Category Archives: Goals

Goal Setting and Accomplishment

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“Since “someday” never appears on the calendar, our good intentions don’t turn into action until we create deadlines.” Amy Morin

A staggering 92 percent of Americans that set New Year’s resolution goals never actually accomplish them, according to research by the University of Scranton.

But, when people followed two simple concepts — setting specific and challenging goals — it led to higher accomplishment of goals 90 percent of the time, according to research by Dr Edwin Locke and Dr Gary Latham. Basically, the more specific and challenging the goals you set, the higher your motivation toward hitting them while your easy or vague goals rarely get met.

Here’s an example: If your goal between now and the end of the year is to, say, lose 20 pounds, that  may be challenging, but it’s not specific enough.

It’s essential to eliminate vagueness and make it more achievable by stating it in a more detailed manner: During the month of August, I will lose five pounds by cutting off refined sugar, breads, and all fast food. I will also walk briskly for twenty minutes every day.

On the flip side, goals that are too difficult to accomplish don’t get met either. While it’s important to challenge yourself, nobody completes a goal when he/she is overwhelmed by the magnitude and difficulty in accomplishing the goal.

If you find yourself with such a scenario, break down your BHAG (Big Hairy Audacious Goal) into smaller bites you can actually chew. Use the same process of defining specific and challenging marks to hit when mapping out the smaller goals that will lead you to your final destination.

Additionally, those who succeed at accomplishing their BHAG, they tend to want it badly. So, it’s essential to determine what is your level of commitment? Are you totally committed to reaching your goal even when obstacles occur along the way? Are you committed to “do whatever it takes” to reach your destination. And, do you have the desire or passion to pursue the goal to reach it.

According to Locke and Latham’s research, there are five goal setting principles that can improve dramatically your chances of accomplishing your goals:

  1. Setting Clear Goals. Write your goal down and be as detailed as possible. Use SMART, and consider putting your goal into the form of a personal mission statement  for added clarity. Think about how you’ll measure your success toward this goal.
  2. Setting Challenging Goals. Look at your goal. Is it challenging enough to spark your interest Also, identify ways that you can reward yourself when you make progress. Incremental rewards for reaching specific milestones will motivate you to work through challenging tasks.
  3. Staying Committed. Stay committed by using visualization techniques to imagine how your life will look once you’ve achieved your goal.
  4. Gaining Feedback. Schedule time once a week to analyze your progress and accomplishments. Look at what has and hasn’t worked, and make adjustments along the way.
  5. Considering Complexity. Break large, complex goals down into smaller sub-goals. This will stop you feeling overwhelmed, and it will make it easier to stay motivated.

“Even if your goal is something that will take a long time to reach — like saving enough money for retirement — you’re more likely to take action if you have time limits in the present. Create target dates to reach your objectives. Find something you can do this week to begin taking some type of action now.” Amy Morin, Psychotherapist and author of ’13 Things Mentally Strong People Don’t Do’

Additionally, the following strategies can increase your likelihood of accomplishing your goals:

  1. Break goals into manageable chunks. If you only focus on the big picture, it’s easy to put things off until later. But, if you break those goals down into smaller, more manageable objectives such as, you can start tackling and accomplishing the manageable chunks today.
  2. Establish “now” deadlines. Even if your goal is something that will take a long time to reach – like saving enough money for retirement – you’re more likely to take action if you have time limits in the present. Create target dates to reach your objectives. Find something you can do this week to begin taking some type of action now. For example, decide “I will create a budget by Thursday,” or “I will lose two pounds in seven days.”
  3. Turn abstract ideas into concrete action steps. Abstract ideas encourage inactivity. Saying, “I’d like to be healthier,” won’t help you reach those goals. Establish concrete action steps that you can start doing today. For example, decide that you’re going to take a class, read a book, or conduct 30 minutes of research each day. Identify behavioral changes that you can begin working on immediately and you’ll be more likely to turn your abstract ideas into reality.

