It’s that time of year again. 2011 is almost gone, and 2012 is begging for this year’s batch of New Year’s resolutions. It’s also the time when we’re reminded how often people set goals that they are too ineffectual to accomplish, or ones that are simply unachievable.
So let’s make things different this year. Let’s focus on setting goals that we are not only focused on, but that are also achievable. Let’s also put together a plan to tackle them.
Every goal you have should be what I call “SMAC certified.” SMAC is an acronym for Specific, Measurable, Achievable and Compatible.
First, be very specific about your goals. If you are trying to plan for retirement, simply saying how much money you want to have when you leave the workforce is not a great planning step. But, if you describe exactly how retirement will look, including when you will retire, where you will live, what types of things you will do (including travel, etc.) you will have a much better chance of achieving that goal.
Also, it’s important to make your goals measurable. Saying you want to pay for your children’s college education is somewhat ambiguous. But saying that you would like to afford to send him to the University of Virginia and live on campus makes it very measurable. You know the current cost, you can adjust it based on inflation rates and the year your child will attend; therefore, you can figure out exactly how much you have to invest each month to fulfill your child’s college dreams.
Next, make sure your goals are achievable. If you want to pay off your mortgage, set a goal that is realistic. You may not be able to pay it off in five years, but ten years may be completely feasible. So work out the numbers to figure out how much more you would have to pay each month to be able to be debt free in ten years. Then start making those higher payments.
Finally, choose goals that are compatible with your life and your values. For example, if you love what you do at work but would like more time to do other things, don’t set a goal to quit working completely. You would probably be miserable. Instead, work out a way to work part time so you can still have the excitement of doing what you love, but also have time for other activities.
Every time you set goals, think of them with the idea of “SMAC certification.” This simple idea will get you from goal setting to goal accomplishing.
Good luck and happy investing.
Kelly Campbell, Certified Financial Planner and Accredited Investment Fiduciary, is founder of Campbell Wealth Management, A Registered Investment Advisor in Alexandria, Va. Campbell is also the author of Fire Your Broker, a controversial look at the broker industry written as an empathetic response to the trials and tribulations that many investors have faced as the stock market cratered and their advisors abandoned their responsibilities to help them weather the storm.