Chapter 9: Set Strategic Financial Goals
Book Serialization | Quality Value Investing: How to Pick the Winning Stocks of Enduring Enterprises
Welcome to Chapter 9 of the serialization of my next book, Quality Value Investing: How to Pick the Winning Stocks of Enduring Enterprises.
I am writing the book on Substack Finance as part of the QVI Newsletter and look forward to subscribers’ support and feedback as we produce the manuscript in real time.
Chapter 9 shares a simple yet powerful goal-setting template to support the quest to achieve savings and investment objectives relevant to our lifelong journeys.
Chapter 9
Set Strategic Financial Goals
Successful action follows those who first decide they deserve what they want to accomplish.
Reading books and articles on investing inspires many to rethink personal and professional goals and objectives. Yet most individuals struggle to set or attain their objectives, financial and otherwise, so a chapter dedicated to goal-setting strategies was in order.
Goal setting should be a part of every saver or investor’s toolbox—an actionable template or categorized approach to writing a practical plan for setting achievable goals.
Master simple concepts of setting and achieving goals to support your financial strategies. Although this chapter isn’t correlated directly to specific investment practices, its mission is for readers to apply its concepts to their money management objectives.
A Categorized Approach to Goal-Setting
Several years ago, I had the privilege of attending an outstanding self-improvement seminar in New York titled the Master’s Course. My favorite takeaway from the workshop was a goal-setting exercise based on a holistic approach to attaining excellence.
The template uses ten domains—or categorized essential areas of life—at both the personal and professional levels. It changed my life, or at least my approach to mapping it.
The Ten Domains
1. Spirituality
2. Family
3. Health
4. Education
5. Career
6. Money
7. Social
8. Leisure
9. Community
10. Projects.
To this day, the ten domains drive my short- and long-term goal-setting, supporting my effort to produce personal and professional outcomes for which I am proud as much as humbled. I have yet to find a more straightforward, productive course of action toward making the most of what is important and caring for those dear to me.
One of my primary goals is to make a living by making a difference in the lives of others, and, thus, the motivation behind writing the Quality Value Investing newsletter and book. It’s also an opportunity to share this timeless treasure of a structured goal-setting approach to pursuing excellence in one’s life.
As an investment book, Quality Value Investing isolates the Money Domain to present three highly effective categories for strategizing an effective goal-setting plan.
Any goal-setting strategy should be fun, creative, and attainable. Pursuing stretch goals, or hard-to-reach dreams, is essential for ensuring we are not taking ourselves off the hook. However, reaching our intended outcomes is paramount. That is why I recommend setting goals we are confident in achieving, complemented by expansive, more challenging ambitions.
How to Set Achievable Goals
Whether an aspiration, ambition, dream, target, purpose, or objective—whatever we call a goal—it is perhaps one of life’s most exhilarating and frustrating occurrences. Of course, achieving a plan may be the most rewarding of life’s moments. On the contrary, failing to reach a dream is one of its more painful experiences.
That is why it is crucial to set reasonable and attainable goals, thus giving us an increased opportunity for joy and, at the same time, leveraging against unwanted disappointment.
Authentic goals are indeed challenging. However, the relative difficulty level in achieving a goal makes it worth setting in the first place. For example, “I hope to wake up tomorrow” is not a goal but a probable reality for most individuals. However, it is an accomplishment without equivalency for someone with a chronic illness or life-threatening injury.
As such, readers should determine what is unique to them. What is the game changer? The elusive, although attainable dream? The simple accomplishment? What is the purpose of one’s life?
Goals are one-way private contracts that determine the perceived value of our existence, often providing a measurement of our self-worth. Therefore, it is imperative to keep things in perspective:
Never allow failure to define us or success to spoil us.
Instead, goals keep us moving forward in our sometimes hectic lives. Nonetheless, never let a failure—or an achievement, for that matter—become more important than life itself. Be humble in defeat as well as in victory.
Practical goal setting requires three general rules of thumb: planning, simplicity, and structure.
Have a Plan and Work the Plan
Regardless of the difficulty level or the personal importance of a dream, setting and achieving goals happen more often if we write them down. For that reason, it remains the first rule of goal setting.
Rule #1: Write your goals down.
Written goals have a higher chance of actual achievement. Goal setting is about creating and then working a plan. As life sometimes goes, the blueprint may not perform as intended, although by having a written plan worked with rigor, something good may happen when least expected.
Whether choosing a traditional paper notebook, mobile device notes app, or desktop software, write goals down clearly and concisely. Again, it is a contract with ourselves, so treat it as such by signing and dating the plan. Rewrite and edit, as necessary, until comfortable with the language and format. But write it down, read it often, and revise it whenever necessary or practical.
