationships compound to positively impact the community more broadly.

The personal benefits of social connection are significant. Research has shown that friendship not only provides emotional sup­port, but also influences our physical well-being and longevity. In her book, Growing Young: How Friendship, Optimism, and Kindness Can Help You Live to 100, Marta Zaraska shares that a strong support network of family and friends lowers mortality risk by about 45%. On the flip side, loneliness has been found to be as harmful as smoking over a pack of cigarettes per day, and can increase the risk of premature death by as much as 30%.


Playing social sports, like tennis and pickleball, can help to make friends



Challenges with Growing Social Capital as We Age

Making friends can be difficult as we get older. One reason is a function of time. Teenagers spend about 30% of their time connecting with friends outside of family. With three teenagers at home, I find this percentage to seem low. In contrast, people in middle age only allocate about 4% of time for friends outside of family, and retirees about 8%.

And time matters in making friends. Researchers indicate that it takes about 50 hours to move from an acquaintance to a ca­sual friendship, about 100 hours to call someone a friend, and over 200 hours of togetherness to become a best friend.

Shifting geography of friends is another dimension. With increased mobility and economic opportunity, people are less likely to call one place home for the duration of their life. Each move triggers a change for the person moving as well as the people who are left behind. It takes effort to recreate or rebuild social networks.

In the past, extended family increased one’s social capital, but, today, fewer families live closer to each other. My wife’s and my extended families are spread across two continents, and a visit to see parents or siblings requires a plane flight. One solution offered by David Brooks in The Atlantic article, The Nuclear Family was a Mistake, is to nurture local friendships to create a “chosen” family to supplement our extended family wherever they may live.

Plus, as we get older, friends invariably pass away. My dad has lost a handful of his closest male friends over the last several years. These voids are hard to fill.


Physical design elements, such as front porches, can help stimulate social connections and grow social capital


The Right Place is an Investment in Social Capital

Social capital is difficult to measure, but it varies by place. According to think-tank SolAbilty’s Social Capital Index 2020, Scandinavian countries, such as Iceland, Norway, and Sweden, lead the world in social capital, while war-torn spots in the Middle East, like Iraq and Afghanistan, rank among the worst. Within the United States, Utah, Minnesota, and Wisconsin rank among the best states, while Louisiana, Nevada, and New Mexico score the lowest.

Typically, however, the dynamics of the local neighborhood matter most. We are likely to be shaped by those who live around us. If the prevailing culture is one of hospitality and outreach, we are more likely to reciprocate.

Neighborhood design elements matter. Areas that have spaces to congregate and connect – called “third places” – such as parks, coffee shops, libraries, etc. help to build social capital. In our area in Texas, Friday night high school football games bring people of all generations together.

Simply choosing the right place to live for you can be a significant investment in social capital.


Can You Be the Warren Buffett of Social Capital in Your Neighborhood?

Flo Macklin might be the Warren Buffett of social capital in our neighborhood. She started the local library, secured land for a local park and volunteered for Meals on Wheels for over 40 years. She was nominated and sent to Washington, D.C. to receive the Jefferson Award given to “ordinary people who do extraordinary things without expectation of recognition.” It is considered the country’s top honor for public service.

She collected a close group of friends, too.  She was interested in everyone and everything and believed in never turning down an invitation.

She recently passed away at age 93. It’s not a leap to bet her significant investment in social capital helped fuel her long life.

So, keep social capital in mind when you next review your financial investment statement. It may be a value that is hard to quantify, but it may be the more important type of capital for increasing the odds of a long, meaningful life.

Ryan is an expert speaker in the aging industry. Want to have Ryan speak at your event? Find out more.



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