Setting Strategic Financial Goals
David J. Waldron
Contributing editor and author of Quality Value Investing | Helping readers achieve their career and financial goals since 2013 | Join 1200+ Subscribers of the QVI Newsletter on LinkedIn and Substack
Summary:
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Welcome to the twelfth segment of the serialization of my next book, Quality Value Investing: How to Pick the Winning Stocks of Enduring Enterprises (working title and subtitle). I am writing the book on LinkedIn as part of the QVI Newsletter and look forward to subscribers’ support and feedback as we produce the manuscript in real-time.
Book Segment #12?shares a simple yet powerful goal-setting template to support a universal quest to achieve savings and investment objectives relevant to our life journeys.
Reading books and articles on investing inspires many to rethink personal and professional goals and objectives. So, a book segment dedicated to goal-setting strategies was actually in order.
Although this post isn’t correlated directly to specific investment practices, its mission is for readers to apply its concepts to their money management objectives.
A Categorized Approach to Goal-Setting
Several years ago, I had the privilege of attending an outstanding self-improvement seminar in New York titled the Master’s Course. My favorite takeaway from the workshop was a goal-setting exercise based on a holistic approach to achieving excellence.
The template uses ten domains—or categorized essential areas of life—at both the personal and professional levels. It changed my life, or at least my approach to mapping it.
1. Spirituality
2. Family
3. Health
4. Education
5. Career
6. Money
7. Social
8. Leisure
9. Community
10. Projects.
To this day, it drives my short- and long-term goal-setting, supporting my effort to produce many personal and professional outcomes for which I am proud as much as humbled. I have yet to find a more straightforward, productive course of action toward making the most of what is important and caring for those dear to me.
One of my primary goals is to make a living by making a difference in the lives of others. Thus, the motivation for publishing Quality Value Investing (QVI) book segments and sharing this timeless treasure of a structured approach to goal setting in pursuing excellence in one’s life.
As an investment book, Quality Value Investing chooses the Money domain to present three highly effective categories for strategizing an effective goal-setting plan.
Nevertheless, any goal-setting strategy should be fun, creative, and attainable. Pursuing stretch goals, or hard-to-reach dreams, is essential for ensuring we are not taking ourselves off the hook. However, reaching our intended outcomes is paramount. That is why I recommend setting goals that we are confident in achieving. Thus, pursue achievable goals complemented by expansive, more challenging ambitions.
How to Set Achievable Goals
Whether an aspiration, ambition, dream, target, purpose, or objective—whatever we call a goal—it is perhaps one of life’s most exhilarating and frustrating occurrences. Of course, achieving a plan may be the most rewarding of moments. On the contrary, failing to reach a dream is one of life’s more painful experiences.
That is why it is crucial to set reasonable and attainable goals, thus giving us an increased opportunity for joy and, at the same time, leveraging against unwanted disappointment.
That said, authentic goals are indeed challenging. However, the relative difficulty level in achieving a goal makes it worth setting in the first place. For example, “I hope to wake up tomorrow” is not a goal but a probable reality for most individuals. However, it may be an accomplishment without prior equivalency for someone with a chronic illness or life-threatening injury.
Therefore, readers should determine what is unique to them. What is the game changer? The elusive, although attainable dream? The simple accomplishment? What is the purpose of one’s life?
Goals are one-way private contracts that determine the perceived value of our existence, often providing a measurement of our self-worth. Thus, it is imperative to keep things in perspective:
Never allow failure to define us or success to spoil us.
Instead, goals keep us moving forward in this sometimes hectic life. Nonetheless, never let a failure—or an achievement, for that matter—become more important than life itself. Be humble in defeat as well as in victory.
Practical goal setting requires three general rules of thumb: planning, simplicity, and structure.
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Have a Plan and Work the Plan
Regardless of the difficulty level or the personal importance of a dream, setting and achieving our goals happen more often if we write them down. For that reason, it forever remains the first rule of goal setting.
Rule #1: Write your goals down.
Written goals have a higher chance of actual achievement. Goal setting is about creating and then working a plan. As life sometimes goes, the blueprint may not perform as intended, although by having a written plan and working it rigorously, something good may happen when least expected.
