SMART Goals for Financial Freedom

There are 2 ways to work towards your financial freedom:

1.    Figure out how much money you need annually to live comfortably, to at least maintain your current standard of living. Then, take that number and divide it by 0.4% to find out the total amount of money you need to have set aside. When you invest this money (once your reached your number) and generate at least 4% interest, it will generate the income you need.

2.    Figure out how much money you need annually to live comfortably, to at least maintain your current standard of living. Then, work on building assets that generate enough money annually to provide that amount without you holding a job. These assets can be: real estate investments, businesses, investments.

Visualization of your goals is important, and so is planning. You either plan your work, and then work your plan; or you fail to plan, and then you plan to fail. The reason why planning your finances is probably your most important plan, is that all your dreams and goals will be in some way connected to money.

Writing down your goals and having a vision board will help you find ways to achieve your goals; your brain will come up with ways to lead you to what you most desire. Which also means you must be very certain that your really desire those things you claim to want. Part of the planning and mapping of your goals will include coming up with the money to achieve some of your goals. Of course some goals like happiness and health don’t have a price tag. Others like a trip, college education or a new house or car, come with a price tag that must be known.

It may seem simplistic to say that if you know how much something costs you can start working on achieving that. However, even though it is simple, that is how it is done. I’m not saying it is easy – otherwise everyone would achieve their goals. But it is simple – in 3 steps: see it, map it and plan it. All that is left is the hardest part: doing it.

When setting your goals, keep in mind that they must be SMART in order for you to reach them: Specific, Measurable, Attainable, Relevant and Time-bound. In order for you to achieve your goals, they have to fit in this SMART description. So if your goals are vague - ie. I want more clients, I want to make lots of money - you need to redefine those goals. It is not good enough to want more money; your brain does not work on anything so vague. So think instead: How much money? ("a lot" is not a number - therefore it is neither Specific, nor Measurable) When do you want to have the money by? (give yourself a deadline) And, perhaps most importantly, make sure your goals are Relevant: do you really want it? Is it Relevant to you?

If you are a successful business woman, whether you own the business or lead a corporation, you probably rely on a board of advisers. You may call them mentors, business partners or directors. They are your sounding board when it comes to ideas regarding business growth and what is the best way to implement new ideas to achieve the objectives. But how about your financial life? Do you have a board of directors to run your ideas by? Do you have an accountant who knows your like and your story to help you lower your taxes? Do you have an investment adviser who looks out for your best interest in a fiduciary capacity?

Wishing well

Have you contributed to this?

I had to share this picture from the Lewis Ginter Botanical Gardens. I found it so important to share that I decided to put it on the blog, and not just have a couple of lines about it on Facebook.

You may wonder what is so important about this picture…. Well, it is just another wishing well. (Excuse the pun!) But it made ME wonder what people are thinking to just be throwing money in this little pool of water created for decorative purposes.

Looking at the coins resting at the bottom of this little decorative waterfall, I had to wonder how many “wishes” (meaning coins) collect there over the course of the year… and then, also wonder how many of those wishes are money-related, i.e. pay off debt, save for a vacation, buy a new house, buy a new car, etc. Has any of the wishers considered saving that penny, or nickel, or dime, or quarter and put it toward achieving that goal?

Some of you might know the story of the penny that doubles every day for 30 days… I guess the people how throw money way like this, don’t know it. I know you are going to say that nobody nowadays will double your money daily and make you a millionaire in 30 days. You are probably right. But you also have to agree that if you keep your money instead of literally throwing it away, you have more chances or multiplying it. And if a penny won’t make you a millionaire, no problem. Keep your penny, and find some friends for it – in your piggy bank, in your pocket or in your bank account. You will be richer with all your money rather than just some of it, won’t you?

This is not a way of saying you should not give, or help others, by any means. This is just my way of saying that you can and should do what you want with your money – as long as your decisions are wise, and well thought out. And if your choice is to support Lewis Ginter Botanical Gardens, I will commend you on a wise decision. Give them a donation (from your bank account, tax deductible) and not the change in your pocket thrown in the wishing well.

Another thought that came to mind was the example that we set for the children when we teach them it is OK to throw money away, and that it will bring us more money and more of what we want. What will they think, and how is that going to impact their future?