Identify some of those goals and dreams that you’ve always wanted to work on but just never had the motivation to start. Look for strategies that will help you view those goals in terms of the present and you’ll increase the likelihood that you’ll start taking steps to turn those dreams into a reality, explains Amy Morin

Goal setting is something that many of us recognize as a vital part of achieving success in the areas of health, wealth and emotional well-being. Understandably, goal-setting research confirms the usefulness of SMART goal setting.

To use the results of the research, you must set clear, challenging goals and commit yourself to achieving them. Be sure to get regular feedback on your progress towards achieving your goals. Also, consider the complexity, and break your goals down into smaller chunks, where appropriate.

If you follow these simple rules, your goal setting will be much more successful, and your overall performance and accomplishment rate will improve.

The path to building wealth and financial freedom is paved with goals!!!

References:

  1. https://www.inc.com/marcel-schwantes/science-says-92-percent-of-people-dont-achieve-goals-heres-how-the-other-8-perce.html
  2. https://www.mindtools.com/pages/article/newHTE_87.htm
  3. https://www.forbes.com/sites/amymorin/2014/09/04/study-the-secret-to-ending-procrastination-is-changing-the-way-you-think-about-deadlines/

Prioritize Your Happiness

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Prioritize. Spend on the things and on the activities that make you the happiest.

Most people spend their lives sacrificing their own happiness either because of career pursuits or chasing riches. You fail to realize how important it is to value your own happiness and taking care of yourself.

As a result, you unconsciously stumble into a busy and fast paced lifestyle. And, there never seems to be enough time to do the important things you really want, like exercising, hanging out with friends, or attending a wealth seminar. Yet, with so much already on your plate, how can you fit it all in?

In Work Less, Live More (Nolo Press, 2007), Bob Clyatt argues that you can make time for fun stuff. The secret, he says, is prioritizing:

“Imagine you have an empty jar, a collection of a few large rocks, and several handfuls of gravel. Your task is to put all the large and small rocks into the jar. One approach would be to pile all the gravel first, but doing so would leave room for only one or two of the large rocks; you wouldn’t get everything to fit. Switch your approach and put the large rocks in first, and you’ll find that the gravel will all fit nicely around the empty space. If a bit of gravel doesn’t fit at the end, you’ve not lost much.

Let too many little things take priority, and there never seems to be time for the big things. Consider the Big Rocks to be really important things you want to accomplish in life, the things that define you. Get the big things in first, work on the right projects and priorities, and let the little stuff fit in around the edges. Let your Big Rocks be non-negotiable priorities in your weekly calendar—and learn to say “no” when other things begin to intrude. Then fit those other things in where you can.

So if exercising makes you happy, schedule your exercise—and then fit the rest of your life around them. Don’t ignore your obligations, but make the stuff you have to do fit around the stuff you want to do, not the other way around.”

What you buy matters too in making you happy. You are happier when you use your money to buy experiences rather than things and when you use your money to help others. So the next time you are feeling down, buy a trip to the spa or donate to a charity.

Thus, your happiness lies in things that you love to so. Therefore, it is important to find time to do all the activities that bring joy to your life. You must prioritize taking time out of your day to spend time on your favorite activities and hobbies that makes you feel refreshed and content.

Bottomline, each day is a new opportunity for you to choose to live a life filled with purpose and happiness. You must consciously and intentionally prioritize to be happy on a daily basis. Otherwise, it’s easy to get stuck in a rut for months or even years.

“Putting yourself first is not selfish. Quite the opposite. You must put your happiness and health first before you can be of use to anyone else.” ~Simon Sinek

References:

  1. https://www.oreilly.com/library/view/your-money-the/9780596809430/ch01.html
  2. https://www.beingguru.com/2019/04/prioritize-your-happiness/

Persistence and Perseverance

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“Nothing in the world can take the place of persistence.

Talent will not; nothing is more common than unsuccessful men with talent.

Genius will not; unrewarded genius is almost a proverb.

Education will not; the world is full of educated derelicts.

Persistence and determination alone are omnipotent.

The slogan “press on” has solved and always will solve the problems of the human race.”