Life changes, as does the written plan that guides it.
Give the Plan a KISS
A practical approach to goal setting that is both believable and sustainable develops objectives for both short- and long-term ambitions. Keeping the written plan brief is crucial, which brings us to the second rule of thumb for practical goal setting.
Rule #2: Keep It Super Simple (K.I.S.S.).
As a fervent believer in the KISS concept—or the keep it super simple approach to investing and life—I update my goals at the beginning of the year by setting at least one annual objective for this calendar year and at least one goal that stretches beyond the year for each of the ten domains. I then occasionally visit the list to monitor progress, making adjustments as warranted by life’s fluid and ever-changing landscapes.
Of course, unexpected, distressing occurrences happen when pursuing goals. Tragedy and heartbreak notwithstanding, remember these words of wisdom:
The pain of change is long forgotten when the benefits of the change are realized.
Change is inevitable, and the stock market, investment portfolios, and savings plans are no exception. Moreover, change is the only consistent event we can count on. Thus, a critical component of any goal-setting exercise is the willingness to make necessary adjustments.
Regardless of any shift and the resulting discomfort, keep it super simple. Our chances of attaining our goals might multiply accordingly.
Write Goals the SMART Way
It may seem a redundant cliché, although using a well-worn acronym in goal setting could be the difference between success and failure in reaching our desired outcomes. Therefore, it’s the third rule of practical goal setting.
Rule #3: Be S.M.A.R.T. when setting goals.
Write and front test goals using George T. Doran’s SMART approach: specific, measurable, attainable, realistic, and time-bound,1 inspired by Peter Drucker’s legendary management by objectives concept.2
Doran suggests that we be specific when writing down our goals, ensure our ambitions are measurable, set only goals we believe are achievable, be honest in our self-assessment by committing to realistic and relevant targets given the resources available, and establishing time-specific deadlines to reach our objectives. For example:
As an avid learner, I will read at least one book on investing or personal finance each month during the hours I set aside in my calendar. Then, upon completion, I will write a brief narrative in my online diary of how each book enlightened me or changed my way of thinking about money.
The above illustrative goal is specific in its clear objective of reading a minimum of one book each month, measured by recording the results in personal calendars and diaries, attainable by allowing an entire month for reading at least one book amid a busy schedule, realistic in the sense the goal setter knows oneself as a passionate reader, and time bound in that they choose and record specific timelines.
The SMART goal-setting approach is imperative for achieving practical and workable objectives. Remember to integrate the SMART concept into each written goal.
The Essential Concept of Be→Have→Do
I hope readers do not skip this section because of its unusual title, as it is the most critical aspect of practical goal setting. The concept of be→have→do demonstrates why most individuals never achieve many of their goals.
When operating on automatic, humans tend to live based on a premise of do→be→have. For instance, “If I do this, then I will be that, and therefore, I will have this.” A typical example:
If I do save and invest lots of money, then I will be wealthy, and therefore, I will have financial security.
The typical person, on an average day and at the subconscious level, is inclined to set goals based on the lesser effective do→be→have state of being. On the other hand, successful goal-setters do not operate their life from the premise of favoring action above all else without first believing in and taking ownership of the objective at hand.
Most individuals don’t function from a place of self-ownership and thus set goals based on what they need to do. As a result, many have trouble achieving the desired outcomes of what they hope to be or want to have.
I submit that successful goal setters function in the rare conscious state of be→have→do. Take a look at how a mere reshuffle of priorities may result in a dream achievement never thought possible:
If I be someone worthy of wealth, I will have a sense of financial security. Then, I will do what is necessary to earn, save, and invest more money.
By moving toward favorable action, mindful goal-setters have first decided they are worthy of the wealth and the financial security it brings, thus creating a built-in motivation to earn, save, and invest more.
The concept of be→have→do is counterintuitive, albeit geared to the anticipated result of saving money or whatever the personal or professional goal. Individuals often operate subconsciously, influenced by a well-intended upbringing or external environmental influences. Each focuses on the action of doing before deciding they are worthy of being—and deserving of having—what is deemed essential.
The be→have→do conscientious approach to goal setting is unconventional, which is why it works. If conventional wisdom always prevailed, most individuals would succeed in their life’s pursuits, thus rendering self-improvement newsletters, books, and seminars to extinction.
By embracing the be→have→do concept, we first use the power of affirmation to be who we want to be, then drum up the courage to have what we want, and lastly, do what is necessary to achieve our stated goal. Successful action follows those who first decide they deserve what they want to accomplish.
