How to Achieve Goals

by Neal Frankle, CFP ®

Several weeks ago we looked at a practical way to define success. Now that you’ve defined it, let’s take the next step and make all your hard work count. Here’s how to achieve goals no matter what.

Recap

Step 1 asked you to define what is important about money and time to you. And step 2 helped you distill vague goals into something you can sink your teeth into. You need specific amounts, times and places so you can draw a picture of what success physically looks like for you. Now we’re ready to move the dream into reality.

Step 3. Identify Decisions and Actions That Stand In Your Way

The next question to ask yourself is whether or not your current decisions and actions get you closer to or further away from the success you want. For example you might tell me that money is important to you because it helps provide financial security for your family. But if you decide to pursue a career that has a limited financial future and you take action around that, it tells me one of two things. Either you really don’t define ultimate success as having financial security for your family (you have other priorities) or you don’t really understand how your decisions and actions are torpedoing your life.

Either way, take a moment to write down how some of your decisions and actions move you towards your goals and how others move you away from ultimate success as you’ve defined it. This might be a bit uncomfortable but please be brutally honest. You’ll thank me later.And don’t fret. Most people are both productive and counter-productive at times. Nobody is judging you and nobody is perfect.

Just in case, here are a few questions that might help you with this exercise:

  • Are you in debt? Why or why not?
  • Do you have enough life insurance? How do you know?
  • Are you saving enough? Again…..how do you know?
  • What do you worry about? Why? What are you doing to fix this problem? How are you ignoring this problem?
  • Do you know how much it will cost you to travel (or whatever your goal is) each year? Are you budgeting that amount and setting it aside? Why or why not?
  • Are you stuck at work because you don’t write proficiently or because you are challenged when it comes to public speaking (for example)? Are you taking courses to remedy these obstacles? Why or why not?

I know that this part of the exercise isn’t very fun. It can be unpleasant to see how we self-sabotage. Still, if you want progress you’re going to have to do things a little differently. And that means you have to understand the real consequences of the way you live your life now.

Step 4. What needs to change?how to achieve goals

In the previous step, you identified those decisions and actions that stand between you and success. In essence, you’ve created a “to do” list because you know exactly what needs to shift. The next step is about breaking that “to do” list into actionable tasks. Let’s use an example to illustrate.

Assume you want to travel more. You don’t travel as much as you’d like because you’re job doesn’t give you enough time off and you don’t have the money to go anywhere anyway. So there are two problems. Here are just a few possible actionable steps:

A. Start using budgeting software to create a travel fund.
B. Start a side-business. (This could provide additional income. And if it’s very successful, it might be an alternative to your current gig and provide a more flexible schedule allowing you time off.)
C. Look for opportunities for jobs that include travel.

The idea is to identify the tasks you need to get into action around and then…..get into action.

I don’t know about you but if I am in action around solving a problem, I feel pretty successful. This is true even if I haven’t yet achieved my ultimate goal. Just knowing that I am going in the right direction helps me feel effective.

I know plenty of people who are very wealthy and they are still miserable because they haven’t clearly identified what success means. And I know other people who feel completely successful even though they have modest resources. The difference is that successful people know what they want, identify what stands in their way and take action around busting through those obstacles.

Do you feel successful? Why or why not? How did you get to this point? What do you need to do differently? When are you going to start? What’s stopping you?

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{ 1 comment… read it below or add one }

Ronald Dodge December 29, 2013 at 3:22 AM

I feel successful because I have been able to foresee in general, various issues on the horizon and I been able to minimize the impact of those negative issues.

We do have student loans and a mortgage on the house.

Currently, we do not have life insurance, but that is on the roadmap. However, we have to get to the point we can financially do it and not by the principals given by the life insurance business either as I have went into far more into analytical depth of the issue because of the fact I do have a license in the business. However, other things must be settled before life insurance can come into play. While I certainly understand the risks, at the same time, not all risks can simply be just sold away either, especially when one is very limited on income and other assets.

