One night about 3 years ago we were taking some young men on a camping trip. We loaded our backpacks into some canoes, and the sun had just gone down, it was pitch black, there was no moon. We had to get across a lake and back into a canyon to our camp spot.
On the other side of the lake, near the mouth of the canyon was one red light. It was the only way to visualize where we needed to go. As we worked our way across the lake in the dark we continually monitored our direction by keeping our eyes on that one red light.
For any kind of investing we are doing we need that same kind of clarity as to our goals.
Financial goal-setting is the key to building wealth. Studies have shown that, at every income level, people who set goals and are “planners” are more successful financially, and feel better about their financial situation, than those who do not plan ahead. Financial goals are like the itinerary receipt for a plane trip. They tell you where you want to be in the future, how much the “trip” costs, and an estimated time of arrival.
Do you have financial goals or are they merely dreams? A dream is vague like “I want to send my child to a good college,” or “I want to be comfortable in retirement.” A goal is very specific with a date and dollar cost. For example, “In four years, we will save $12,000 for a car” or “By the time I am 60, I will have $250,000 saved to be able to afford to scale back to part-time work.”
How do you set a financial goal? Write the goal down by answering the questions who, what, when, where, and why? Since this is YOUR goal, begin your goal statement with “I/We”. Then state exactly what you want to accomplish. Include specific dates in your goal statement and state exactly what you will do to achieve it and how (e.g., save $5,000 annually in an IRA). Keep re-writing your goals until they are specific and measurable.
[https://njaes.rutgers.edu/sshw/message/message.php?p=Finance&m=124]
I've had the privilege of interviewing some very successful investors. There are some common themes I see in them, including:
1. they used what resources they had to get started 2. they had a goal to achieve a certain level of financial growth 3. they stuck with it and pushed through the hard times, they were very determined
In another report they stated How the Ultra-Wealthy set Goals. Here are 4 things they stated.
1. Spend less than you earn.
61% of survey participants thought wealth preservation was extremely important – it was the #1 goal. The ultra-wealthy do not want to spend down their principle, but preserve what they made. You can have the same mindset. As you earn, spend less than you earn. Moreover, find ways to not dip into your savings so you can preserve your wealth. That will help preserve and grow your wealth.
2. Implement a long-term savings plan.
Those with $30 million in investible assets don’t simply live for today. They’re considering their financial situation in the distant future. You can also take a long-term view of your finances. Are you saving enough to enjoy your golden years? If you’re not there yet, it’s probably not too late to start. Create a long-term savings plan that will work for your situation.
3. Create an investing plan to match your risk tolerance and time horizon.
The ultra-wealthy think about multiple generations. Their investment decisions reflect that longer-term outlook. In fact, some investments may not play out for many years. You can do the same thing. Make sure you pick investments that match your risk appetite and time horizon. The longer-term your horizon the more assets you can save and grow.
4. Get educated about financial planning as it relates to your situation.
Education is the 2nd most important goal for the ultra-wealthy. That includes financial education. In a sea of ever-increasing options, they want to know the best fish to catch – and that happens through education. Much of that education is available to you as well. Whether it’s through seminars, YouTube, podcasts, blogs, or good old-fashioned books, you can learn many of the same lessons the ultra-wealthy do about finances.
https://republicwealthadvisors.com/ultra-wealthy-financial-goals-how-it-helps-your-goal-setting/
Setting specific goals and sticking to them with a passion and adopting the behaviors of other successful people are key activities to helping each of us accomplish what we want.
Thinking back to that one light that kept us focused while crossing the lake at night; our goals have the same power to focus our energies on those activities that will take us to our destinations.
Thanks for joining, and until next time: reach for your Gold Through Goals.
