3 Ingredients for Goal-Setting Success
When my wife Kim and I packed up everything we owned and moved to California to start an educational business, it wasn’t easy.
We quickly depleted our savings and exhausted our credit cards. We lived in the basement of a friend’s house. At one point we even lived out of our car!
Uncertainty and self-doubt plagued us. We knew what we wanted was financial freedom. But we didn’t know if this new business would enable us to reach that goal.
Many people have dreams of being rich or financially free, but they turn away because the road seems too difficult to get there. Like a future Olympic swimmer who sacrifices time and social engagements to put in hours at the pool, people need a strong clear goal AND motivation to push through the obstacles.
Here are the ingredients you need for goal-setting success.
No. 1: Your Motivation
Rich dad said, “If you’re going to have a goal, you need a strong mission to push you through the process. With a strong mission, anything is attainable.”
Most people say yes when asked if they would like to be rich or financially free. But then reality sets in. The Yellow Brick Road seems too long, with too many dangers along the way. It seems easier to work for money, and then just hand the excess to a broker.
To stay on the road to riches, you must have some deep-seated reasons propelling you forward.
When people ask me why I wanted to be rich, I recite the list of deep “wants” and “don’t-wants” that drove me on. I didn’t want to work all my life, for example. I didn’t want what poor dad aspired for, which was job security and a house in the suburbs. I wanted to be free to travel the world and live the lifestyle I loved. I wanted control over my time and my life.
Once you’ve identified your reason to be rich, you have to decide what your general financial goal is.
No. 2: Your Goal
What is your financial goal? To be secure, comfortable, or rich? Bear in mind that a goal is different from a wish. You may wish to be rich, but that doesn’t mean you’ve ever taken any practical steps to make it come true. If you’ve ever earned enough money to put some aside, you’ve probably invested it with an eye toward security, since you can’t imagine yourself ever getting rich.
On New Year’s Day 1985, Kim and I, along with our best friend Larry Clark, sat around a fire and began writing our goals to become financially free. This was a big multi-year goal and throughout the conversation, a little voice in my head kept telling me that it was never going to happen.
That little voice faded and I turned my attention back to Larry talking about freedom. I realized this was it, this was the goal for Kim and me to achieve our dreams.
No. 3: The SMART Checklist
Just as Kim and I did that winter in 1985, once you’ve identified your financial goal, to be secure, comfortable, or rich, it’s time to create the smart goal.
SMART stands for:
But what exactly do these terms mean when it comes to your goals?
Specific: Avoid vague goals by answering the “W” questions about your goal:
- Who will do it?
- What specifically will be done?
- When will it be done by?
- Where will you focus?
- Why is the goal important?
Measurable: Include specific criteria that will allow you to measure your progress and know when you have attained your goal. Ask questions such as, “How much?” or “How many?”
Attainable: Make sure your goal is something you are willing and able to work toward. Start by asking, “Is this a goal I am really committed to achieving?” If you are not committed, you will struggle with the discipline and change that will be needed to achieve your goal. You also want to make sure your goal can be achieved with the skills and resources you have currently available.
Realistic: You should set a goal that is challenging but that you also truly believe you can accomplish. If you believe a goal is too hard, it will be. If it doesn’t require growth or extra effort to achieve, it’s too easy. You know you have a realistic goal when you feel excited and challenged when you think about your goal. If you feel frightened or overwhelmed when you think about your goal, try to determine how you can break it down into smaller, more manageable goals that progress to the ultimate goal.
Timely: A timeframe is needed to create a sense of urgency. Without a timeframe, a goal becomes relegated to the, “I’ll get to it when it’s convenient” category. Challenging goals are never simply convenient; they require some discipline to achieve. If it were convenient and easy you wouldn’t need a goal in the first place.
Remember, if you start working on your goal and discover that any part of your SMART criteria is either too easy or too difficult, you can modify that part of your goal. Just make sure you keep it challenging but not discouraging.
Once you’ve created your smart goal, the second and probably most important step is to take action.
Once you have those ingredients in place, the only thing left to do is dive in.
One thing my poor dad said almost every day of his life was, “I’ll invest when I have some money.” When pressed to take action, he’d say, “Look, I don’t have time to do anything about it today. We’ll talk about it tomorrow.”
That was his daily reality, and it was his reality at the end of his life.
If your goal is financial freedom, you may want to begin by listening to your words and seeing your future. Ask yourself, “If I keep using these words and thinking these thoughts, at which level will I exit? Will it be poor, middle class, affluent, rich, or ultra-rich?”
If you want to change your plans, the first thing to do is change your reality… your words, and your daily actions.
Your future is what you do today, regardless of your dreams. Take action until you get what you want.
Editor, Rich Dad Poor Dad Daily