Calvin Coolidge

“Three simple rules in life and habits…Go, Ask, and Do:

  1. If you do not go after what you want, you’ll never have it.

  2. If you do not ask, the answer will always be no.

  3. If you do not step forward, you will always be in the same place.”

Austin Miller, VP of Talent Management at Sorenson Capital Partners

Financial Literacy Education

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Financial literacy, quite simply, is a prerequisite for financial freedom. Financial Times

Fixing economic, income and wealth inequality across the nation and globe remains a Herculean task. But, by emphasizing basic financial literacy education — to boost budgeting skills, debt knowhow and investment knowledge— need not be. And basic financial understanding can make a vast difference — not just to economically disadvantage communities, but to anyone in virtually any circumstance.

The correlation between high levels of economic and financial inequality and low levels of financial literacy and understanding is one of the starkest. The problems are worsened by low levels of knowledge about how debt interest is calculated, how it compounds and how to mitigate risk or budget effectively.

From the 2014 S&P Global FinLit Survey, only a third of the world’s population were deemed financially literate, according to analysis by the World Bank.

Financial literacy education, done right, can be a source of emancipation for the economically disadvantaged seeking a way out of deprivation.

Targeted at the young, in particular, it can lay down vital foundations for future prosperity and teaching them about risk and investment opportunity. One of the big reasons to target young people is that later in life they become much harder to reach.

Too many children think money grows on trees. They don’t realise that they have to budget all this money as they get older, they’ve got to pay these bills. FinLit should be one of the things that’s taught to prepare the young for the real world.

“Narrowing the financial literacy gap is crucial for narrowing the wealth gap. But financial literacy clearly needs a boost across the social strata too”, says Aimée Allam, executive director of FT FLIC.

The best investment you can make is in yourself and in your financial education. It’s the obvious starting point to building wealth and achieving financial freedom. And, here are seven reasons:

  • Provides dividends for life that nobody can ever take from you.
  • Increases your earning potential.
  • Increases your return on investment.
  • Improves the quality of your life and finances.
  • Secures your retirement.
  • Defends your portfolio from unnecessary losses.
  • Provides peace of mind around money.

To ensure you become financially free, take the income you think you’ll need in retirement and multiply it by 20. That’s what you need to put away in order to live off the interest without touching your principle.

Determine how much risk tolerance you have as you look to compound the money you’ve set aside for retirement. the billionaire’s secret, whereby they get Risk/Growth-like returns with assets that would fall in the Security asset class. The wealthy risk very little and expect substantial returns.

References:

  1. https://www.ft.com/content/80480742-9853-4144-9c91-238021414bc8
  2. https://financialmentor.com/financial-advice/financial-education-best-investment/13173

Believe in Yourself and Know What You Want

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“If you don’t know what you want, it’s difficult—often impossible—to create or to get what you want in life.” Paul J. Meyers

People generally think they know what they want, but in practice, they do not. Generally, they don’t know what they really want in life or want to do. Additionally, they don’t know where to start, don’t have a plan, and don’t where to look for help to change that.

American author Mark Twain said he could teach anyone how to get what they want; he just couldn’t find anyone who truly knew what they wanted. Being unclear on what you want is one of the biggest stumbling blocks to getting what you want and success. Paul Meyer, founder of Success Motivation Institute, says if you’re not achieving the success you desire, it’s simply because your objectives are not clearly defined. Your goals need to be written, specific and measurable.

Hundred of thousands of people live there lives without purpose or goals. If you don’t want to spend your life wandering aimlessly, you should dedicate your waking hours determining exactly what you want in life and making plans to achieve those goals.

“Crystallize your goals. Make a plan for achieving them and set yourself a deadline. Then, with supreme confidence, determination and disregard for obstacles and other people’s criticisms, carry out your plan.” Paul J. Meyer

Knowing what you want.

If you don’t know what you really want in life, you’re not alone. While most people may think they know what they want, they’re often wrong.

