Setting financial goals is a critical first step on your path to financial freedom.
The subject of objectives/goals was last covered in a couple of 2017 posts that are accessible here and here.
Some people have the misconception that objectives and goals are the same. Let’s dispel this misconception right now.
What Is A Goal?
A goal is the lifelong aim one endeavors to achieve. This is essentially what you are trying to accomplish.
Is financial freedom your goal? If so, by what date do you want to achieve this? How much money do you think (be truly honest with yourself) you will require? What lifestyle do you envision leading when you retire? Do you intend to retire from something or to retire TO something? If you have nothing of interest to keep yourself occupied in retirement…good luck to you.
If you get to the stage in life where you have to move into a retirement residence or you require in-home care, can you afford the cost? I don’t know what the cost of living in a retirement residence happens to be where you live. In in this day and age, however, at least CDN $6000/month is realistic where I reside. Imagine the cost in 10+ years from now!
Answers to these and many more questions will determine how much money will give you financial freedom. If you determine this figure is a ‘big hairy audacious’ goal, you need to step back and set challenging yet realistic objectives.
What Is An Objective?
Objectives are specific milestones you want to achieve in a limited period. Objectives must be precise, measurable, and time-based actions that assist in the achievement of the goal.
Consider objectives to be somewhat like ‘small steps’. If we could remember when we were very young, we would realize that we did not crawl and walk upright in a matter of minutes. Learning to walk was a process.
At such a young age we obviously did not consciously set objectives. Later in life, however, we should be able to think and plan. Much like share price behavior, we never know what the future holds. We must, therefore, create various scenarios when creating plans to help us attain our objectives and reach our goal.
If this is something you have never done, the services of a financial planner may be required.
Setting Objectives
Allow me to use my physical fitness objectives as an analogy to setting objectives on the journey to financial freedom.
The day after I retired in May 2016, I resumed regular physical activity.
Fast forward to December 1, 2024 when I stumbled upon a challenge to row 200,000 metres (200 kms or 124.27 miles) by December 24. The challenge initially appeared daunting until I broke down this big number to more manageable ‘bite size chunks’.
I envisioned missing some days at the gym so I imagined working out at least 20 days thereby making 10 kms/day appear challenging yet achievable.
The mind has a funny way of incentivizing us so I started with 10 kms but increased this to 14, 16, and 20 kms/day.
Rowing non-stop for this many kms is mind-numbing so I played a game. I counted how many pulls it would take me to achieve 1 km (~150 pulls). I then broke this down into 3 sets of 50 pulls. It got to the point where, without regularly looking at the monitor, I could relatively accurately determine how many kms I had rowed.
By setting a target and continually monitoring my progress, I completed the 200 kms on December 18.
At the beginning of January, I set a challenge to climb 2000 floors on the ‘stairmaster’ and broke down this challenge into more achievable ‘bit size’ targets.
I set the ‘stairmaster’ at maximum speed and ran 10 floors (1 minute). After each minute I would take a 20 second break. I repeated this process until I was doing 300 floors a day. Before I knew it, I achieved 2000 floors before mid-month.
With half a month remaining, I increased my target by 1000 floors. I, however, modified my challenge wherein I set the speed at a much lower level but carried 30 and 40 pounds to increase the level of difficulty.
By the end of January, I had completed ~3200 floors.
February’s challenge is 2000 hand release push ups; this way I drop ALL the way to the floor. As I compose this on February 4, I have reached 1800 push ups in 3 days; I took off a day because of travel. Since I am so close to my initial target, I have revised my target to 4000.
I break down this challenge into increments of 10 push ups. After every 10 push ups, I record completion otherwise I will lose count. In addition, I set a time limit by which the push ups must be completed. Since 600 push ups take me ~46 minutes, I must complete 200 in under 15 minutes or 400 in under 30 minutes.
How Do These Challenges Apply To Setting Financial Goals?
For various periods in the past 20 years I have interacted with parents and in-laws who have been in retirement homes and long-term care facilities. I have no control of how I will be mentally and physically down the road but I am doing what I can so I don’t end up like many of the seniors in these facilities.
In a follow up post I will touch upon the impact of physical health on our brain health. A critical aspect of physical and brain health comes down to setting objectives and having a goal.
Set Challenging Yet Achievable Objectives and Goals
There is a wealth of information on the internet if you require help in the process of setting objectives and goals.
Something important to remember is to set challenging yet achievable objectives and goals. Setting objectives that can be attained with your eyes closed is pointless. At the same time, totally ridiculous objectives is a waste of time and is also demoralizing.
Our circumstances are unique so set objectives and goals that are pertinent to you. You can certainly take into consideration suggestions others may propose but be careful. Suggestions from people who are not who you want to be or where you want to be are probably not worth considering. Do things most people are not prepared to do so as to increase the probability of achieving what most people will never achieve.
Objectives and goal setting apply to all facets of life. Someone drowning in debt, for example, should not set investing objectives and goals. I am not a debt counselor, and therefore, am in no position to offer any suggestions in this regard. I strongly suspect, however, that financial freedom is very difficult to achieve when financial worries take over your life. The focus should be on extracting oneself from the financial hole.
Final Thoughts
Setting objectives and a goal are critically important on the path to financial freedom.
The reason I present physical activity challenges in this post is to demonstrate how objectives and goals setting apply to various aspects of life.
I set a goal to become financially free the day I started working full time (mid-1980). Looking at my coworkers who had been working for years was my ‘eye opener’. I could not envision myself going to work day after day for some ungodly number of years. I made a commitment to live below my means and to save and invest a good chunk of my earnings. This enabled me to step off the hamster wheel in May 2016.
If setting objectives and goals is foreign to you, there is a wealth of information available. Two books about objectives and goal setting by David Goggins I have read are:
- Can’t Hurt Me
- Never Finished: Unshackle Your Mind and Win the War
Goggins might be better known for his memoir, Can’t Hurt Me. In Never Finished, however, he explores his strategies and actionable steps for using the power of the mind to reach what we may think is unachievable.
I wish you much success on your journey to financial freedom!
Note: Please send any feedback, corrections, or questions to [email protected].
Disclaimer: I do not know your circumstances and do not provide individualized advice or recommendations. I encourage you to make investment decisions by conducting your research and due diligence. Consult your financial advisor about your specific situation.
