Step One: Begin The Goal Setting Process In January
We begin our annual goal setting cycle in the weeks surrounding New Year’s Day. Why? Because it’s virtually impossible to forget or avoid this annual holiday event.
The New Year is a natural time to reflect on achievements from the prior year and start thinking about what we want to achieve in the coming year. In short, it’s a perfect time to begin a goal setting cycle.
Your first task is to review your written goals from the prior year and compare them to your actual results.
“No one can cheat you out of ultimate success but yourself.” – Ralph Waldo Emerson
Inevitably, your results will exceed expectations in some areas, and disappoint in others. The critical point here is to not judge yourself because you’re not your results.
Instead, I suggest positive reinforcement by rewarding yourself for all that you did achieve in the prior year. Take the time to celebrate your wins because you deserve it. Also note areas where you came up short, as that is honoring reality.
What are your results telling you? If you came up short on a goal, then what was the cause?
After all, if you said you wanted a goal, but didn’t achieve it, then there is opportunity for learning.
- Did something change?
- Did other goals take a higher priority
- Did obstacles get in your way?
Maybe you’re just not committed to that goal, and should drop it or change it.
You don’t get to be right or wrong during the review process, as that won’t serve you well. There’s no value in belittling yourself for missing a goal because that will just take away from honoring your successes.
The purpose is simply to get clear on what worked in the prior year and what didn’t. Just notice the facts and make conscious what happened, but don’t judge yourself.
“When defeat comes, accept it as a signal that your plans are not sound, rebuild those plans, and set sail once more toward your coveted goal.” – Napolean Hill
Where did you meet with success, and where did you come up short? Your objective is to learn from experience and improve your goal setting for next year based on what you discover.
You’re creating an active feedback loop so you can correct and adjust your goals every year to get what you want out of life.
This correct and adjust process works much like rocket guidance systems. When a rocket is launched to a faraway destination, it’s traveling off course more than 80% of the time. Yet, the same rocket will hit its target with pinpoint accuracy. The key is correcting and adjusting.
The rocket knows its goal and is constantly correcting its trajectory during flight until it arrives at the destination. You can do the same thing by reviewing your goals each year and learning from your successes, as well as your failures.
Step Two: Prepare Financial Statements
The next step during the annual review process is to compose a “quick and dirty” income statement and balance sheet.
This task is particularly easy around the turn of the year because annual tax statements must be prepared showing your assets, income and spending.
When you prepare these statements you are treating your personal finances with the professionalism of a business. You’re respecting your money.
I also suggest plotting your net worth and residual income on a chart so you can track your progress toward your goal of financial freedom. This is very important if you’re working toward the goal of financial independence or retirement security.
The person who makes a success of living is the one who sees his goal steadily and aims for it unswervingly. That is dedication. – Cecil B. DeMille
Once you’ve updated your financial statements and reviewed your past goals, you’re then complete with the feedback loop portion of the process.
You now have a solid foundation on which to build your new goals. You have a current snapshot of your financial picture, and you understand what worked from the prior year, what didn’t, and why.
Step Three: Ask The Right Questions
The next step in your annual goal setting process is to decide what you want to create with your life moving forward by asking yourself some questions:
What do I want this year?
What will it take for this year to rate as a 10 on a scale of 1 to 10?
If failure was not a possibility because I’m guaranteed success, then what would I do? How would I play the game of life differently?
What values do I hold dear that I would like to honor in the New Year?
What’s frustrating or dissatisfying about my life, and how would I like to change it?
If I graded the various parts of my life (relationships, business, money, health, recreation, etc.) on a 1 to 10 scale, what grade would each receive, and what do I want to do this year to create the grades I really want?
What objectives would make the biggest, most profound difference in my life?
Step Four: Compile And Prioritize Your List Of Goals
After I’ve answered these questions, I get together with my wife to create a combined goal sheet for the family. She follows a similar process independent of me and creates her own agenda.
We then compare lists and create a combined family agenda for the year that’s broken into two categories: the first list has business and financial goals, and the second list has our personal and family life goals.
It’s important to note that we don’t just add the lists up to create one summation list. Instead, we negotiate the goals knowing that we must focus to succeed.
Less is more, and this is critical to note. More goals doesn’t equal more success, but more focus on just a few goals that make the biggest difference will equal more success.
Having more goals won’t lead to to success. Focus on fewer goals for the best results instead.
We compare our goals to the “10 Keys To A Winning Goal” checklist found in Step Two of the Seven Steps to Seven Figures course that this article is excerpted from, and we put on the back burner those goals that don’t make it to the top.
After years of practice, we have learned to enjoy greater balance and happiness by focusing on just a few critical goals and actually achieving them, rather than setting ourselves up for disappointment by getting spread too thin with too many goals.
What amazes me about this process is how powerful it is while being deceptively simple.
It never fails to redirect our thinking.
It creates clarity and cohesive focus for both of us to operate as a team, and helps us create a more satisfying and fulfilling life for our family.
It redirects our lives and keeps us from drifting aimlessly or living day to day.
