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SMART is an abbreviation for goals that are Specific, Measurable, Action Oriented, Realistic, and Time-Bound. The idea is to avoid general, vague or hazy goals such “I want to be rich.” Exactly what does rich mean to you? Is it having $100,000, or $1 million in the bank? Also, what’s your timetable and/or deadline?
The Importance of Written Goals
You must have precise, written goals – not ideas in your head. If you can’t come up with your own written goals and the plan that will get you there, find a local financial planner for help. You can contact one in your area through the Financial Planning Association at 800-647-6340 or www.fpanet.org. Another place to find a fee-only financial advisor is the National Association of Personal Financial Advisors at www.napfa.org or 800-366-2732. Finally, many accountants also offer financial planning services. To find one, contact the American Institute of Certified Public Accountants: www.aicpa.org or 212-596-6200.
In my first book, Investing Success: How to Conquer 30 Costly Mistakes & Multiply Your Wealth! I told readers about the importance of having SMART goals. I also explained that people who set written goals overwhelmingly fare better than those who do not. Put yourself with the first group – among those with written goals – if you want to get ahead financially.
Consider Your Short, Medium and Long-Range Goals
I’d like to guide your thinking now toward short-term, medium-range, and long-term goals that you may want to pursue. Short-term goals are those you can accomplish in one or two years at most. Medium-range goals will take two to 10 years to achieve. And long-term goals require you to save or invest for a decade or longer. Here are some goals to which you might aspire:
- Paying off student loans
- Eliminating credit card debt
- Building up an emergency cash cushion
- Buying a new car or a second automobile
- Starting a business
- Saving for a down-payment on a house
- Investing in the stock market or in real estate
- Retiring comfortably
Your Retirement Aspirations
Financial advisors say one of the most frequently asked questions from their clients is: Am I financially prepared for retirement? Yet far fewer people take time to ponder another, equally pressing query: Am I emotionally ready to retire?
Certainly, leaving the full-time workforce has serious financial implications. But too often, experts say, economic issues overshadow important emotional considerations.
So if you’re planning for your Golden Years, do take time to enhance your retirement I.Q. – ensuring, among other things, that you’ll have a healthy-sized nest egg.
But before you retire, don’t forget to boost your retirement E.Q. (Emotional Quotient) as well. To ease into retirement with a lot more peace of mind, consider these three questions now – before you bid Corporate America or your current job farewell.
Next – Day 14: Create SMART Financial Goals (Part 2)