Whether choosing a traditional paper notebook, smartphone/tablet notes app, or desktop software, write goals down clearly and concisely. It is a contract with ourselves, so please treat it as such by signing and dating the plan. Rewrite and edit, as necessary, until comfortable with the language and format. But write it down, read it often, and revise it whenever necessary or practical.
Life changes; therefore, so does the written plan that guides it.
Give the Plan a KISS
The key to a practical approach to goal setting that is both believable and sustainable is to develop objectives for both short- and long-term ambitions. Therefore, keeping the written plan brief is crucial, which brings us to the second rule of thumb for practical goal setting.
Rule #2: Keep It Super Simple (K.I.S.S.).
As a fervent believer in the KISS concept—or the keep it super simple approach to investing and life—I update my goals at the beginning of the year by setting at least one annual objective for this calendar year and at least one goal that stretches beyond the year for each of the ten domains. I then occasionally visit the list to monitor progress, making adjustments as warranted by life’s fluid and ever-changing landscapes.
And yes, sometimes unexpected vicissitudes are distressing. Tragedy and heartbreak notwithstanding, remember these words of wisdom:
The pain of change is long forgotten when the benefits of the change are realized.
Change is inevitable, and the stock market, investment portfolios, and savings plans are no exception. Moreover, change is the only consistent event we can count on. Thus, a critical component of any goal-setting exercise is the willingness to make necessary adjustments.
Regardless of any shift and the resulting discomfort, keep it super simple. Our chances of attaining our goals may multiply accordingly.
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Write Goals the SMART Way
It may seem a redundant cliché, although using a well-worn acronym in goal setting could be the difference between success and failure in reaching our desired outcomes. Therefore, it’s the third rule of practical goal setting.
Rule #3: Be S.M.A.R.T. when setting goals.
Write and front test goals using George T. Doran’s SMART approach: specific, measurable, attainable, realistic, and time-bound,?[1] inspired by Peter Drucker’s legendary management by objectives concept. [2]
Doran suggests that we be specific when writing down our goals, ensure our ambitions are measurable, set only goals we believe are achievable, be honest in our self-assessment by committing to realistic and relevant targets given the resources available, and establish time-specific deadlines to reach our objectives.
For example:
As an avid learner, I will read at least one book on investing or personal finance each month during the hours I set aside in my calendar. Then, upon completion, I will write a brief narrative in my online diary of how each book enlightened me or changed my way of thinking about money.
The above illustrative goal is specific in its clear objective of reading a minimum of one book each month, measured by recording the results in personal calendars and diaries; attainable by allowing an entire month for reading at least one book amid a busy schedule; realistic in the sense the goal setter knows oneself as a passionate reader; and time bound in that they choose and record specific timelines.
The SMART goal-setting approach is imperative for achieving practical and workable objectives. Remember to integrate the SMART concept into each written goal.
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The Essential Concepts of Be→Have→Do
I hope readers do not skip this section because of its unusual title, as it is perhaps the most critical aspect of practical goal setting. The concept of be→have→do demonstrates why most individuals never achieve many of their goals.
When operating on automatic, humans tend to live based on a premise of do→be→have. In other words, “If I do this, then I will be that, and therefore, I will have this.” A typical example:
If I do save and invest lots of money, then I will be wealthy, and therefore, I will have financial security.
The typical person, on an average day and at the subconscious level, is inclined to set goals based on the lesser effective do→be→have state of being. On the other hand, successful goal-setters do not operate their life from the premise of favoring action above all else without first believing in and taking ownership of the objective at hand.
In other words, most individuals don’t function from a place of self-ownership and thus set goals based on what they need to do. As a result, many have trouble achieving the desired outcomes of what they hope to be or want to have.
I submit that successful goal setters function in the rare conscious state of be→have→do. Take a look at how a mere reshuffle of priorities may result in a dream achievement never thought possible:
If I be [am] someone worthy of wealth, I will have a sense of financial security. Therefore, I will do what is necessary to earn, save, and invest more money.
By moving toward favorable action, mindful goal-setters have first decided they are worthy of the wealth and the financial security it brings, thus creating a built-in motivation to earn, save, and invest more.
