Goal setting is one of the most important time management skills you need to learn if you want to turn your ideas into reality. An idea without a goal is just a dream; but with appropriate goals your ideas becomes plans, get broken down into manageable chunks and can be achieved.
Smart investors will broadly use ‘The Golden Circle‘ when setting goals, most likely by default as opposed to because they have been taught to do so. This is because it is the approach they have most likely had the most success with. The Golden circle at the heart of inspiring any form of behavioural change is always the Why, followed by the How, and finally the When.
Setting goals provides a sense of purpose and direction and allows us to focus on achieving what matters most to us. It is a way we can practice mindfulness, become more efficient with our resources and sharpen our focus onto exactly what is required for healthy progression and development.
What do you do when you are asked to eat an elephant?
Why: Why am I going to do this?
How: How am I going to eat this elephant?
What: I’ll take one bite at a time. Starting with the scotch fillet…
For larger tasks (like eating the elephant), you’re going to have to break this down larger goal into many smaller, actionable steps that you can take to work toward that higher goal. Our brains naturally release the pleasure chemical Dopamine when we experience success, so chunking or breaking down larger goals into many easier smaller goals is an easy bio-hack to keep you motivated!
Expanding on the Golden Circle is the complimentary concept of setting SMART goals. For a Goal to be SMART, they need to be;
Setting SMART goals increases the chance that you will achieve them.
First up, your goal needs to be specific. Sweat the details, and think of the:
- Who is involved?
- What do I want to accomplish?
- Why do I want to achieve this goal? [This is arguably the MOST important motivating factor]
- When do I want to achieve it by?
- Where will I achieve this goal?
- How will I achieve this goal?
Want to get in shape? Don’t just say “I want to get in shape”. Instead say…
- Who? I want to improve my physical fitness, I can train with my friends, partner and family, and perhaps a fitness coach or instructor.
- What? To become stronger and improve my cardiovascular ability. I want to be able to dead-lift double my body weight and also run 5km in under 30 minutes.
- Why? To remain medically healthy, competent and competitive in my abilities, and attractive to my partner.
- When? I want to achieve this by at least within a year or less.
- Where? I can train in the gym, at the local running track and at home.
- How? I will train regularly and break my goal down into smaller goals so I can keep track of my progress.
Your goal needs to be measurable or have some measurably quantity or criteria so that you can evaluate your progression. Rome wasn’t built in a day, and neither will your dreams be. By setting a measurable goal, you can review how your going in order to keep yourself on track. Things to consider are
- What am I measuring?
- How will I know if I have reached the goal?
- How will I measure my progress towards the goal?
Going back to our fitness example
- I am measuring the amount of weight I can physically dead lift using an Olympic barbell and good lifting technique
- I am measuring how quickly I can run a 5 km running track in fair weather with appropriate running attire
- I will know I have reached my dead lift goal as the amount of weight I can safely and uncontrollably lift will be doubly my body weight
- I will know I have reached my Cardio goal as I will be able to run a 5km track in under 30 minutes
- I will know I am on track to reaching my dead lift goal because over time I will be able to see myself adding more plates to the bar
- I will know I am on track to reaching my cardio goal because I am timing my runs and I will be able to see the time improving each week
There is probably no point in saying you want to become a millionaire overnight (unless you want to become a criminal or something and rob a bank). Its important to be realistic, and set yourself achievable goals. The idea here is not to doubt yourself or scare yourself off of achieving your dreams; you should definitely be setting goals to stretch and challenge yourself, but if you set unattainable goals, you will likely fail and become demotivated or miserable.
- How can I achieve this goal?
- How realistic is this goal based on my constraints such as time, money, ability and location?
The best way to keep goals achievable is to chunk them. That is to say, break them down into manageable sub-goals. If you want to become a millionaire, then that is an awesome goal. But lets be realistic and set an achievable goal rather than something unattainable. Rather than becoming a millionaire overnight, lets instead set the Achievable time-frame of ‘by the time I am thirty’.
This global or ‘long term’ goal of becoming a millionaire can then be chunked or broken down into many smaller, achievable goals such as;
- I will achieve a savings rate of at least 80% of my post tax income.
- I will limit myself to a $40 grocery budget per week.
- I will make a fortnightly investment decision of $2500+ to put my savings to work as early as possible.
- I will make $100 a week from my side hustles.
