- Date : 23/11/2019
- Read: 4 mins
A simple flow of activities designed to help you achieve the long-term financial goals in your life, through thorough initial planning, regular monitoring and review.
The success or failure in achieving our goals depends not only in the chase but also how well we identify and finalise the goals in the first place. When it comes to achieving long-term financial goals, it is probably harder because our efforts have to stand the test of time. We may lose out to an eventual lack of focus, bad planning or simply the temptation of shifting the goalpost. Although it is easier said than done, there are a few tried and tested approaches which can significantly help us achieve our long-term goals. Let us look at them.
1. What do you want?
People always confuse their wants with their wishes. Having a certain amount of post-retirement income can be a want, but owning a Ferrari is more of a wish. The first step is to think hard and identify what is it that you want? It could be about saving for your child’s future or building your dream house or something else that matters a lot to you.
2. Translate wants into goals
Goals are what you need to achieve to get what you want. Financial goals are specific objectives in your life, which are both measurable and achievable. For example, ensuring higher education for your child is not a particular goal, but saving a certain amount of money for his or her law degree from Harvard is a much more specific goal.
3. Cross-examine the goals
By cross-examining the goal, you will be able to identify the root cause of your want. Continuing with the above example, why do you want your child to be a lawyer and not a businessperson or an engineer, and why only from Harvard and not National Law School? You would have valid justifications for these, however knowing all about the financial requirements of your goal thoroughly is necessary to keep yourself on track later.
4. Break up the goals and their timeline
A long-term financial goal may seem like a bridge too far, especially at the onset. However, breaking the goal into sub-parts will help you visualise it as an achievable sum of parts. If your child is ready for college in 15 years, you can plan how much money you need to save in the first five years and how much in the next, and so on. Similarly, to make sure he or she gets into a reputed college, you have to make sure that the child gets into a good school, maintains strong academic performance and develops the required soft skills.
Related: Why long term investments are better
5. Create a back-up plan
What if you are not able to accumulate the finances? How will you cope with the failure? Will you cease all efforts or try for the next best thing? You should visualise the scenario where you fail and accordingly have a back-up plan in place - be it a back-up way of arranging the money or the next best plan.
6. Mould your lifestyle
Your present habits and lifestyle may stand in the way of your goals. You possibly cannot save sufficient money if you love extravagance, for example. You will have to make long-lasting changes to your lifestyle and habits in a way that helps you to achieve your goals.
7. Monitor your progress
Staying on track over a longer period is the real challenge while pursuing a long-term goal. Regular monitoring of your performance updates you whether or not you are on track to achieve your goal. If you fail to save the required amount of money after a specific period, look for the causes and correct the same.
8. Identify risks and how to overcome them
You will have to identify the possible reasons because of which you will not be able to achieve your goals. These are the threats facing your goal. Your task would be to device a way around these so that you overcome them and achieve your long-term goal anyway.
9. Motivate continually
It is essential to keep yourself motivated on your path to your goal. Sometimes the best thing to do is to distance yourself from the intensity and focus and take a well-deserved break. Take notice of the achievement of your sub-goals and celebrate the success, before setting your eyes on the next sub-goal.
The approach adopted by every individual is different, and there is no right or wrong way of pursuing any long-term goal, as long as the approach helps them achieve it. However, we hope that by following these techniques, you will get the clarity and the drive required to achieve the long-term financial goals in your life.