Positive mindset, attitude and focus are vitally important attributes. The attributes are required to reach your goals and to realize your dreams. Thus, you should have a real understanding that you are responsible and capable of creating your reality regardless of the various obstacles you might encounter along the way. According to Inc. Magazine, here are six steps to help you achieve what you want:

1. Make a decision to have what you want, even if you don’t know how to get it. Most people are tentative when it comes to being specific. Instead, be confident in declaring what you want and be comfortable with the fact that you don’t yet have a plan, but you do know what you want.

2. Be clear about the details of the outcome. You should focus on what you do want, not what you don’t want. Practice visualizing yourself in the situation you want to create. You must be clear about what you want, like financial freedom, finding the perfect partner or a happy life. You must imagine the look, feel and sound of the perfect situation for you in your life.

3. Detach from the process. Not knowing “how” to do something holds many people back. The “how to do it,” instructions will appear after you have clearly defined what you want.

4. Believe in yourself and expect that it will happen. You need to believe in yourself and in the creative process. Winners expect to win. A shortage of belief causes many people to give up or never begin in the first place. Believe and set an expectation that what you want will, in fact, appear. It may not appear in the way you thought or at the precise time. You may even experience frustration, anxiety or impatience trying to control the outcome.

“When you believe in yourself, others tend to believe in you.” Paul J. Meyers

5. Be open to possibility when things don’t go your way. The path to the outcome may show up in ways you never imagined before. Suspend judgment of how things should be done and consider that the very thing you think is a deterrent may be the very thing you need to get what you want. Many times, people, circumstances and resources will show up, but you’ll miss the connection. This is where not knowing how, while keeping your eye on the goal, is important.

6. Practice gratitude. Be thankful for the things you have in your life right now. Look at your challenges as opportunities to grow. When you practice being thankful for specific events in your life, even when you don’t understand why they appear in your life, your ability to manifest accelerates almost to the speed of thought.

Getting what you want is not always simple and easy. Challenges, emotions, other people’s negative views and comments can set you back. But in the end, it all comes back down to your choice, commitment, effort and most of all…attitude. It’s essential to choose what you want, believe in your abilities, trust the process, have faith that it will happen and embrace the right attitude.

That is why “attitude is everything”.

“Attitude is everything,” according to Meyers. “It doesn’t matter where you are or what you’re doing, it all has to do with attitude. And then I have an I will-not-be denied attitude. And that’s an incredible thing to have. I don’t look to my weakness; I look to my strength. I don’t look to my problems; I look to my power. It’s all about attitude.”

“When winners choose a goal, their commitment to achieving it is firm and steadfast,” says Meyers. “When winners are confronted with hurdles or run into stumbling blocks, they go over them or turn them into stepping stones. Winners pursue their goals persistently until they succeed.”

Every day, you should strive for increased clarity around your goals and knowing what you really want. Having clarity about what you want keeps you moving toward it.

References:

  1. https://ninaamir.com/the-importance-of-knowing-what-you-want/
  2. https://www.lifehack.org/articles/communication/7-ways-find-out-what-you-really-want-life.html
  3. http://successnet.org/cms/goals/top-ten-reasons-people-dont-achieve-their-goals
  4. https://www.psychologytoday.com/us/blog/the-second-noble-truth/201711/you-dont-know-what-you-want
  5. https://www.inc.com/stephanie-frank/6-steps-to-get-anything-you-want-even-if-you-dont-know-how.html
  6. https://www.success.com/paul-j-meyer-what-it-takes-to-be-a-winner/

Life on the Edge

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“As you get older, the days go by quicker and you need to make the time count.” Mary Peachin, Octogenarian

As you age, it becomes more important to “live each day right to the limit”, states octogenarian Mary Peachin, in Costco Connection magazine, September 2021, Members Connection. Peachin has “walk the talk” and lived her life as a self proclaim world-traveling, deep sea diving adrenaline junkie. “If your body aches, you ignore it and keep on trucking”, she preaches.

When it comes to going after what you love in life, do not take no for an answer. You should expect and intend to live a life well lived and always believe the best is yet to come

“Life is too short not to enjoy it.”

