In story ‘Alice in Wonderland?’ at one point Alice asks Cheshire cat which road to take, cat asks where she wants to go. Alice, replies she “doesn’t care where”, he replies, “then it doesn’t matter which way you go”- she ends up wandering aimlessly in her travel.
I wonder how many of us are doing the same, living without goals –wandering aimlessly.
In past I have made mistakes, mistakes that shaped my financial future. Looking back I wish I had the same amount of knowledge in my twenties as I have today, I would have been multi folds richer by now (or so I would like to think).
SB in his post about goal has nicely said “Those that go through life with an unknown goal hit with amazing accuracy 100% of the time.” and I can’t agree more on this.
Since my first job I had always been good at spending less than what I earned, stashing the rest but it never occurred to me that stashed money should grow.
I mean literally for 8 years I have the money saved in my every day bank account earning 0 % interest, it never occurred to me that I should move this to high income earning account. I am not talking about few thousand dollars but a good 60k in average during this period.
Inflation reflects reduction in purchasing power of dollar. If your country has an inflation of 3 % per annum, leaving money in non-interest paying bank means you have lost 3% value of your cash.
If I take this into consideration, Australia had 3% (average) inflation during this period, I was losing ~$1800 per year, that’s the money my bank was banking on while I was losing it.
It is dumb, I know, but in hindsight this has happened due to the fact that I never decided to set any financial goals, the fact that I could save money was no credit to me, I was single and my parents have brought me up teaching the value of money –living within means.
Either its investment or saving, just like anything in life, without a goal it’s hard to make intentional change. Trying to achieve results without setting a realistic and measurable goal leaves us on the slippery slope, our impulses pull us back to where we started.
Like getting fit, if someone has a goal of competing marathon, they would have better daily attendance at gym than someone who decides to run daily without a goal, that set-goal—or lack thereof—determines whether we’ll follow through with exercise or not.
In a way I feel blessed to be in a situation where I have the resources and mindset to spend less than what I earn. If you are in debt, the primary goal is to save and get rid of debt, become a saver before an investor.
So readers, if goal setting is so important in life what can we do to make them effective and actually achieve them.
Everyone talks about the importance of goal setting and how rich life would be to live on purpose, bet you would have heard of this before, didn’t you – but there is also other side of the problem that is rarely spoken.
If not setting a goal, causes us to live a mediocre life, setting a goal that’s unrealistic causes us to stress, strain and eventually be unmotivated.
It’s better not to set goals than a series of goals written and never achieved.
Japanese way of building will power
When you have series of failures and you still take on the task of goal setting, your body goes through internal conflict. At first you will feel the stress, eventually your body gets used to it. In the next stage you would get used to setting goals, but your mind doesn’t takes it seriously and learns to ignore them. You will lose accountability with yourself and will potentially carry on this week will power in other areas of your life.
So how to handle this beast…. By eating one bite a time
In Japan, samurai’s are trained from the age of 4, they are asked to jump on bamboo shoots every day. Since they do it as ritual every day, they develop the potent to jump higher as the bamboo grows.
Go as far as you can see, when you get there you will see further.This is the way forward in setting our goals, for example: if you currently spending more than you earn, aim to make it break-even. Once you are at ease with this goal aim to save x amount of dollars.
In the periods, when I had money in bank, I did had a goal “I need to do something with this, I need to invest this”- this is the goal that I always had in my mind, nothing written to paper or was there any action plan for it.
Written Goals are representation of our aspiration, they make us accountable to our decisions. A written plan makes us accomplish larger intimidating goals into smaller achievable steps, knocking off smaller achievable goals provides real motivation and contentment in life.
Goal without plan is just a wish.
So next time when you put your pen to paper think small chunks of bigger goal, build confidence and willpower on your way to successful goal achievement. Your goal should have a plan, with dates and deadlines.
The opposite can also kill.
Setting goals that are too easy is counter productive, lack motivation and are boring. Unless we set our goals outside of comfort zone, we won’t find them compelling and follow through.
Your goal should stretch your willpower, just like going into gym, a successful sports person would start counting crunches from the pain point, and so should your goal.
Uncertainty is the mother of screw-ups
There are many reasons as to why anyone don’t want to set financial goals, it could be ignorance, fear of losing money or uncertainty. For me it was uncertainty, I was uncertain as to what I should do with the money, I considered buying an investment like parking lot in city, shares and so on and so forth but never actioned on anything.
If I were to set a goal of beating inflation, for time being, I would have parked the money in high interest yielding account not only that if I were to set a goal it would have made my creative juices flowing to achieve it.
Clarity is the hidden force behind all successful people.
— Piggy Wise (@PiggyWise) October 1, 2014
You are wasting time if you have goals like “I should earn more” or “I should start saving money”. There is no clarity in these goals, how much you want to earn? or save? and more importantly how do you know you have achieved your goal?.
Your goals should have a written number, date and a plan to achieve it.
Before you climb on a ladder check which wall the ladder is on.
Financial goals are the driving force, they make us explore and be creative in achieving what we have committed. A goal that is wrongly set causes stress, fatigue and disappointment. Know where are you are in life, if you are struggling to save money there is no point in having an investment goal.
Out of sight, out of mind.
We are beings of habit, success or failure of a person is cumulative result of their habits. Remember if you do it one day it’s an activity, if you do it x days it’s a habit.
I purposefully said x instead of 21 days or any number, I don’t think there is a fixed number for all, it’s only you who knows the time it takes for you to transform an activity into a habit.
Series of thoughts build action, series of actions build habit… and habits build character.
When you start out to set goals, it’s easy to achieve this for a day or two until the old routine habits takeover.
Make sure that you start your day by rewriting your goals every day in the journal. When I take up new habit towards my goal, I have a reminder that’s set on my phone during the time of susceptibility.
For example if you have a goal to spend less than last month, set up a reminder during most vulnerable times like lunch, weekends or by location-based, your reminder should define the purpose.
If your intention of saving is to retire from corporate life, then have a reminder in lines of “A dollar spent today is a day away from retirement”.
This is an exact mantra I had learnt few years back and now it’s on autopilot, every time I have a craving to buy new gadget.
Whenever I have to spend money I would always ask myself do I really need this now, because I know every dollar I spend makes me work a day extra causing me to spend more time at desk working for someone and away from my daughter.
How about you what’s your mantra to keep you off from spending?
So readers before you move on to next post or where ever you are heading, remember that
What you get by achieving goal is not that important compared to what you become to achieve it.
If we take all the wealth away from rich, they will regain what they have lost in no time because that’s what they have become.
Don’t forget to take some ‘action‘ to get the result you want, take time to set goals and an action plan to achieve it.