I wouldn’t say so much worry, but concern. Why I say that? You can only control what is reasonably within your control and you can only plan for what you can reasonably foresee, and take actions to the reasonable extent you can to mitigate those bad effects. On the other hand, as to when it comes to retirement years, one has to have enough assets and given the various risks that can and does happen both during employment years and retirement years, that has asset resource management as a very major area to be concerned about. As such, I have developed a plan using 3 standard deviations with the statistical process instead of the normal 2 standard deviation. On the one hand, there is no such thing as a guarantee as there will always be that outside chance that you will lose everything. If you use good investing practices, you can greatly reduce these chances, but that still leaves open a 4% point chance of not enough money. For that, that is why I also took it to 3 standard deviations, so as to take it down to less than 0.1% chance of not enough money for retirement years.

I get this from the year-long self-study I did in 2001, which I developed various rules. A few rules I picked up from other places, but I didn’t incorporate those rules blindly, but rather had it incorporated after putting it through critical thinking and making sure it had fit in with the rules I have developed from that self-study.

Am I saving enough? Currently, not right now. However, that will be changing come February 3rd, as I will finally be working full time again. Even with this employment, my base pay will be up 35% higher than what it was at the prior employment, and it is considered as a starting pay for the work I will be doing. On the other hand, there will be no overtime pay, as I had so enjoyed before, so there is a bit of a trade-off. However, that is fine as many of the employees there have said they work on average, 40 hours a week, which means now I will have between 10 and 20 hours a week longer with my family a week than what I had with the previous employment for the same pay.

This goes to say, finally, I will be out of unemployment, after will have been unemployed for a period of 10 days shy of 33 months. In that time, I have first earned my license in life insurance (only took me 3 weekends to do it), then I earned 141.5 quarter credit hours’ worth of college credits (A bit more than 3 years’ worth), getting my BBA and MS in accounting. Not only that, But I have also taken 2 of the 4 CPA exams and passed them, and I will be taking the other 2 over the next 5 weeks, which my next one is this coming Friday. From my understanding, though I can’t really say for my own self, they are supposedly the toughest professional exams of all the professional exams out there. Passing rate is only between 40% and 44%, and yet, I am doing it without taking the review courses outside of going through the Kaplan review books (one per exam) and the flashcards from Becker. But then again, maybe that is because of the fact, my LD in Language forced me to learn the art of memorization along with my gifted skill of thinking logically, and also, I have earned a total of 387.5 quarter credit hours (174 of those hours being repeated as only 5 of those were due to poor grade, and the other 169 due to the money game of the higher education system including 40 of those repeated were dealing with courses I had aced in high school). Given this forced upon of having to take these courses 3 times (once again, because of the money game of the higher education system), it also probably means I have more or less had to learn it pretty good. However, even with the second time, I was already bored of it due to there being nothing new in it, which even my high school teacher having taught the Advanced Accounting course at Genesee Area Skill Center in Flint, MI; told me I was thee only student to fully complete the course out of the 24 years she taught the course. It was so much the case, due to the medication I was on and the side effect, but couldn’t be helped due to the severity of my medical situation, I ended up sleeping the first half of the class, but yet, during the second half of the class, I was tutoring my own classmates in the subject matter. But then I never really learned by being in the classroom, but rather by reading the book, as one of my major ways of overcoming the learning disability issue.

Another thing that helped me out, I joined the Beta Alpha Psi group while on the campus, which I have learned a lot about interviewing techniques and other things. But it wasn’t just that, as I had to do more than just that. What really did it for me, I went to the job fair both days. The first day was for the business and biological fields, which didn’t pan out for me as most of my employment opportunities within the Accounting field came on the nights of “Meet the Firms” and “Meet the Industry”. Looks as though I did get one hit, but it came too late due to the acceptance of the other offer that had to be decided sooner. I ended up giving up the chance for the “IT Auditor” position, when I was offered for the “Software Engineer” position, though that also means moving.

How did I get the “Software Engineer” position? This was a case that was both, going out on a limb and also felt as if something more was working in me than just my own self. It started out with the 2nd day of the 2 day career fair, which was the technical and engineering career far day. On the one hand, I was like, chances are they are looking for people that have majored in the field of computer science or information systems, but on the other hand, I had the work experience of programming and some elements of information systems while I also by that time gained a minor in information systems to back up my 16 years of experience. One of the things that most likely impressed them was the fact when I started to work for the previous company, how quickly I approached by the VP of Operations (initially, this was through my own boss, but it then led to further contact with the actual VP).

