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How to Set Goals and Take Charge of Your Wealth

March 12, 2019

How to Set Goals and Take Charge of Your Wealth

Setting financial goals and determining how to monitor your progress is the first step and arguably the most important aspect of managing your wealth. Without clearly defined financial goals, your financial future is left to chance. The exchange between Alice and the Cheshire Cat in Lewis Carroll's Alice in Wonderland sums it up nicely:


“Would you tell me, please, which way I ought to go from here,” said Alice.

"That depends a good deal on where you want to get to,” said the Cat.

“I don’t much care where—” said Alice.

“Then it doesn’t matter which way you go,” said the Cat.

When you first started out, goals such as providing your children with a solid education or achieving financial independence by a certain age were probably “where you want to get to.” But, in our experience, once people have achieved financial success, they often stop setting specific financial goals.

While likely not a conscious decision, going without specific financial goals can have more significant ramifications as we age. That’s the case for two reasons: First, the dollar amounts involved are typically larger, and second, there is not as much time to make course corrections.

If you don’t currently have concrete financial goals, this article and accompanying worksheet are your chance to get back on track and to be intentional about the future of your wealth.


Example: No Goal Versus Having a Goal

A simple example illustrates the stark contrast between having no goal (or a vague goal) and having a specific, action-oriented goal:

  • No Goal: We probably have more money than we need to live the life we want. Now, we need to figure out what to do with the excess.
  • Goal: Gift $30,000 annually to each of our three children as long as our net worth stays at $8 million or higher.

Can you see how a specific, actionable goal creates clarity, purpose and motivation?


Five Benefits of Having Specific and Actionable Goals

  1. Financial goals instill confidence and peace of mind
  2. Having a goal and a plan to achieve it makes you more likely to attain it
  3. Goals help you find new ways to maximize your wealth
  4. Goals keep you on track and provide a benchmark to measure progress
  5. Goals reduce procrastination


How to Set Financial Goals

Our worksheet, Setting S.M.A.R.T. Financial Goals, will help you set specific, actionable goals.

The acronym S.M.A.R.T. is an important concept to incorporate into your goal setting. It stands for: Specific, Measurable, Achievable, Relevant, and Time-based. To maximize the benefits of goal setting, incorporate as many of the five parts as possible.

Quantifying your goals as clearly as possible will make them easier to measure. Fortunately, most financial goals are relatively easy to quantify. For example, take the goal above about gifting $30,000 each year to children. You either give $30,000 to each child or you don’t; there is no gray area.

Finally, limit the number of financial goals you set to five or less. More than five can become unwieldy and demotivating.


Examples of Well-Defined Goals

Below are examples of goals that meet the five S.M.A.R.T. criteria.

Goal: Stop working at age 63 with investable assets of $5 million.

Goal: Organize all of our tax, investment, insurance and estate documents in a digital format by June 30, 2019.

 Download S.M.A.R.T. Goals Worksheet



Written by PartnersInWealth

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