The concept of be→have→do is counterintuitive, although geared to the anticipated result of saving money or whatever the personal or professional goal. Individuals often operate subconsciously, influenced by a well-intended upbringing or external environmental influences. Each focuses on the action of doing before deciding they are worthy of being—and deserving of having—what is deemed essential.
Such a conscientious approach to living, in general, and goal setting, specifically, is unconventional. But that is why it works. If conventional wisdom always prevailed, most individuals would succeed in their life’s pursuits, thus rendering self-improvement newsletters, books, and seminars to extinction.
By embracing the be→have→do concept, we are first using the power of affirmation to be who we want to be, then have what we want to have, and lastly, do what is necessary to achieve our stated goal.
Successful action follows those who first decide they deserve what they want to accomplish.
Practice the cognitive art of be→have→do by first deciding to be worthy of our stated goals. Next, take ownership of what is essential to us, our loved ones, and our colleagues. Then, accomplish what is necessary—ethically and with care—to bring those goals to fruition.
Arguably, individuals do not change, although everyone can transform. So, embrace the challenge to recast through goal-setting. Begin with the destination in mind, remembering to enjoy the journey, as the ride can be the best part of reaching our goals and dreams.
Exploring the Money Domain of Goal Setting
Did you hear that everyone earns the same amount of money?
It's called not enough.
Money is a highly personalized domain. However, it is wise to leave emotions out of our money management and set goals with purpose.
Ask for a raise this year? Invest more or more often? Hire a financial advisor? Build an emergency fund? Refinance a mortgage with a lower interest rate? Improve our credit rating? Construct a workable budget? We all know that the possibilities for financial improvement are endless.
Pick and choose what is essential in the near term, such as eliminating a credit card balance or brokerage margin account, then reach further for higher aspirations like paying off an onerous student loan. Treat personal financial management as a business and triumph.
To make more of it, consider doing what is most enjoyable and being the best possible at our chosen occupation or investing strategy. Money might follow our passion.
Pulling It All Together
In writing this book segment, I aimed to pass on what I was fortunate to learn at the Manhattan self-improvement seminar to as many interested investors as possible. The workable goal-setting template—focused on ten essential areas of life—that I took away from the training on that fateful day remains a powerful personal development tool. Nevertheless:
Equipment left in the toolbox will not repair a thing.
Put these strategies to work and benefit from realistic goal-setting toward achieving investment objectives and financial dreams. To pull it all together, here is a review of the elements of practical goal setting to keep us moving onward and upward in the savings and investment pursuits that fund life’s essential milestones, such as buying a home, paying tuition, sponsoring a wedding, underwriting a hobby, starting a business, or enjoying a comfortable retirement.
May your achievable savings and investment goals and financial dreams come true. Whenever one does not manifest as expected—borrowing from the Spirituality domain—keep the faith and persevere.
Resources
This segment was excerpted from David’s second book, The Ten Domains of Effective Goal Setting: Achieve Your Dreams in the Essential Areas of Life?(Country View, 2016). Available worldwide in paperback and ebook at your favorite online bookstore.
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About the Author
David J. Waldron is the founder and contributing editor of Quality Value Investing, and author of the international-selling book Build Wealth with Common Stocks. David’s mission is to inspire the achievement of his readers’ financial goals and dreams. He previously enjoyed a 25-year career as a post-secondary education administrator. David received a Bachelor of Science in business studies as a Garden State Scholar at Stockton University and completed?The Practice of Management Program?at Brown University.
Disclosure: I wrote this book segment myself, and it expresses my own opinions. I am not receiving compensation for it other than from Substack paid subscriptions. I have no business relationship with any company whose stock is mentioned in this post,
Additional Disclosure: David J. Waldron’s Quality Value Investing book segments, newsletter posts, research reports, and real-time stock picks are for informational purposes only. The accuracy of the data cannot be guaranteed. Narrative and analytics are impersonal, i.e., not tailored to individual needs nor intended for portfolio construction beyond his family portfolio, which is presented solely for educational purposes. David is an individual investor and author, not an investment adviser. Readers should always engage in independent research or due diligence and consider, as appropriate, consulting a fee-only certified financial planner, licensed discount broker/dealer, flat fee registered investment adviser, certified public accountant, or specialized attorney before making any investment, income tax, or estate planning decisions.
Copyright 2024 by David J. Waldron. All rights reserved worldwide.