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I am not very fond of goals in my work life. I set goals because it’s required as per our performance review process. In my financial life, I do not have any such requirement, here it is my territory where I have all the control. Naturally, I don’t set goals in my personal financial life. But, that’s the way I am. Most of the people I know have financial goals in life.
Which is unlikely given that most of the Americans do not have any goals in financial life. More than 80% of Americans do not follow a strict budget either.
It works for me to have enough savings without a goal or a budget because I save 50% of our monthly income, as soon as they arrive in checking account. We live with rest of 50% of it. It is not easy for everyone to follow. In that case it is very essential that you have a financial goal for which you would strive. Let me ask.
Do you currently have a financial goal?
Do you have a finite number in mind and a defined date in which you plan to hit it? If not, then I’m sorry, but you don’t have a goal. You have a wish, or maybe it’s just a dream, but you don’t have a goal unless you have both a date and a dollar amount.
I once had a mentor that said, “Those that go through life with an unknown goal hit with amazing accuracy 100% of the time.” It took me a while to catch onto exactly what he was talking about, but here’s what he meant by his statement.
Those that have absolutely no goals in life obviously don’t have a road-map for their future. They know that they could really end up just about anywhere. So, when they analyze where they are ten years later, they are indeed on that scale of “anywhere”, which is exactly what their “goal” was, right?
Since they had no goals, there was no way for them to fail, but there was also no chance for real success either.
My friend is currently 27 years old and has a goal to retire in 7 years. At that point, he plans to be completely debt free and have an income of $2,000 a month (after tax) and have $1.2 million in the bank, not to mention a retirement fund of over $150k (which will grow to over a million by the time he’s 65 years old).
This is quite an outlandish goal compared to most, but he has his road-map planned down to the month (and in some cases, each week) and it actually seems quite doable with his many side businesses and projects. If just one of them proves to be successful, he’ll no doubt reach his goal.
So where do you stand on the spectrum?
What is your financial goal?
Perhaps you want to rid yourself of all your debts! That’s a great financial goal! Or, maybe you’d like to earn enough money passively each month so that you can do whatever you want during the day. Or, perhaps it’s much simpler than those.
Maybe you’d just like to make an extra couple hundred bucks a month so you didn’t feel so strapped for cash all the time.
All of these goals are great, but the real question is, when are you going to achieve it and how are you going to get there? Once you set a date on your goal, then you can start working your way backward to see what you need to do each month in order to get there.
For example, let’s say you want to retire with $1 million in 40 years. Instead of just blindly throwing money into the market and hoping that you’ll get there, it would be wise for you to find out what average return you can expect, and with that average return, how much do you need to invest each month in order to get to your financial goal of a million bucks?
Start with the goal, then set the date, and then make it manageable with incremental goals along the way. And don’t forget to celebrate those little goals when you hit them too! Good luck!
Readers, are you inspired to set up your own financial Goals yet? If you have one already do share us so that other readers can learn from it.
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I love setting goals for myself especially financial ones. Of course, not all of those goals get accomplished, but having a goal is like having a map on which you have a destination set out for yourself, you just need to find the right way.
We have many short term goals, but no specific long term goal. It’s just hard to have a big goal for 20 years out. Who knows where we would be in 2033? I’ll think about it more. Thanks
My long term goal is to earn enough money so that I can retire by the age of 40 and live my life thereafter. I work, earn some passive income and save money so as to make sure that I achieve my target as early as possible.
One of my short-term goals is to increase monthly cash flow. I find that focusing on cash flow helps me to focus on both income and expenses!
For me, the first step is creating financial dreams that fit with where you want your life to go.
From there, you then develop SMART goals to help you achieve success and measure yourself against them on a routine basis.
Just arbitrarily setting a goal to save $500 a month is going to be meaningless without the goal being linked to a dream that you have. This is why so many people fail at saving!!!
I seem to be similar to other commenters. I am more focused on short term goals with the expectation that it will turn into the long term goals I have generally in my head.
This kind of reminds me, though, of a recent conversation I had with my dad where he was telling me to relax a bit in my money making/saving schemes. He shared that he has saved so much that his adviser is telling him to spend more and relax some. I guess that is the other end of not having a specific goal, you don’t know when you’ve hit a level that will sustain you.
My financial goals are to reach 20% returns in the stock market this year, increase my passive income 25%, and start 2 new side hustles that are net positive by the end of the year.
I used to have a pretty detailed career plan, but some things changed and I re-evaluated how much time I wanted to spend at work versus at life, so I have scaled that plan back quite significantly.
I like setting goals for myself, but I’m not great at following through with them. If anything, they seem to be more a guideline in which I gauge my progress. If I’m moving in the right direction, then I count that as progress.
I am a very goal oriented person and have very detailed goals in all areas of my life, including finance. My main financial goal is to become financially free in 10 years with at least $10 million in investment assets. I have dozens of smaller goals that are designed to get me there.
It honestly starts with setting goals. You can’t get there if there is no destination. I’m pretty much living the dream so I have to think about this one a bit more.
Right now our long term financial goals are to be able to not have to work by the age of 40 or before. We want to have our home paid off and have as much passive income coming in as we did when we both were working. About 5 million is the goal and no debt. We have a lot of short term goals to help reach the long term ones.
My ultimate goal is to reach a financial independence. Since I know that I am too late in saving enough to reach this goal, my goal how to reach it is to learn how to make my portfolio generating enough cash although the principal I have is smaller. So how a smaller portfolio can create an income so I can retire? I believe dividends and options can do that for me. So my next 20 years goal would be: save, invest and learn how to trade options to generate cash. So far I am successful in trading options (generating in average 300 a month as you may see on my website) and investing in dividend paying stocks. Now I need to boost it.
My goal is to reach $3,500,000 by the year 2045. I keep close track of progress annually to assure we are on pace.
I have to confess, I’ve been guilty of vague financial goals due to which I haven’t been able to channelize my savings to more rewarding investments. It all changed when my financial planner talked to me about securing my retirement saving with precious metals backed IRA. I have the peace of mind of having diversified by portfolio with gold and silver bullion, and hedge it against volatility in the stock market.
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