May 7, 2017
Welcome episode 5 in the steps to success series!
This week we chat about the ‘building blocks’ of your vision, which are goals.
You might really like doing goals, or you may hate doing them, either way most soon end up on a piece of paper in a draw which we find when we move houses. New Year Eve goals are typically treated in the same way. We say we want to lose weight, start saving or investing, generally anything we can think of to better ourselves. The trouble is that these aren’t really goals, they are just good ideas. Also, arbitrary goals that don’t align up to our vision typically fail to be achieved as where is the motivation to keep going at the first sign of resistance.
This is why having your vision and knowing what you want is so important. You can’t achieve something if you don’t know what it is. As soon as you know what you want though, you can hone your inner GPS to get it. This is where goals come in, they will be your map or navigation system.
For every vision that you have, you need to put a goal against it.
Last week you took an inventory of seven areas of life and how you want each to look. This allows one of the best ways of achieving your vision in the following steps:
Setting Goals is how you fill in the gap. Just remember, nobody
is going to make your dreams come true. But action on your goals
So how do you set these goals once you know what you want?
I am sure most of you would have heard of SMART Goal. If not, SMART is simply an acronym on how to help define and write a goal. The summary of this can be see below:
This is where knowing exactly what you want to achieve really helps as the more definite your vision is, the more details you can use when defining your goal.
This system of setting goals really helps. It turns what is a ‘good idea’ in to an actual goal. We all have good ideas about things we should or want to do. For instance, a lot of us say we want to lose weight. This is a great idea, but it isn’t a goal. A goal would be closer to ‘I will lose 10kg by exercise and diet in 12 months to be healthier’. This would be the overall goal. From there you expand on this by the activities that you will need to do in smaller chunks to get to the goal of losing 10kg.
This really works with anything. Instead of saying “I want to be rich”, put this in to a goal. Define what rich means to you and then make it SMART. If having $1,000,000 in investments is your idea of being wealthy and you know when you want to achieve this by; set a goal! This would look like the following: ‘I will invest $1,720pm in to a portfolio of shares for 10 years that get an average return of 8.5% p.a.’.
If your goal is to achieve financial freedom, you need to decide what this looks like for you! If your living costs are $60,000 per annum, what investments do you need to fund this? This is where it gets trickier, as to work out your goal of ‘financial independence’ has a lot of additional layers. We will spend a whole episode on this, how to work out what you need in income, working out what asset base you need to get this done, then working out how to do this in a timeframe.
Now it comes time to do an action plan on your goals. The last part is the hardest, especially if you don’t know how to. However, what you are trying to do is likely what someone else has done, or knows how to do. So you can ask for help from them. Isaac Newton (guy who discovered Gravity) used a metaphor from a philosopher of the time when asked how he achieved so much in his life: ‘If I have seen further it is by standing on the Shoulders of Giants.”
You need to use knowledge that already exists to create your action plan to achieve the goal. Just remember to break each long-term goal in to smaller achievable ones. It is easier to eat an elephant one bite at a time.
Recap: For each of your ideal visions, you need to set one goal. Set this as a long-term goal and then break this down in to yearly goals, monthly goals, weekly goals. You get the idea! Then you need to put an action plan in to place on how to achieve this.
So say you wanted to save $5,000 in one year, this would be 12 goals of saving $417, or 52 goals of $96, or 365 of around $14. The action plan would simply be to transfer $14 a day in to a savings account.
Best ways to keep goals: Share it with one other person who will keep you accountable. It is best to find one other person who also has goals and you each do a weekly goal check in. Sadly, it is a lot easier to lie to ourselves than others. In studies that have compared groups who thought about goals versus those who have someone to keep them accountable, the first group only achieved 43 of their goals, compared to 76 percent of the second group. Back to the previous example, if you wanted to save $5,000 in the year, give updates to someone if you did manage to save $96 per week.
One of the best bonuses from this is an Increased happiness from working towards goals! Achieving them is great, but working towards them and planning them gives bigger dopamine releases, studies have found. This is why setting goals is really important as well, not only to achieve your vision, but to enjoy the ride along the way.
We will run through the most important financial goal of independence in another episode, but for now: