Setting financial goals need not be difficult or technical.  Many people cringe at the thought of setting goals (myself included).  But, if you want to set yourself up for success, you will need goals to work towards.  It’s that simple.

To get started you will need a paper to write on, a pen, 30 minutes of your time and a quiet place.  Make sure there is nothing nearby to distract or interrupt you.  Set the timer, then relax and allow your mind to wander… and to dream of your future.  Write down what you see, what you are thinking and what you feel.  What is it that you would like to have most of all… write your thoughts and ideas.  Allow yourself to dream BIG.  Continue writing your thoughts and ideas as they come to you.  Do not pay any attention to the sequence.  When the time is up, get your notes together, you now have the information you require to make a plan and set some goals.

Why Is Day Dreaming Important To Setting Your Financial Goals?

We all know that setting goals is important.  By setting goals, you take control of your life’s direction.  So how does Day Dreaming fit in?

Research shows that if you can daydream of being successful at a certain task you are more likely to reach your goal.   Daydreaming is said to be the “exercise for your mind”.  Visualization with a specific purpose allows your mind to form a strong mental image of a future event or an outcome you desire so you can prepare properly for it.  Successful athletes, entrepreneurs, actors, musicians and many others use visualization to enhance performance and achieve their dreams. 

Why I Believe Setting Financial Goals Is Like Going On A Holiday

Dr Stephen R Covey said “Begin with the end in mind”.  So, let’s get started.  

1.  Choosing your Destination / Set Your Long-Term Goals

(A Holiday) - If you were to go on a holiday you would make a list of places you want to visit depending on what you want from your trip, you would consider your budget, the time you have available, the hassle-factor, the risks and how it would make you feel ie the experience to name just a few.

(Your Financial Goal) - Similarly, when considering your financial future ask yourself:

• What assets do you want to own?  Do you want real estate, shares, cash etc. 
• How many years would it take you to build your investment portfolio
• How actively involved can you be in building your portfolio
• How much time do you have available outside of your primary job, do you have a family and children perhaps

Write down your answers to these and other questions you might have.  Use your notes from earlier as a guide.  These will become your Long-Term Goals.  Your long-term goals can be 1 or 5 or 10 years or more.  The duration is not as important as focusing on what you want to achieve at the end of this period.  Be realistic.

2.  Research your Destination / Learn About Assets

(A Holiday) - Some of the reasons why you would research a holiday destination before travelling is to familiarize yourself with the climate, the activities, any travel restrictions, any medical precautions you might need to take, the currency, the culture etc.

(Your Financial Goal) - So, now that you are wanting to start an investment portfolio:

• Do some research in the different types of investments. 
• What are their benefits and what are the risks.
• How much of your own money would you need to get started
• What are the various taxes that you would need to pay
• Are they any other costs associated with owning a particular type of asset etc.

Choose the asset that is right for you and your circumstances.  Can you see yourself in the future enjoying and sharing them with your loved ones?  The more research you do the better your chances of success.

3.  Get Your Documents In Order / Identify The Gaps

(A Holiday) – Travel documents are required when you travel.  Depending on whether you are traveling in your country or overseas.  Some documents at the top of every list include, a form of identification like a driver’s license, a valid passport, banking essentials, travel credit cards, insurance visas, tickets, reservations, itinerary etc.

(Your Financial Goal) - Some of us might need some form of Education and Financial literacy to manage an investment portfolio. Think of them as your navigation tools - your GPS. 

• Education – do you need to do some learning? It can be formal or informal/self-taught
• Skills – do you need to learn new skills or upskill to manage your assets well
• Knowledge – do you have the knowledge you need to make informed and effective decisions that affect your future wealth and prosperity.
• Know your Goals and Strategy – it is important that you review your goals regularly and adjust your strategy as the situation changes.

4.  Map Out Your Route / Decide What Assets To Invest In

(A Holiday) – Before starting a journey, normally you would check how long it would take you to get from where you are to where you want to be. If you were flying, you would consider the travel to the airport, check-ins, customs etc, but if you were driving you would consider the safety of your vehicle, the maps, fuel, any stop-overs along the way etc. 

(Your Financial Goal) - When acquiring Assets, you must also consider the different actions you would need to take for the different asset classes. 

Real Estate:

• A deposit - normally it’s your money
• Mortgage - usually borrowed from a lending institution
• Term – usually 20 years or more
• Costs & Taxes – inspections, closing costs, stamp duty, insurances etc

Shares:

• Minimum of $2000 to start with (as a general guide)
• Brokerage costs & commissions when you buy and sell
• Easily bought and sold
• Buy and hold for long term or trade them in the short term

5.  Pack Your Bags / Write Your Short-Term Goals

(A Holiday) – When packing a suitcase, you would use all the available space as efficiently as you can, for example: packing plenty of neutral colored clothing so you can mix and match, carry travel size toiletries etc. 

(Your Financial Goal) – To be successful it is imperative that your day-to-day activities are planned to be efficient and are aligned with your Long-Term Goals or your “Destination”

Some ways to use short term goals are:

• To identify skills, you might want to develop or improve
• Allows yourself to focus on one task at a time
• Identify and overcome barriers early
• Set and achieve milestones
• Helps to reach your long-term goals sooner

Your Short-Term Goals are something you want to do in the near future.  The near future can mean a day, a week, a month or a year, no longer.

6.  Don’t Forget Your Family… take them along for the ride.

Key Take-Aways:

• Start with the end in mind
• Have written financial goals
• Create a financial plan
• Become financially literate
• Be realistic and follow the process
• Be patient & learn from your mistakes

These Are Your Financial Goals. Make Them Personal.

Take Action Today.

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