Step Five: Get Into Action To Achieve Your Goals
Once you’ve set your goals, you now have a whole year to achieve them. But how are you going to do that? What is your next step? My suggestion is to divide and conquer.
Keep things simple by picking from the list only those goals that are the most exciting and juiciest of all, so you can focus your limited time and energy resources on them.
What’s your top priority for the year? What’s the most time sensitive or immediately compelling goal on your list?
“The big secret in life is that there is no big secret. Whatever your goal, you can get there if you’re willing to work.” – Oprah Winfrey
Once your goals are prioritized, then you can pick either of the two strategies from below to begin executing your plan of action.
I offer two different strategies because each is appropriate for different situations, depending on conditions. Certain goals and personality types work best with one or the other approach. Which of the following approaches is best will depend on your personal style and the particular goal you are pursuing.
Next Step Approach: This is a forward looking approach where you just pick the next step to achieve your goal, complete it before figuring out the next step, and so on until your goal is realized. You don’t worry about the big picture with all the planning issues (which might bog you down because too much is unknown, or the whole process is too big to grasp). Instead, you just determine whatever the logical next step is, and trust it’ll take you to the next step until the path becomes clear. You’re like the rocket that’s correcting and adjusting its flight path. This also helps you avoid the “get ready to get ready” syndrome so that you can get started right now and not get stuck in procrastination excuses.
Reverse Engineering: This approach requires you to start with the whole plan in mind from the beginning by reverse engineering it into smaller tasks to complete. You then further subdivide the tasks into additional actionable steps, while continuing to break it down until you have daily actions that will take you to your goal when completed. The advantage to this process is it breaks big tasks down into digestible bite size chunks, making the whole process very easy to grasp. It’s most effective for analytical personality types, or situations where the entire path to the goal can be understood and mapped out in advance.
Both of these approaches help you succeed by reducing the intimidation and confusion that is sometimes associated with larger goals that take us into unfamiliar territory. They reduce your fear factor by transforming goals that are too large to grasp into actionable items that you can easily execute.
Each strategy answers the question, “where do I start?” and “where do I go next?” so that you don’t get stuck in procrastination.
Step Six: Persist Until You Achieve Your Goal
“Let me tell you the secret that has lead me to my goal. My strength lies solely in my tenacity.” – Louis Pasteur
Once you have picked your goal and developed your plan to achieve the goal, then the rest of the game is simply a matter of getting started and not stopping until you reach it.
Every time you complete an action step, you’re one small step closer to your big goal.
Just keep on correcting and adjusting until you get there with rocket-like accuracy.
Step Seven: Maintain Focus By Reviewing Goals Regularly
Finally, the last part of this annual cycle is you must create a habit of refreshing your goals throughout the year. This means you must review them regularly and rewrite them as necessary.
The purpose of this step is to maintain your focus throughout the year as life’s clutter attempts to distract you from what’s important.
By reviewing your goals regularly, you’re counteracting all the forces outside of your control designed to sideline your plans.
Some people like to post them on their wall, keep a copy on their desk, or post them in their Day Timer or smart phone. Whatever is convenient and will remind you on a regular basis about your goals so that you maintain front of the mind awareness is what’s important.
“It matters not what goal you seek. Its secret here reposes: You’ve got to dig from week to week To get Results or Roses.” – Edgar Guest
In summary, the seven step process you just learned is designed to do one thing: make goal setting a habit. You must habitually create and refresh your goals to gain all the value from this incredibly effective tool.
By following a habitual goal setting process, you’ll become part of the 3% that outperforms the other 83% by a factor of 10 to 1. You’ll also put yourself firmly on the road to retiring early and wealthy.
It truly works.
Goal Setting System Key Points
There are three major points you should take from this article:
Practicing goal setting and reviewing your goals is necessary to live the greatest version of yourself in this lifetime. Not using goal setting technology to the best of your ability is simply wasteful. It’s the equivalent of flushing opportunity down the toilet.
”You must have long-range goals to keep you from being frustrated by short-range failures.” – Charles C. Noble
Goal setting engages your mind in five different ways to achieve your goals. This gives you a distinct competitive advantage over others who don’t regularly set and review their goals. This competitive advantage can make the difference between retiring early and wealthy, or living a lifetime of financial mediocrity.
The most effective way to get all the value out of goal setting available is to make it a habit. Set your goals at least annually, and review them at least monthly. Build a regular cycle out of the process so that it becomes an integral part of your life. If you set goals in a random or irregular fashion, then you will get random and irregular results. If you set and review your goals regularly, you will move them to the forefront of your mental awareness, which will create more consistently profitable results.
The bottom line is if you want to retire early and wealthy, then regular goal setting must become an integral part of your life practice. Financial coaching is a great tool to add accountability, support, and additional insight to not only setting goals, but also following through long enough to actually achieve them.
Contact Connie Dello Buono, jr financial planner to save on your income taxes thru a business structure and financial strategy and have a chat with a sr investment advisor. 408-854-1883 firstname.lastname@example.org