Goal Setting for Financial Independence

In my past life as a corporate worker, I always dreaded goal setting exercises and performance reviews.  I did not appreciate the full concept of it until I started setting my own Financial Independence goals.  Without the resentment towards my day job, I’ve realized that having a large picture in mind, setting S.M.A.R.T. goals and breaking down the tasks is a fantastic framework for my annual goals.  This helps me focus on growth and has gotten me to where I am today and where I will be in the future.  

The other failure of corporation goal setting is that it ignored that it is people that are working these jobs. I dreamed of creating a company where people can use their internal why to drive their job behavior, set hours for themselves and be able to work from anywhere in the world. 

In previous articles, we have talked about having a roadmap to financial independence from a W2 job.  Now we will roll up our sleeves to do the first step to get us ahead of the curve for the year ahead.   

The best time to set goals are during the holiday season when most everyone else is taking a break and slowing down.   We encourage our students to set goals from Thanksgiving to the Winter holidays instead of starting in January. 

Life is Multidimensional

Life can be complicated.  There are times we can feel out of control or worse, on auto-pilot.  When we detach from the many different avenues life can take us, we will be at the mercy of our in-the-moment decisions, which isn’t as good as when we plan ahead, months in advance.  

Since life is multidimensional, your goals should address these areas.  We encourage our students at EZ FI U to not only set goals that get you closer to FI but to also enjoy the journey which you are creating along the way. 

Imagine you are running your life as a business, you would not want to set goals only for one department.  The first step in goal setting is to list out multiple categories of your life.  

Here are the categories I use for my goal-setting process:

  • Relationships

  • Business and Career

  • Personal Growth and Learning

  • Helping Others

  • Family

  • Health and Fitness

  • Fun

The Checkup 

Before we set our goals, we perform a thorough checkup to see where we are and how we feel. Past experiences coupled with learning from failures help pave the way to future success.  

Think about the different categories, or departments, of your life.  If you reflect upon your last year, you can write your successes and your opportunities for learning.  If you’ve had a goal from the past year, reflect on the work toward that goal.  Note what lessons you learned and what went well that you would like to repeat. 

The Big Picture and a Big Impossible Goal

If you do not have a big picture yet, it is a good time to dig deep and find out what makes you happy.  If you already have a big picture in mind, now is a good time to revisit your big picture and see if it is still the same.  As time goes by, people change.  What was important five years ago, may not be as important now.  Some of that change is external and some internal.  

It is an interesting year because we are in the middle of a pandemic.  It has caused hardships, but also has provided new ways of doing business and handling relationships.  Ask yourself this, “Have I considered the pandemic a problem or an opportunity?”

Your big picture should be exciting, tangible and perhaps impossible for you.  Even though your big picture is exciting, it should also make you a little nervous.  If you feel like you’re going to throw up when you think of your Big Impossible Goal, you’re doing it right.  

Now, start asking yourself WHY you think it’s impossible and explore what beliefs come up for you.  This is where you need to go to work.  If you think that something, let’s say a certain dollar amount of income, is impossible for you to make in a year, start asking yourself WHY and see what comes up.  Get to a Big Impossible Goal that feels exciting but uncomfortable.  

I reflect back on why I dreaded goal setting so much during my day job.  I realized that the big picture of the company goal did not excite me.  I was too far removed from the VP level to feel emotionally inspired.  I think leaders in large companies often fail to relate with employees to help them see that their effort matters in the large corporation.  As such, the mission statement seems to be empty and the big picture sounds removed from day to day life. 

Now, owning my own business, I can see how the big picture is super important.  More importantly, helping our employees understand the big picture is equally important.  It’s like the North Star, guiding how I run my business and my life. 

Write down a paragraph or two about your big picture and Big Impossible Goal and close your eyes to envision yourself having already achieved it. 

