Why goals are necessary to achieve financial independence?
Ok, we are at the stage when we decided to go for it! To take our lives in our hands and change that pattern that keeps us in poverty or living from paycheck to paycheck. Great, but did you even asked yourself - Why?
Simple question, isn't it? Why I want that financial independence? What I want to my life looks like for 20 years from now on? What do I want to do in the future? What kind of activity I would like to perform? These and many more question you just have to ask yourself, my friend, before you even start.
If you envision yourself laying on the beach sipping your favourite cocktail and doing literally nothing is what you really want to do, then believe me, you are in the biggest mistake.
We are just not created to it. We need to work, fulfill our dreams, be ambitious and feel that we mean something. So the quicker you will set your goals the better for you.
Why is that important to set a goals in general? Well, building a wealth takes a time, a long period of time. It is very easy to loose your motivation and purpose.
Like any activity, be it growing a business or learning a new skill, you need to decide early on what your long-term objectives are.
It’s exactly the same when you are building wealth, it is important to set financial goals.
If you know what your financial goals are, you can start working to accomplish them and working out what those goals are is the very first step.
Goals, whether they are short-term or long-term will help you to stay focused and motivated, because they will be constantly reminding you where you want to go and why.
I would like to introduce you to the concept of S.M.A.R.T goals, as it is very effective and led to achieve thousands of people all around the world their financial goals.
First time I came across on S.M.A.R.T goals concept when I listen a Brian Tracy’s podcast called ‘’Eat that frog’’. He mentioned that all goals should have a specific structure and meet 5 necessary rules.
S.M.A.R.T. stands for specific, measurable, achievable, relevant, and time-bound.
1. S is for Specific
Good goals are not ambiguous. Rather, you need to have a clear, concise goal that you can set your sights on. For example, rather than saying “I want to have a better body” you could say “I want to lose fifteen pounds this summer”. You can see how the latter example is much more specific, and, therefore, is a better goal.
2. M is for Measurable
Tracking the progress of your goal is an important part of keeping you motivated. It allows you to set milestones that you can celebrate when you meet them and reevaluate when you don’t. It’s a good idea, then, to always have some aspect of your goal that can be measured and evaluated.
3. A is for Achievable
Far too many people fall into the trap of setting impossible goals for themselves. While impossible goals may push you forward for a while, you will almost certainly end up giving up on them at some point in the future. Instead of impossible, your goals should be challenging yet achievable.
Before you set a goal, make sure that you can actually envision yourself achieving it.
4. R is for Relevant
Not all goals are as worthwhile as others. Unless your goal is relevant to your overall plan for your life, achieving it may not accomplish anything. In order to ensure that your goal is beneficial, make sure that it is worth your time, make sure that achieving it will provide positive benefits to your life, and make sure that this goal aligns to at least some degree with the other goals you have.
5. T is for Time-bound
Effective SMART goals must have a target time attached to them. For example, rather than saying “I want to start reading more books” you could say “I want to read twelve books in the next six months”. You can see how the person who set that second goal will be much more motivated to succeed since they have a target date in mind for their goal.
As you see setting a goal don’t have to be very complicated. You just have to ask yourself mentioned earlier question and think about your future really serious. I advise you to write all of your goals down on a piece of paper and attach them to the most visible place in your room, just to not lose a focus and motivation.
You can also divide your goals on 3 categories: short-term (<1 yr), mid-term (1-5 yrs) and long-term (>5yrs).
It’s easier to achieve what you already set when you know, what is a time-frame (according to rule Time-bound) for each of them.
When considering how to write SMART goals, it’s a good idea to write down each of these criteria then write a sentence or two about how your goal fits each one. If you can write a goal that fits each of these criteria, you’ll have a SMART goal that is sure to be much more beneficial than a standard goal.
I am very confident that if you approach to setting a goal with that concept, much more likely you are going to achieve them.
In case of building a wealth or financial independence goals are the first step, next one is get to know what is your starting point, Net-Worth. I mentioned a bit of it in a previous article so feel free and check it out.
Third step is Budget. In my opinion every person should have a budget, especially now, when we struggle during a crisis. Budget is something that will protect you and your family before uncontrolled spendings and help you produce financial surplus.
As you may already realized our next subject in the next article is BUDGET.
Folks, if you have your own ideas about goals and how to set them or you noticed that there is area that I haven’t mentioned about, then, please share your thoughts with us.
As always I am gonna share with you my proposition of books that you have to read to learn and grow.
If you want to get to know more about this subject I will leave my proposition of book you must read:
- "Creating your best life" by Caroline Miller : https://amzn.to/2Ta14U6
- '' Goals!'' by Brian Tracy : https://amzn.to/2HkZI6m
- ''Your best year ever'' by Michael Hyatt: https://amzn.to/3ocLO7i