Are you happy with the person you are? Chances are that you’re not quite the person that you’d like to be; most people aren’t. I know that I’m not. I have goals, aspirations and things that I’d like to improve about myself, my life in general, and the world at large, but getting there takes work. Goals take planning, working the plan, motivation, drive, and follow-through. Each of these things come differently to different people. Some people are naturally gifted in some or many of these areas, some are not. I’d wager that the majority of people fall into the latter category.
For me, I recall being more driven in my younger days. I am trying to improve myself by becoming more of the person that I want to be. I am setting goals; I have some long-term, mid-term, and a few short-term goals. I find that beginning with bigger, more long-term goals is easier and can also be worked into the shorter-term goals.
For example, if I want to have $600k in investments by mid 2029 (for early retirement), many things need to happen. This is a good goal because it has a time frame associated and can be easily measured; I will hit it or not. I can use some simple math and basic assumptions to figure that I will need to invest an average of between $19.5k and $26.5k per year in order to make this goal (spreadsheets rock!). The very first thing that I have to do is to pay off any debt as quickly as possible. This is a good idea because it gets the debt out of the way and I can then concentrate on the building of my investments without much worry. I’m very close to finishing up doing this, but I’m not quite there yet (this is a mid-term goal; generally one to three years or so). After that, one necessity will be to invest in addition to my 401k (the current max allowed is $17.5k per year). Thus, I will need to open and contribute to an IRA (a short-term goal; I’ve done this). There are many possible goals that I can add to make this long-term goal more concrete and have additional medium-term and short-term goals associated with it.
Obviously, goal setting is very important to becoming a better you. Another thing that is very important is changing things that will keep you from achieving your goals. For my example, one possible thing that could keep me from reaching my goal would be that I end up spending money that I should otherwise be allocating to investments/savings. Currently I am nowhere near hitting $19.5k (or $26.5k) of savings for the year, but I do plan on increasing my contributions greatly until I am hitting and over that threshold (thus making it an average).
Another thing that helps to make a better you is setting priorities. In order to hit my aforementioned goal, I will need to keep my standard of living in check while, at the same time, working to increase my income. This is a good multi-pronged approach; concentrating on multiple complimentary ways to solve the ‘problem’ of hitting the goal.
One very real example that I have faced lately is spending vs. income generation. I need a new phone, so I decided to get the current latest, greatest thing (I don’t typically advise this). Since I am indulging in such a great luxury, I am working extra hard to ‘make up for it’ by selling some things on eBay and am also seeking additional ways to bring in a bit more income. I am fine with the splurge because I will make sure to more than make up the difference with additional income.
Here is some recommended inspiration:
A Lifetime of Riches – Is it as Simple as a Few Habits?
YOU’RE NOT GOING TO MAKE MONEY WITHOUT DOING THE WORK
BREAKING BAD HABITS
10 TIPS FOR STAYING MOTIVATED TOWARDS YOUR FINANCIAL FUTURE
J.D. Roth: How I learned to Stop Worrying and Love Mustachianism