“If you don’t know where you are going, you will probably end up somewhere else.”
-Lawrence J. Peter
When I was younger, I dismissed the importance of goals. Goal setting seemed like a great academic exercise, one you performed with pen and paper but which didn’t matter much in the “real” world. I’ve since seen the light and have realized that goals are not only important, they’re easily the most powerful driving force for success.
Goals create the focus and vision we need to get the most out of life. They’re the difference between wandering lost, aimlessly in the wilderness, or driving straight toward your dreams with the red hot intensity of a heat seeking missile.
Let me break it down.
Have you ever walked somewhere looking straight down at your feet as you take step after step. Probably not because you’d quickly stray from your desired destination. Try it sometime in the safety of a playground or your own back yard. You’ll be amazed at how quickly you’ll veer off course.
To walk straight you need a reference point. You need a fixed point in the distance. That’s why we walk with our heads up.
And that’s exactly what goals provide. They provide a fixed point on the horizon that keeps us from wandering off course. Working without goals is like walking with your head down. You’ll never end up where you want to be.
Solid, definable goals are the keys to financial freedom. There’s no way around it.
Perhaps that’s why best-selling author Dr. Thomas Stanley, in his book The Millionaire Next Door, discusses the importance of goals in achieving financial success.
According to his extensive survey of American millionaires, the vast majority of millionaires set financial goals, helping to explain why these people became millionaires in the first place!
“How am I going to live today in order to create the tomorrow I’m committed to?” – Anthony Robbins
By providing long term benchmarks, goals help shape our daily decisions in a way that encourages positive financial outcomes. And like a map, goals keep us from going down financial dead end streets.
When we see, for example, that spending $159 on a pair of designer shoes will take us further from our goal of a down payment for a home, we tend to put the shoes back on the shelf.
So how do we set the right goals? How do we create goals that lead to financial independence?
We do it the SMART way. Our goals have to be:
Specific Measurable Authentic Realistic Time limited
Specific
Vague goals lack power. Yes, they sound nice but they do nothing. To have power your goals must be specific. It’s not enough to say, “My goal is to buy a new house.” Try this instead:
“My goal is to purchase a home located in a good school district within 30 miles of my job at a price between $300,000 to $350,000. I will save $45,000 for a down payment and purchase my home within 3 years.”
Now that’s specific. It offers a clear blueprint for success.
Resist, “My goal is to get my financial life in order.” Instead try:
“By the end of this year I will have created a budget that I consistently follow, eliminate my $7,322 credit card debt, and save $2,000 in a savings account.”
It’s the detail that gives your goal life, meaning, and power.
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