Setting Annual S.M.A.R.T Goals 

The next step in your goal setting exercise is to write down three to five annual S.M.A.R.T goals for each of the goal categories mentioned above.  Please refer to the Roadmap to FI article for creating a S.M.A.R.T. goal.  I am a big fan of 10x your vision. However, I am not a fan of 10x your goal.  I think it is a good exercise to think about how to 10x your goal and the system changes that you need to implement to disrupt your thinking. However, the power of positive reinforcement for you to keep motivated outweighs the negative reinforcement. This is why you need to set attainable goals that you can reasonably achieve in a year to keep you motivated. The best goals are just 20% above your current capabilities. It is challenging but not out of reach.  I like thinking that way because if you move fast and are a high achiever, your additional 20% will go a long way and at a fast pace.  However, if you like to take your time and move cautiously, your 20% extra will challenge your thinking but not make you feel exhausted and wanting to quit.  

I just revisited my goal for last year.  I have achieved about 90% of these despite the pandemic. This is a pretty good rate.  Picture yourself doing this exercise next year around the same time, you should be able to check off at least 80% of your goals. 

Translate Vision to Concrete Numbers

Translating vision into concrete numbers is an exercise I do to make my goals real.  I like to assign a timeframe or number to my goals.  Here are a few of my annual goals so you have an idea. 

  • Business - Raise $5M 

  • Business - Increase my database of investors by 2,000

  • Education - Read 12 marketing-related books

  • Relationships - Interview 50 influencers that have more than 10,000 followers on my podcast, 10,000 Roads to Financial Independence

  • Helping Others - Help 100 students get into their first multifamily rental deals 

Do you notice that each of these has a number attached to it?  This makes the next step of goal-setting very easy. 

What happens if you do not know what it takes to achieve your goal?  For example, if you want to invest in a multifamily, how do you know where to start?  This is a good thing as it means you are challenging yourself.  Do you really need to know the fine details of how you will be able to purchase a multifamily deal before you set up a goal that you will acquire one multifamily deal with 100+ units by the end of the year? Chances are that you don’t. 

However, identifying the unknowns also helps you set up your learning goal.  Not only are you setting a goal, you are also going to add this to your learning goal to talk to at least five people who already own at least one 100+ unit community, or dedicate $10K to learn about the topic next year. 

Lastly, this exercise was beneficial to other aspects of my life as it forced me to have a commitment to my family, continue my education, be in good health and have fun.  If you have an entrepreneurial spirit like me, you are likely going to overwork yourself and ignore other aspects of life.  It is important to remember that curbing your enjoyment can be an undesirable habit.  Our time on earth is not entirely up to us.  You don’t want to spend all your life aiming at the future and miss the wonder right in front of you.  Our kids will be grown and we will get old.  Things that we want to enjoy may not be there anymore once we get to the “future.”  After all, isn’t this why we want an FI lifestyle to begin with? 

Go ahead and set your Family, Education, Health and Fun goals with a number.  Here are a few of my goals in these areas.

  • Fun - Visit five national parks and create a painting on site. 

  • Fun - Spend two days a month soaked in Korean Soap Drama

  • Health and Self Care - Go to my dermatologist for skin care once a month. 

  • Family - Spend one day, uninterrupted, with my family every week. 

  • Education - Attend a Tony Robbins Course without kids

  • Relationships - Spend at least two months with grandma

Chunking It Down

The last step of goal setting is to chunk the goal down to weekly actionable items.  It is one thing to set a goal and it is another to meet it.  How many times have you set your goals and forgotten about them until the end of next year and realized that you totally missed it?  To make a goal real, you need action plans.  

Chunking it down is an exercise we use to break down our goal to quarterly goals and weekly tasks to move us towards meeting the goal one step at a time.  For example, to raise $5M where each person invests $50K will require 100 investors.  In order to connect with one investor, you need to have 10 leads, assuming 1 out of 10 leads become an investor.  Hence, you need 1,000 leads.  This means that you need to meet three people a day (1,000 people/365 days=2.72 people/day).  Now, you have a more concrete goal of meeting three people per day or adding three people to your database each day. That is very concrete.  You either do it or you don’t.  Its measurable and realistic.

At EZ FI University, we help our members set their goals every year and create action plans to meet these goals so they retire faster than they ever thought possible.  This takes dedication, discomfort and support from peers. To learn more, schedule a free consultation here.