Bad Neighbors

"Nitai the Arbelite would say: Distance yourself from a bad neighbor, do not cleave to a wicked person, and do not abandon belief in [Divine] retribution". Avot (Ethics of the Fathers) 1:7
A bad neighbor doesn't mean a bad person, s/he's just bad for you. The bad neighbors are those people in your life who bring you down or get you in trouble. They might be the kindest or smartest, but for you they're a bad influence and a bad neighbor. From those people you should stay far away from, distance yourself from them.
Then there are wicked people, bad people. You shouldn't distance yourself from them. Actually you should talk to them, teach them, reach out to them, help them become good people. Just don't cleave to them, don't become too friendly or you might be influenced by them.
One more thing to be careful with. If we're hanging out with the right people, doing the things we're supposed to be doing. And we're reaching out to those around us, Nitai is telling us, don't become too sure of yourselves, never think you can no longer make mistakes, "Never abandon belief in Divine retribution". Remembering this will always keep us in the right direction.