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Understanding Goals

Goal setting is certainly not a new concept. We have all heard about the importance of having goals. For example, we know that Olympic and professional athletes have goals and constantly strive to achieve them. Amazingly though, less than 3% of the population has a written set of goals. Furthermore, less than 1% review their goals on a regular basis.

Having a goal enables you to focus your energies on devising ways to achieve it. When someone makes a decision and begins focusing on achieving a specific goal (and even better in a specific period of time), the powerful subconscious mind goes to work and begins playing with ideas and developing strategies of various ways to bring about the successful completion of the goal.

Why Set Goals?

Purpose:

Goals give your daily and long term actions meaning and purpose. This helps you stay motivated when you realise that you’re engaging in certain financial behaviours for a reason and not just randomly acting.

Accountability:

Goals also make you accountable. If you find that you’re regularly falling short of your goals, it could be that you’re not really committed to them.

Structure:

Goals provide a framework or structure from which you can operate and achieve your objectives. Many of us need this structure to plug away at reaching our goals, especially long range visions.

Discipline:

Goals spur you along to be consistent and disciplined in your actions since you know that a lack of discipline on your part will cause you to deviate from your plans, thereby jeopardizing your chances of hitting your goals

How Do I Set Goals?

Goals should be written and it is also important to set the appropriate type of goals. SMART is an acronym that describes goals that are:

Specific

Measurable

Action Based

Realistic

Time frame

Power Of Written Goals

Survey of Harvard University students*

A compelling example of the power of written goal setting is represented in a 1979 survey of Harvard University students which found that 84 percent of them did not set goals. Another 13 percent of them did set goals, but did not bother to write them down. And only 3 percent of the graduating class had written goals and an action plan. Ten years later, researchers resurveyed the group. The 13 percent with unwritten goals were earning double the income of those with no goals. But the 3 per cent of the student population with written goals earned ten times as much as the other 97 per cent.

harvard-goals

What you need to know

This information is provided by Invest Blue Pty Ltd (ABN 91 100 874 744). The information contained in this article is of general nature only and does not take into account the objectives, financial situation or needs of any particular person. Therefore, before making any decision, you should consider the appropriateness of the advice with regards to those matters and seek personal financial, tax and/or legal advice prior to acting on this information. Read our Financial Services Guide for information about our services, including the fees and other benefits that AMP companies and their representatives may receive in relations to products and services provided to you.