- I will read at least one finance book per month
What about something else? If you want to become an Olympic gold medallist, then that is an awesome goal. But be realistic and set an achievable goal rather than something unattainable. Rather than saying ‘I want to win the Olympic Sprints next year’, instead set an achievable goal such as ‘I want to perform at the peak of my ability in the 100m sprint and compete professionally’. This global or ‘long term’ goal of becoming a professional sprinter can then be chunked or broken down into many smaller, achievable goals such as;
- I will train 6 days a week on a recommended sprint athlete training profile
- I will seek a professional athletic sporting coach to help me train and meet with them twice a week
- I will eat a healthy diet which is recommended for athletes by professionals in order to achieve my bodies macro and micro nutrient requirements
- I will learn about the human body by reading an hour a day on body science and running
- I will seek out and read autobiographies and books of successful athletes, and try to meet as many as possible.
Now it gets a little tricky here, as these smaller goals should still be SMART – feeling like its inception and there is too many layers yet? 😅 by breaking down the achievable goal into many smaller goals, you benefit from the positive spiral of success. Having achieved your goal, you feel good right? Who doesn’t like ticking completed items off a list?!
There is a reason for this. Your brain feeds massively off of this positive feedback, and will actually give you a rush of the motivating ‘pleasure’ chemical Dopamine, a neuro-hormone (combined hormone / neurotransmitter produced by the Substantia Nigra and Ventral Tegmental areas of the brain) which will help you take action towards your future goals, desires and needs. Its a basic survival mechanism inbuilt right into our biology, in order to help us succeed!
Setting relevant goals ultimately means setting goals that actually matter to you, and that you want to achieve. Remember when we said the ‘WHY’ of setting specific goals was probably one of the most important factors? This is because if you don’t really care about your goals, you probably won’t achieve them.
For example, the 21/90 day rule is often quoted when trying to change behaviours. It is proposed that it takes 21 days of actively working on a behaviour to build a habit, and a further 90 days of actively continuing that habit to build a lifestyle.
During those 21 days, that behavioural action is not autonomous, it is not yet in our subconscious, we are not on autopilot. In order to do it, you have to consciously think and make an effort to do so. One of the great Physicists Sir Isaac Newton showed that objects at rest or in uniform motion continue to do so unless acted on by an unequal force – the same can be said for our behaviour!
That unequal force we need to apply comes from our motivation. And a huge part of motivation comes back to the question of ‘WHY’. Why am I trying to achieve this goal? Think of all the incredible transformations that have taken place in our world; from social movements, to businesses and conflicts, great leaders always start with the ‘Why’ to inspire their people.
Mastering the ‘Why’ keeps our goals relevant.
- Is this goal worthwhile?
- Is it the right time to be working on this?
- How does it fit in with my other goals, needs and wants?
- Is it applicable to my life?
- Am I willing to sacrifice other things to achieve this goal?
The Final attribute to a SMART goal is being Time-based! In aviation I work in a time sensitive environment, so we are all acutely aware of the time factor in most situations. To deal with this, we use a standardised framework to let us move from the unknown back to the known. This helps us take control in order to most optimally and safely solve a problem. The frame-work I use is ‘GRADIE’
- Gather: Gather all the facts, evidence and indications
- Review: Review the situation to fully understand what is happening
- Analyse: Analyse potential courses of action and outcomes
- Decide: Crew discussion and decide on a course of action
- Implement: Implement the chosen course of action
- Evaluate: Close the loop and decide if its actually working
When setting SMART goals, you must consider the time based factor. This can be as simple as setting a timeline for you to review your progress. For my Journey to FI, I apply the Time Based factor by having monthly Net Worth updates where I track my progress and see what is and isn’t working. I also do a big review at the end of the financial year when I file my taxes.
You could consider:
- When do I need to achieve it, is there a Dead line?
- When do I personally want to achieve it?
- What time interval should I review it at?
- What can I do Today?
- What can I do this week?
- what can I do this month?
- What can I do this year?
Learning to set goals by first starting with the Why, then moving to the How and finally thinking about the What will greatly help you to inspire the motivation for behavioural change required to achieve your goals. Learning to set goals that fulfil the SMART criteria will help you to achieve them, unlocking your brains natural superpowers and full potential.
Do you have any fantastic goals? I sure hope this has inspired you to revisit your Long term (global) goals, medium term, and short term daily (or progress) goals.