Practice the cognitive art of be→have→do by first deciding to be worthy of our stated goals. Next, take ownership of what is essential to us, our loved ones, and our colleagues. Then, accomplish what is necessary—ethically and with care—to bring those goals to fruition.
Arguably, individuals do not change, although everyone can transform. So, embrace the challenge to recast through goal-setting. Begin with the destination in mind, remembering to enjoy the journey as the ride can be the best part of reaching our goals and dreams.
Exploring the Money Domain of Goal Setting
Did you hear that everyone earns the same amount of money?
It's called not enough.
Money is a highly personalized domain. However, it is wise to leave emotions out of our money management and set goals with purpose.
Ask for a raise this year? Invest more or more often? Hire a financial advisor? Build an emergency fund? Refinance a mortgage with a lower interest rate? Improve our credit rating? Construct a workable budget? We all know the possibilities for financial improvement are endless.
Pick and choose what is essential in the near term, such as eliminating a credit card balance or brokerage margin account, then reach for higher aspirations like paying off an onerous student loan. Treat personal financial management as a business and triumph.
To make more of it, consider doing what is most enjoyable and being the best possible at our chosen occupation or investing strategy. Money might follow our passion.
Pulling It All Together
In writing this chapter, I aimed to pass on what I was fortunate to learn at the Manhattan self-improvement seminar to as many interested readers as possible. The workable goal-setting template—focused on ten essential areas of life—that I took away from the training on that fateful day remains a powerful personal development tool. Nevertheless, remember that equipment left in the toolbox will not repair a thing.
Put these strategies to work and benefit from realistic goal-setting toward achieving investment objectives and financial dreams.
Here is a review of the elements of practical goal setting to keep us moving onward and upward in the savings and investment pursuits that fund life’s essential milestones, such as buying a home, paying tuition, sponsoring a wedding, underwriting a hobby, starting a business, or enjoying a comfortable retirement.
Set goals using a written plan, and then work the plan.
KISS the plan by keeping it super simple.
Make goals SMART, i.e., specific, measurable, attainable, realistic, and time-bound.
First, be who we want to be. Next, have what we want to have. Then, do what is necessary to fulfill our objectives in an ethical and caring manner.
May our achievable savings and investment goals and financial dreams come true. Whenever one does not manifest as expected—borrowing from the Spirituality domain—remember to keep the faith and persevere.
Copyright 2024 by David J. Waldron. All rights reserved worldwide.
About the Author
David J. Waldron is the contributing editor of Quality Value Investing and author of the international-selling book Build Wealth with Common Stocks: Market-Beating Strategies for the Individual Investor. David’s mission is to inspire the achievement of his readers’ financial goals and dreams. His work has been featured on Seeking Alpha, MSN Money, TalkMarkets, ValueWalk, Yahoo Finance, QAV—Australia’s #1 Value Investing Podcast, Money Life with Chuck Jaffe, LifeBlood with George Grombacher, The Acquirer’s Multiple, Capital Employed, Amazon, Barnes & Noble, Apple Books, the BookLife Prize, and Publisher’s Weekly. David previously enjoyed a 25-year career as a postsecondary education executive. He received a Bachelor of Science in business studies as a Garden State Scholar at Stockton University and completed The Practice of Management Program at Brown University.
Resources
Chapter content excerpted from David’s second book, The Ten Domains of Effective Goal Setting: Achieve Your Dreams in the Essential Areas of Life (Country View Imprint, 2016). Available worldwide in paperback and ebook at your favorite online bookstore.
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Disclosure: I wrote this book chapter myself, and it expresses my own opinions. I am not receiving compensation for it other than from Substack paid subscriptions.
Additional Disclosure: David J. Waldron’s Quality Value Investing newsletter posts, book serialization chapters, course modules, research reports, and real-time stock picks are for informational purposes only. The accuracy of the data cannot be guaranteed. Narrative and analytics are impersonal, i.e., not tailored to individual needs nor intended for portfolio construction beyond his family portfolio, which is presented solely for educational purposes. David is an individual investor and author, not an investment adviser. Readers should always engage in independent research or due diligence and consider, as appropriate, consulting a fee-only certified financial planner, licensed discount broker/dealer, flat fee registered investment adviser, certified public accountant, or specialized attorney before making any investment, income tax, or estate planning decisions.
George T. Doran, “There’s a SMART Way to Write Management’s Goals and Objectives,” Management Review, American Management Association Forum, 1981, 35-36.
Peter F. Drucker, The Practice of Management (New York: Harper & Brothers, 1954.)