Make your life happen and take action today. Be amongst the few who dared to live their dreams. Live your life in such a way that there is no regret.

Time is short; live every day for a higher purpose. Let’s invest the limited time we have on your life’s purpose and mission. Do not focus on your problems and challenges; instead focus on purpose and destination.

Life is brief and it passes quickly. The average American male lives to be 70 years 4 months. The average American female lives 70 years 4 months. To live life to its fullest, it is not the quantity of your life, but the quality.

Time is running out for all of us.

“Your job will not take care of you when your elderly and sick, your friends and family will.”

  1. Select a few friends to be close to in your life and communicate and strengthen your relationship with them
  2. Get over those who disappoint you and refuse to let those people steal your joy
  3. Lift up and encourage those who are recovering from failure. Treat people with Grace.
  4. Ignore your critics. Decide to see the good in the experience and growth, the lessons you learned and the relationships you made.
  5. Stay fully focused on your Lord and Savior Jesus Christ. Believe the best! Christ teaches us to believe the best…faith, hope and love. Remember to rejoice and be glad. If God is for us, who can be against us!

The most effective way to live life on the edge is to “find an edge and Live there”, states Peachin. And, you can start to “find an edge” by writing down your dreams and priorities in life, and then focusing on fulfilling those written dreams and priorities. It starts with knowing what you want, and it ends with getting what you wanted. It’s often that simple.

Save for and invest in the things that matter most!

In every positive or negative situation, there are always options. Remember you are the one pulling the strings, and when things look hopeless, it’s because you’re choosing not look at the things that truly matter. You’re choosing to see the the bad stuff, and they have little to do with your ability to change your circumstances. The trick is that you have to see the ocean of opportunity, not that little bucket of water (problems) that you tripped over.

We must decide to see the good and not dwell on the failure, but instead focus on the positives from the experience. Limits do not exist. You have weaknesses of course and we all do, but focus on your strengths. Remember if you’re feeling scared and fearful, it means you’re trying something new.

People don’t run marathons because it feels good.

When you feel bad about your situation, you’re thinking about the mistakes of yesterday, and not the opportunity of right now and the hope for tomorrow. You’re thinking about what has and what can go wrong, and not what can go right.

When you’re feeling defeated and discouraged, ascertain what you’re really focusing on. It important to focus on how far you’ve come, the opportunities that lie ahead, and the resources available you have to go forward.

“What you focus on expands, and when you focus on the goodness in your life, you create more of it.” Oprah Winfrey

Always think bigger and focus on your purpose. Build the world as you want it to be.

References:

  1. Costco Connection, September 2021, Vol. 36, No. 9, pg. 119
  2. https://personalexcellence.co/blog/101-ways-to-live-your-life-to-the-fullest/

“Those who are the happiest are not necessarily those for whom life has been easiest. Emotional stability results from an attitude. It is refusing to yield to depression and fear, even when black clouds float overhead. It is improving that which can be improved and accepting that which is inevitable.” ― James C. Dobson, Life on the Edge: The Next Generation’s Guide to a Meaningful Future

Planning for Financial Freedom

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Planning for financial freedom is the key to getting there. 

Your financial plan has to consider both the future and the present. For the present, you need enough cash available to cover your current expenses. Your long-term financial plan should prepare you for retirement, your kids’ college education or a big dream purchase. Putting money every month toward your current budget and your long-term goals is the goals.

For most investors, the biggest challenge has been staying the course and focusing on long-term goals in the face of market fluctuations. And, it’s important for investors to avoid getting discouraged since saving and investing are a long-term journey.

Working toward your goals:

  • Create a plan. Figure out how much you’ll need and set a target date to have that amount saved up, so you can create a savings plan with a specific monthly goal.
  • Automate your savings and investing. Include your monthly savings and investing goals in your budget to hold yourself accountable today for the future you want tomorrow.
  • Manage or eliminate your debt. Keeping your debt-to-income ratio low can help you get a better interest rate on both the home you have today and the home of your dreams. Furthermore, eliminating your debt gives you increased flexibility with your income to Dave and invest.

