In Sid Savara’s article, Why 3% of Harvard MBAs Make Ten Times as Much as the Other 97% Combined, he cites a 1979 study that focused in on one question – “Have you set clear, written goals for your future and made plans to accomplish them?” The study reports that only 3 % of the MBAs wrote down their goals and their achievements were far above their classmates. While this study was a hoax (Savara points out in a later article) the basic principle for the study holds true – set goals and you will be more successful.
So, how do you set goals? Good question. Let’s first look at some bad goals and understand why they are bad. Then we will rewrite those goals. Note, these are goals I have set for myself in the past (bad goals in the past, and good goals today.
Examples of Bad Goals
- I Want To Be Rich – While this is nice, it is not a goal. It is a desire. You might as well be singing Billionaire by Bruno Mars. On a positive note, knowing what you want is the first step to setting a goal.
- Lose Weight – This type of statement still misses the mark. Losing weight is a direction, not a goal.
- Be a Better Person – Of the three examples, this is likely the worst goal statement. It is extremely vague and barely provides direction.
Examples of Better Goals
- I want to have $4 million dollars in cash, stocks and bonds when I reach 65 years old. This is a long term goal and is very specific. Note that an actual dollar amount is listed and a deadline.
- I weigh 185 pounds. This goal is very positive and very specific. It lacks a deadline that would make it more achievable. I rewrote this goal after reading The Secret by Rhonda Byrne. In the Secret, Bryne focuses on making your goals positive rather than negative. She argues that if your goal is to lose weight then you will keep losing weight and gaining it back because you are focusing on losing weight and not the target weight. Notice that the goal is also in the present tense. This is so you bring the future into the present.
- Never Get Divorced – Divorce can lead to financial ruin. Sometimes when setting a goal, you need more of a guide post by which to make decisions. In this instance, every time I do something that makes my wife mad, I remind myself of this goal, suck it up and apologize.
How to Set SMART Goals
- Specific – target a specific area for improvement.
- Measurable – quantify or at least suggest an indicator of progress.
- Assignable – specify who will do it.
- Realistic – state what results can realistically be achieved, given available resources.
- Time-related – specify when the result(s) can be achieved.
Let’s dissect these even further.
- Specific – You need be crystal clear about your goals. When writing your goal, ask yourself, “Can I be anymore specific.” In my above example about money, I am very specific about how I want the money saved. Notice I did not say four million dollars in assets. Otherwise, I would have counted my house or a business in that goal. I want to have 4 million in liquid funds when I am 65. My weight goal, on the other hand, could be more specific. I am just under 6 fee tall and at 185 pounds I could still be overweight. To be more specific, I could add measurements, such as body mass or the circumference of my waist. Adding the circumference of my waist could prompt me to do more ab exercises to reach my goal. Alternatively, I could be visually specific. I could find a picture of a man’s body and set that visual image as my goal. I want my body to look like this picture. The most important point about being specific is having a clear image in your mind about what you want to achieve.
- Measurable – One of my favorite quotes of all time is by Peter Drucker – “What gets measured gets managed.” By making your goal measurable, you have a quantifiable way to track your progress. Even my goal above, never get divorced, is quantifiable because I can validate if I am still married or not. However, I could be married but living in the guest bedroom. That is not a happy marriage. So how can I build a better measure for this goal? One way is to specify an amount of time I want to spend with my wife each week. A study on physician marriages found a link between marriage happiness and time spent together. I now have something concrete to measure and work toward by changing the goal to spend 28 hours a week with my wife. Now, when I am faced with the decision of where to write, I would choose to grab my laptop and go into the living room where my wife is watching television instead of staying in my library.
- Assignable – You need to assign roles so you know who is going to do what to accomplish your goals. In my financial goal above, note the use of the word “I”. Why am I using the word “I” when both my wife and I work. This goal should be changed to “We”. To go a step further, it needs to be more specific. My wife and I will max out our 401k accounts by age 40 in order to save 4 million dollars in liquid assets by time we are both 65 years old. Most of your goals will involve more than just you. Have you ever tried to lose weight by yourself when your spouse is not on board? It is impossible. Try eating a salad when your husband is having pie for desert. Part of my weight loss goal could incorporate how we eat together as a family. For example, we will only eat desert on weekends during the day.
- Realistic – When you set goals, one of the biggest dangers you will face is unrealistic goals. If I were 50 years old, setting a goal to save 4 million dollars by time I am 65 would be unrealistic if I don’t have a dime in savings. Likewise, setting a goal to lose 45 pounds in a month would also be unrealistic. You need to make your goals realistic, but at the same time ensure you are stretching. In my article earlier this week on types of goals, we discussed shortening your time frame to save for an emergency fund from 3 months to one month. While this would be difficult, it is possible.
- Time Related – The most valuable aspect of the SMART goal process is the deadline. All goals need a deadline. Notice in the financial goal where I set my deadline – by age 65. In my weight loss goal, I have no deadline. For me, a healthy weight loss is 10 pounds a month. I weigh 260 pounds so I could lose this weight over a period of 8 months. I could change my goal to read, “I will weigh 185 pounds by September 1st, 2014. This is tougher with my third, family oriented goal. How do you put a timeline on staying married. Since I changed my goal to measure the amount of time spent with my wife, I can add a duration. I will spend 28 hours a week with my wife every week of 2014.
My Goals Rewritten
Now that we know how to set goals – SMART goals that is – let’s rewrite the three goals above.
- I want to be rich becomes We will have 4 million dollars in liquid assets by age 65 through maxing out our 401k contributions.
- Lose Weight becomes I will weigh 185 pounds and have a 32 inch waist by September 1st, 2014 through eating 6 servings of vegetables a day, cutting out processed foods, and only eating desert on the weekends. My family will support me by keeping processed food out of the house and only eating desert on the weekends.
- Be a better person becomes I will spend 28 hours a week with my wife throughout 2014.
Your Turn to Write SMART Goals
Write your goals below in the comments and I will help you turn them into SMART Goals. Do know where to start? That is okay. Just start writing.
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