A Guide to Goals
The most impactful conversations with clients rarely involve talk of portfolios, savings strategies, or debt reduction. Don’t get me wrong; these things matter. A lot. I’ve devoted my professional life to helping clients optimize their finances - from tackling debt to creating a plan that will eventually make work optional. But until we understand the deeper purpose for our pursuits, a crucial piece is missing. With that in mind, it’s no wonder that the heart of great financial planning lies in identifying and understanding your most intrinsic values and aspirations. In day-to-day life, we simply call these goals.
But how do we identify our dreams for the future? Perhaps this question sounds somewhat absurd. It is a perfectly understandable response to say, “Of course I know what I want.” I would simply suggest diving deeper and questioning that assumption. An inalienable truth is that – unless you are Hank from the animated sitcom King of the Hill – you probably want or desire more than your time and money (your most valuable resources) allow. And thus the second truth emerges: the fact that we have many wants competing for our resources forces us to choose between them. This, my friends, is where the real work begins.
What follows is a framework to help guide you through the process of understanding your own unique vision and goals for the future.
Step #1: Get It Off Your Mind
I certainly don’t know about you, dear reader, but my experience has been that until I force myself to write, type, or voice record a goal or an action, it fades back into the stream of consciousness that beats like a drum throughout the day. Thoughts are elusive. The result is a fuzzy smorgasbord of ideas, wants, and intentions.
Here is my humble suggestion: over the course of one or two average days, jot down in your phone or on a small notepad each time a big picture aspiration enters your mind. When a vision for the future that is better than today enters your thoughts, capture it and write it down. Pay special attention to two types of thoughts in particular:
Those themes or topics that repeat throughout the day – Our mind is spending precious energy by bringing up the want again and again. This is a clear cue that it is important.
Wants that come with an emotion – This is the mind’s way of capturing our attention and creating motivation. Our mind might be letting us know that we aren’t yet satisfied with where a topic stands today; something could be missing, still needing to be done, or unresolved. Alternatively, the excitement and passion we feel about a topic may be providing clues on deeply held motivations and values. Spend time understanding the driver behind that emotion.
Step #2: Talk about It
Those who know us best can serve as a mirror, making it possible to see aspects of ourselves that we otherwise never could. Ask a trusted friend, family member, or mentor what you talk about most, what they perceive are your greatest desires, and what causes you to light up. This outside perspective can be invaluable in shedding light on blind spots of which we may not become consciously aware.
Years ago, I shared with a friend that I had a career idea I was considering. I can still hear his words. Without knowing the idea, he said “Whatever it is that you are thinking of doing, do it. I’ve never seen your face light up like that.” My friend knew me well. He could sense that the idea had generated unparalleled passion, creativity, and purpose. The idea, as it were, was to create a financial planning practice designed to make sophisticated financial planning relatable, accessible, and real.
Step #3: Sort It Out
The result of steps #1 and #2 is a list of wants in no particular order. A starting point that I find helpful for prioritizing those wants is to separate goals into three buckets: gold, silver, and bronze. “Gold” can be described as essential, tying directly into our most important and closely held values. “Silver” items are those that we’re serious about achieving and will enhance our life experience and/or the well-being of people close to us. “Bronze” catches those things that we would love to happen but won’t make or break our happiness. In our house, the buckets might look like this:
This example is not right or wrong; it is simply ours, just as yours will be unique to you. One word of advice at this stage: avoid thinking in terms of ‘This should be a priority’ or ‘That should be top of my list.’ Be honest with yourself about what gets you excited or causes you worry when thinking about the future.
Once you have a handful of items in each bucket, attempt to prioritize within that bucket. By prioritizing within a bucket, we are comparing apples to apples. Wrapping our minds around competing goals becomes much easier. For example, your gold bucket might look something like this:
Get out of debt
Increase retirement contributions
Buy a rental property
Start a business
Learn how to invest smarter
Step #4: Think through the Give and Take
Tradeoffs. They are inevitable in every aspect of life. If we take one job we are likely saying no to another. If we buy a house, we are probably choosing one neighborhood or town at the expense of a different one, at least for a period of time. By investing dollars back into a small business, we cannot also invest those same dollars into our retirement account. For many of us, step #3 is the hardest. Naturally, we want to have our cake and eat it too! Setting goals for the future requires us to be honest with ourselves about what we need to give up in order to achieve those gold bucket aspirations from step #3.
My suggestion for this stage is to take the top two or three items in your gold bucket and compare what is gained and lost by pursuing this goal. Again, a personal example from our own experience: when my wife and I were deciding whether to relocate from Denver, Colorado to Bend, Oregon where we live today, our "Give and Take” list looked something like this:
This approach will provide incredible clarity on the “why” behind your actions. Perhaps most importantly, when it is tempting to become distracted or alter course toward a lesser or easier goal that feels more alluring in the moment, we can go back to this exercise as a reminder of the greater purpose.
Step #5: Ask the Hard Questions
As you’ve probably already observed, a theme is emerging: great results require that we are honest with ourselves throughout the process and challenge our assumptions. Before solidifying a goal and setting out to achieve it, I suggest spending time thinking through questions that might get in the way of the goals you’ve identified in steps #1 through #4. Several examples are:
Am I willing to do what is necessary and make the difficult choices required to achieve my most important goals?
Is what I’m doing now moving me toward realizing those goals? If not, what is causing me to spend time, energy, and money elsewhere?
What changes would be required to making these goals a reality?
What factors of success are within my control and which ones are not?
What distractions could derail me?
By asking questions that challenge your goals upfront, you’ll understand some of the obstructions that might get your way and be all the more prepared to confront life’s curveballs.
Step #6: Repeat at Least Yearly
When I was 15, I wanted nothing more than to make the tennis team at my high school. At 16, buying a car was my life’s ambition. At 22, it was to find meaning and purpose in my career. And now in my 30s, I want nothing more than to create opportunities for our daughter. My focus is on teaching her to dream big, instilling a belief that she can make it a reality, and showing her that mom and dad will forever be her biggest champions.
Our goals will (and should!) change over time. We are perpetually evolving as individuals and constantly gaining new information that shapes our thinking. Dynamic and growing priorities are a normal part of our journey through life. This requires us, however, to periodically pause, take stock of where we are, and make sure we like the direction we’re headed.
My suggestion is simple: at least once per year, set a standing appointment to spend time – even just half an hour – reflecting on how your goals have changed over the past year. I believe strongly in this step, so much so that an annual goal review meeting is built into the ongoing client experience of my firm. Without this crucial step, how can we be confident that we’re still moving in the right direction?
Let’s face it: not knowing what we want can have real negative consequences. We lose time, possibly money, energy, and potentially find ourselves in a place that is less than ideal. My experience with hundreds of clients over the past decade has shown that the process of crafting and revisiting our goals can make all the difference in our lives. This is the key: process. Intentional thought on defining our aspirations will inspire confidence and action.
I hope reading this has provided a helpful framework with actionable takeaways for your own goal-setting process. Tell us more: How do you set your goals? Can you think of something to add that would be helpful to others in plotting their path? We’d love to hear your insights and experiences.