Welcome Back today we are going to talk about financial goals. Last time we talked about what are the parts of a goal. We use the SMART mnemonic which is
- Goals need to be Specific.
- Goals need to be Measurable
- Goals must be Attainable
- Goals must be Relevant
- Goals must be Time-based
I also suggested that the following points are also important
- Goals need to be Written.
- Goals must be Reviewed
- Goals must generate some Passion.
So let’s apply these traits to our financial goals.
Most people say they want to make more money. That’s easy to understand because we all would like to make more money but “I want to make more money” is a dream not a goal. The dream is not specific or measureable. It may be attainable but what would mark success, a cent, a dollar or $10,000? It would be relevant because we all want to make more money. It’s not time-based because it has no completion date. The goal hasn’t been written down. It isn’t reviewed or read daily. And although some people can get excited about making more money in the short term it does not generate the passion you will need to be successful long term. After adding it all up, it fails the goal test and so falls into the dream or wishful thinking realm.
So let’s take the goal we mentioned the last posts which was “I have a $10,000 a month of income by December of 2017”. How does it stack up to with our SMART mnemonic? Well it is specific, you can measure it, it is an attainable goal because other people make this type of money, it is relevant because you may need to make that much income and it is timed based. So it is a real goal.
But to achieve it you will need to break this down. We do this by breaking the goal down into smaller parts by asking some more questions
- How much money do you want to make?
- This is done as we have answered how much we want to make.
- When do you want to be making this new income?
- We have a specific date
- Can you earn this with your present income source?
- Is this from my present job?
- Will I need to create a second source of income?
- Is this profit or income
- Does it include income from investments?
- Do you have investments?
- Should they be part of my long term plan? HINT: the answer is yes
So the base statement “I have a $10,000 a month of income by December of 2017” may be expanded into the following statements like this
I have a $10,000 a month of income by December of 2017.
I am creative and make this income from a variety of sources
I make $6,000 a month from my job.
I make $3,000 a month with my websites.
I make $1,000 a month from consulting.
I do this with ease and my earnings are consistent.
You could also ask the 6Ws questions of who, what, where, when, which and why
How you spend this money could be also part of your financial goals. You could add the following statements
I am debt free.
I invest 1,000 per month in other business that create passive income for me.
I fully contribute to my 501K (or RRSP)
So that’s the financial goal portion. Are you getting the idea? Have you written them down? PLEASE, PLEASE, PLEASE if you are serious about your financial future take action now and write them down.
Next we will talk about personal improvement goals,
PS you are WRITING your goals down, RIGHT