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Last time, we talked about the various types of goals you can set.
Today, we’ll use that intel to come up with a quick-and-dirty goal-setting strategy that you can take advantage of immediately.
Let’s use a hypothetical example to illustrate how this works.
Suppose you’d like to retire by age 60. What’s more, you’d like to have $1 million in the bank at that point.
Recall from last time that we talked about the following goal types:
- End goals
- Outcome goals
- Means goals
- Provisional goals
- Execution goals
There are other types, but these will suffice for our purpose today.
Our END GOAL is to retire by 60 with $1 million in the bank.
This is our expectation. We’re unwilling to compromise on it. To that end, we’ll make a commitment to achieving it.
It’s also our OUTCOME GOAL. Recall that these are things we’d like to accomplish by a specific time or date.
Before we can create an actionable plan, we need to brainstorm MEANS GOALS. These are the potential routes we can take to accomplish our END (or OUTCOME) GOAL.
Following are a few possible MEANS GOALS:
- reduce our recurring expenses and invest more money each month
- start a side business and funnel income into our investment accounts
- get a higher-paying job while maintaining our current standard of living
- downsize (move to a smaller home, sell unnecessary possessions, etc.) and put the proceeds into our investment accounts
Let’s pick the first two options.
These will serve as PROVISIONAL GOALS. They’re stepping stones to OUTCOME GOALS, so we can use them to set benchmarks.
For example, suppose we cut our monthly expenses by $400 (option #1).
That’s nearly $5,000 a year extra that we can invest toward meeting our retirement goal.
Let’s also suppose we start a side business (option #2) that generates $2,500 in profit each month (after taxes).
That’s another $30,000 a year extra that we can funnel into our investment accounts.
These PROVISIONAL GOALS form a roadmap. They give us a process to follow month after month, and year after year. To that end, they also serve as EXECUTION GOALS (activities we do by routine).
As long as we stick to the roadmap, we can be confident that we’ll reach our goal.
Will investing an extra $35,000 a year allow us to retire at 60 with $1 million in the bank?
It’s hard to say. It depends on our age, current financial picture, how much we’re already saving and investing, and our expected rate of return in the years to come.
That’s just a matter of math, and there are retirement calculators online that’ll do the heavy lifting for us.
More importantly, it’s beside the point.
The point is that we can leverage the various goal types to come up with a practical, actionable strategy that turns our aspirations into achievable objectives.
And you can take that to the bank (Sorry. I couldn’t resist).
I know this was a long email. But hopefully, it’ll help you to create goals that produce remarkable, inspiring results in your life!
Talk to you soon,
Damon