Not only that, but while others, who were supposed to have the discipline to do the work came back saying it was impossible because they were only using one major tool, I was then approached with the project after the VP hearing about my skills with the software side of computers and how quickly I was getting things done compared to what they were expecting. After that 2 hour conversation with my boss, I replied back, saying, “Yes, sure; give me 2 months’ time.” I was formulating how it would go through the systems involved in general terms as the project was being described to me and what was being asked. Over that 2 month time period, I not only had the reports fully done, I had those reports fully automated to be ran nightly (between 5am and 6am). The key difference was the fact, I used 2 major tools. I used SPSS (the same tool as the other group were using), and Excel (which the other group had limited knowledge of how to use it’s advanced capabilities while I had extensive knowledge of it). There were 2 main reasons why I said 2 months. First, the SPSS tool was relatively new, so everyone knew there was a learning curve involved, and 2, there was a lot of different types of reports asked, so that also added to it. My general trend, even after having gotten through the learning curve of the tools involved, worked out to be about 1 day (an 8 hour work day) per report (one report would involve not just annually, but also quarterly, monthly, weekly, and daily and incorporated into both the daily report and the other periodic reports).

The other question that seemed to be pivotal, given I was taking up accounting as a major, and yet, my experience has primarily been in programming and information systems, though started out in accounting, they asked me, “Why this position and the accounting major?” I simply replied right back, “Accounting basically tells you where you stand, and you can get the computer to do the work for you, so why not combine the two?”

While I wasn’t really sure how much money I would need for retirement years. However, knowing human behavior, the financial need to take care of our health and also wanting to be able to do things, though we wouldn’t directly have expenses relating to the kids nor employment, I figured our annual cash flow to do the things we would like to do would run around 90k. I think developed rules around that along with having learned how money and the market works along with the various risk factors.

Over the last 3 years, our resources for the most part dropped. In the year of 2011, our networth and savings did go up overall, even for having been unemployed in mid-May. In 2012, those resources were dropping, but not excessively. The year of 2013, this has been the year our resources has been dropping excessively, but still making it through the end of unemployment time period, even if just barely. So over the 3 years, mortgage went down about $14k and the backup emergency fund went down about $8k, while the student loan debt has went up by about $50k (about $16k of that being with my wife in college). Have to admit, some of this debt was taken on to get through this down period given having to take care of 5 girls, but would rather do that than to get funds from our retirement funds, as student loans does have some options, should we need those options, even though I don’t want to think about having to take those options, because then it means we have more severe problems.

As to saving enough? As a general rule, I know, we need to have an average of 25% of “Actual Gross Earned Income” go to countable savings, and to have that average to account for the bad years, one need to really shoot for 40% saving rate. Yes, I had this 40% rule, even after having done the self-study back in 2001. Hecks, there was one year, I reached 50% saving rate. Don’t get me wrong, for most households, that isn’t easy to do.

I figure the next 3 years going to be still tough, though not as bad, but things should get easier after that. Even with that in mind, that is not going to stop me from being aggressive about saving. I tell you, those rules I developed in 2001, and also converted over to Excel instead of doing the budget on paper in July 2003, it has really done the job and also been realistic. I know a lot of people say do the budget on paper, but I don’t do it on paper, but rather do it in Excel. That is simply because our budget got to be way too complex (Lots of calculations) to do it on paper, because it has gotten to be rather a major time consumption to do on paper to the point I had started to take shortcuts only to get burned which I knew of that possibility before it happened. Now, I do it in Excel, and it has really helped us out quite a bit. So while others say do it on paper to make a commitment to the budget, I say do it in Excel to not only make a commitment to it, but also to do it more accurately and efficiently with verification. Yes, I know, my accounting education and my gifted skill of thinking logically, which also given me the skills to whip through the formulas in Excel has given me a major edge over most other adults, so it is far easier for me to do that than for most people. But I tell you, by having done it in Excel as I have, it has really served as an advisor to me in many respects, though me also recognizing the various limitations to that.

For the first half of 2014, the goal has been to get the emergency fund built up to $21,000 and have 5% of my own wages going to the 401(k) plan with the company matching 4% of my wage going into it. However, for the year of 2014, we are also looking at about a $30,000 loss on our home. $20,000 of that due to the economy and the other $10,000 due to having to do repairs and maintenance which part of that being due to wear and tear and part of that due to damage done otherwise. As to claiming a loss on the tax return for the residence, that is simply not allowed because it is considered as a personal loss. The only thing that can be done would be through a like-kind exchange type of transaction. However, given the $250k/$500k excludable gain that can be used every 2 years (as the most frequency allowed other than by certain exceptions) by taxpayers, having to do like-kind exchanges at this point of time is probably a moot point.

