While working out your Financial Plan, you need to fix your short-term and long-term goals along with your Financial Planner. This is perhaps the most vital step and hence requires a lot of care. In this blog, we are going to give a very interesting perspective on the size of such goals.
It is an extremely interesting situation when it comes to deciding whether to set up ambitious goals or easily achievable goals. Some opine that one should set big goals so that you think big; but the downside to this is you may get demotivated, if you fall short in your achievements. According to some, you should set achievable goals so that your achievements will encourage you. There is a flaw to this viz. you may not reach your full potential. Both approaches have their merits and demerits and we can discuss this life-long.
I too had my share of confusion till I listened to Raymond Aaron, a great motivational trainer. Ever since, I never had any confusion on the size of my goals. Raymond’s guidance is useful for your financial goals or for that matter any other goals. Let us sum up this as follows:
- When it comes to setting up your short-term goals, let your goals be small, realistic. The reason for this is that your achievement will give you a step by step confidence. It is based on the famous Chinese philosopher Lao Tzu’s saying, "The journey of a thousand miles begins with one step." Such an approach has an uncanny knack of making you more consistent. I am also a firm believer that simple and consistent actions produce marvellous results, without any overwhelming.
- When you are fixing up your long-term goals, think very big. Let your long-term goals be unreasonable, impossible and gigantic. The logic behind this is very simple; unless you set massive long-term goals, you will not expand your horizon. The most interesting part of in this approach is you do not have any pressure but still think big. What a great idea!!
- Of course, let me quickly add that you need to follow this subject to your Financial Mentor’s advice. This is because your mentor will know your situation in greater detail and he may differ with the above approach in your specific case. But for majority of the people, this will work.
Let us give one example each of a short-term goal and a long-term goal using the above principles:
- You may plan your 5 year old son’s school education in the same city you live in; and
- You may set up a goal to give him an MBA degree from Harvard after 10 years.
I am quite fascinated by the simplicity of this approach. I do understand that one should be open enough to look at better ideas. If you have any such ideas, please do share. In the meanwhile, one can set the goals based on this approach.
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