There are no two ways about it, if you want to get out from under debt, or if you want to achieve your financial dreams, you need to know how to set financial goals right. The key to financial goals is that much of their power stems from how you set them. Sure, achieving them is important but much of the probability of you meeting these goals lie in whether you set these goals correctly and properly.
As Sun Tzu, the famous Chinese general, taught: setting the right goals often dictate their achievement. In other words, choose your battles wisely and learn to fight them the right way. Here are five goal settings skills you need to master to be successful financially.
Learn to choose the right goals
You can set all sorts of goals. However, if you want your financial life to truly move forward, you have to set the right goals. You have to chase the right targets. If you don’t know enough about choosing the right targets, you might end up wasting tons of time and effort. Make sure you pick goals that will actually help you achieve the life you want in the future. So set a budget goal, set a savings goal and set an income goal.
Learn to recognize assets
Assets are things that put money in your pocket. They give birth to cash. Assets are things you buy with cash that produce more cash. You can then spend that cash on more assets which produce even more cash. See how this works? Not everything that looks like an asset is truly an asset. Learn to spot real assets. For example, a car is rarely an asset while a house likely is.
Learn to rank or prioritize assets
Once you have spotted real assets, keep in mind that they are not all created equal. Some are better deals than others. At the most basic, pick assets that produce more revenue than the cost of the asset. In short, pay attention to your return on investment. Rank them according to ROI and buy the ones that produce the best ROI. Buying gold or diamonds for example is an asset that is likely to appreciate in value.
Learn to set realistic deadlines
No goal is unrealistic. That’s the bottom line. You can make becoming an astronaut your goal. If you break that goal into small enough steps and you actually do those steps, chances are you will hit your goal. No joke. What makes goals unrealistic are not the goals themselves but the deadlines you set. You have to set realistic deadlines. Study what you need to do and give yourself the time to achieve these steps. Slow and steady does indeed win the race.
Learn to fine tune or tweak your goals if you don’t achieve them
This is where most people fail. Most people can learn to set goals. Most people can even learn how to fight the right battles. Some can set realistic deadlines. However, if they fail to learn from the times they missed their goals, they are doomed. In the game of life, what matters is what you do when you get knocked down. If you have no clue, chances are you will stay down for the count. So don’t quit, just get back up and try again. If something isn’t working, change it. Just like what HExL, Inc. founder and CEO Richard Kimball, Jr. said, ” Don’t let the momentum of a certain situation carry you into a bad decision. Be prepared to make midcourse corrections even if that is disruptive and unpopular.”