As to the last 3 years, I haven’t been as critical about keeping my Excel file up to date, as I had been prior to the layoff. That’s mostly because I been so focused on my school work given I felt I needed to get in and get out ASAP, and to get licensed ASAP, so as I can get back on my own 2 feet to provide for the family.

Why did I do all the things I did for the last 27 months and will be doing over the next 1 month? First, I learned, one has to read into the situation to the extent reasonably possible (note, this is directly from my 2nd rule of 3 rules I use when it comes to financial planning and other aspects of life). If one is not reading into such circumstances and situation at hand, then they are probably NOT seeing the potential hazards or good things coming down the pipeline. While it is nice to have good surprises, and one should be ready for them, it is my belief one needs to see the negative ones even more so, because the negative ones are the ones that are more likely to get you out of kilter in so many ways, than are the good surprises. Please don’t confuse this with being pessimistic, as this is mainly for creating backup plans (Plans B and C), should Plan A fail.

What are my 3 rules?

1) Plan and manage wisely for those items that are in your control.
2) For those items not in your control, plan for those items to a reasonable extent.
3) Leave all the rest to God as there is no point in worry about these last items.

If you notice my last rule, if one just worry about every little thing that could go wrong like dooms day (as my grandmother on my dad’s side did), one will become what I term as a worry wart to the point they are actually much more likely to not only having a higher chance of those negative things taking place, but even more so the case, it sets them up to actually become ill a lot more often, which then becomes a vicious cycle that leads them down that path. Insurance companies don’t want you to think about rule 1, but rather think about 2 and forget about rule 3, as they want you to become so worried about your financial future by playing into your emotional facilities, so as you will purchase into their insurance plans, even if it isn’t the best thing for you. There’s one person who has disagreed with me with different things, and the thing about it, my gut is saying, he just want me to go more with the insurance and investment options, so as they will get more money from me. While one’s gut should not be blindly trusted, it isn’t to be ignored either. As such, to protect against this sort of push, it is best to have a road map laid out, and only make adjustments to it, if it truly does make sense after having put it through true critical thinking. For I have found my road map has been serving me well and that critical thinking is also needed to verify it.

As such, these three rules are setup to recognize while some risks can be sold off. Some of which we are required to sell, such as auto insurance for the vehicles we drive, and now the health care bill, which I hate because it basically says we have to purchase health insurance that are worthless because those health insurance policies will by far cost us more than what we will get from it. It is setup in such a manner, once it is in full force, it will essentially drive up the office bill for an uninsured person to the amount of $500 or so just for one office visit from the current level of about $200 thanks to the so called consumer health care driven plans, which use to only cost as little as $37.50 per office visit as recent as 2003. Even for the insured person, on an after insurance process basis, the cost of the office visit went up to $180. Another word, over the next year, the cost of an office visit for an uninsured person will go up by more than 9 times of what it was just11 years ago, and probably even up to $400 for an insured person under the consumer health driven plan (PPO plans with no co-pays). That is because under Obama Care, it will lead to the doctors getting about $750 per person per year they have as their patients, which they are listed as the patients’ PCP. You figure most healthy people only see their PCP once per year if even that, so to help make up for not getting that $750 from someone that is not on insurance, they (The PCPs) are likely to charge $500 just for the one office visit starting later this week or next week.

I don’t know how many patients each doctor office have, which they may have anywhere between 3 and 8 PCPs, but you can bet, they have a whole wall if not more than that of patient records (may be electronized today), so you know, just this $750 per patient will automatically being them millions of dollars in revenue per year for doing nothing but being the PCPs of their patients. As far as I am concerned, this Obama Care is a wealth transfer program, not a health risk management plan.

Anyhow, while some risks can be sold off, such as maybe unemployment circumstances, other risks can’t be sold off such as health risks. Those risks can only be managed at best. Personally, I don’t even think the risk of death can truly be sold off other than the financial interest, but even that is only to a certain limit, and should only be done when the circumstances are right for it.

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