“The tragedy doesn’t lie in not reaching your goal. The tragedy lies in having no goal to reach” – Benjamin MaysAs I wrote in an earlier post, a first step to financial success is developing goals. My experience shows that setting great goals is often about 50% of the work needed to be successful. If one doesn’t put the necessary work to develop excellent goals, all one’s work may go for naught.
Here are some different examples of personal finance goals with my assessment of effectiveness:
Get rich – Poor. This is too general and vague. It needs more details.
Increase my net worth – Fair. A beginning, but it is not sufficient to be a good goal. There are no numerical targets.
Increase my net worth by $10,000 – Good. An amount is specified, but there is no timing.
Increase my net worth by $10,000 in the next year – Very Good. A specific amount is named but the timing is not detailed enough.
Increase my net worth by $10,000 by May 31, 2007 – Excellent. This is the best because a precise amount and exact completion date is given. It is very easy to determine whether one is on track. Also, it can be broken down into smaller goals, e.g. $2,000 per month.
Of course, excellent execution is also important. However, excellent execution against an uncertain target will inevitably miss the mark.
Photo Credit: morgueFile.com, Michael Connors
This is not financial advice. Please consult a professional advisor.
Copyright © 2006 Achievement Catalyst, LLC
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3 comments:
Dimes,
:-) I’d venture to guess that saving 48% of one’s income is a good start on a plan, as demonstrated by this exceptional saver :-)
Great way to clarify the successful way to set and achieve goals.
Lisa,
Thanks for you comment. Good luck on your journey to financial success.
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