Another key to that financial freedom is building an emergency fund that can more than cover your expenses for 3–6 months if you needed it for life’s unexpected surprises like unforeseen major car repairs and medical bills that can derail your personal finances if you haven’t built up a buffer to cover them. 

Essentially, you should:

  • Build an emergency fund. Create and track your emergency fund in a separate account that you can access easily in case you need it.
  • Make a budget. Create a budget that includes a monthly savings goal, and track your savings contributions to build that emergency fund quickly.
  • Track your expenses. Watch your spending to make sure you’re staying within your budget, and check in on that budget regularly to find new places to save.
  • Track your debt. Create a comprehensive list of all your loans and credit card accounts so you can see everything together. Free yourself from debt by paying your minimums and attacking one debt at a time with extra monthly payments.
  • Include all your loan information. Keep track of the interest rate and monthly payment for each loan to help you create a solid debt-reduction plan.
  • Plan and schedule your extra payments. Pay extra on the loan with the highest interest rate until that one is paid off, then roll those payments into the next loan to pay that off even faster. 

A financial free retirement is one in which you can do the things you enjoy in life without worrying about money. For long-term goals like retirement, it is imperative to stay on track with your saving and investing no matter what comes your way.

Planning for a financially free retirement includes:

  • Track your net worth and cash flow. Tracking your net worth and cash flow can help you stay focused on your long-term objectives, reducing stress by giving you the information you need along with concrete goals to strive for. “Net worth is what’s yours, really yours. First, add up the value of everything you own, then subtract the total amount of any debts that you have. What’s left is your net worth”, explains Investment adviser Robert LeFevre Jr., a certified public accountant and certified financial planner
  • Consider your options. As you face decisions along the way, experiment with various scenarios to see how those decisions could affect your retirement.
  • Make managing and tracking your finances a habit. By reviewing regularly your long-term financial plan, you’ll have the information you need to keep on track with your financial goals—no guessing needed.

Financial freedom means that you get to make life decisions without being overly stressed about the financial impact because you are prepared. You control your finances instead of being controlled by them.

References:

  1. https://www.quicken.com/blog/claim-financial-freedom

Planning and Achieving Financial Freedom

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Financial freedom can be an elusive—and hard-to-define—goal.

Financial freedom is often said to be in the eye of the beholder. To some it may mean freedom of debt and being able to fund your lifestyle with your cash flow; to others it may mean early retirement on a Caribbean island. Whatever your financial goals or definition of financial freedom, there are ways and things you can learn to help you get your financial house in order.

Once you’ve decided that financial freedom is one of your top goals, you can start taking steps to achieve it. Thus, the first step toward achieving financial freedom is to define exactly what it means for you. You can’t generally achieve something that you haven’t defined. So, once you’ve defined what financial freedom means to you, you can start taking steps toward your goals.

“What then is freedom? The power to live as one wishes.” Marcus Tullius Cicero

Just because you have money does not mean you have financial freedom. There have been numerous people, especially professional athletes and entertainers, who have earned millions of dollars and subsequently lost it all through reckless spending and debilitating debt. Thus, even if you have a lot of money, if you don’t know how to manage and make your money work for you, it will more than likely disappear.

Financial freedom typically means having enough savings, financial assets, and cash on hand to afford the kind of life you desire for yourself and your families. It means growing savings and investments to a level that enables you to retire or pursue the career you want without being driven to earn a wage or salary each year. Financial freedom means your money and assets are working hard for you rather than the other way around…you’re working hard for your money.

In other words, financial freedom is about much more than just having money. It’s the freedom to be who you really are and do what you really want in life. It’s about following your passion, making choices that aren’t influenced by your bank account, net worth or cash flow, and living life on your terms.

Track your expenses

It’s difficult to know how to save money if you don’t have a good idea of where your money is going. Carefully track your spending habits for a typical month. Doing this will help you to become more conscious of your discretionary expenditures. It will also reinforce what expenses are essential and remind you to plan for unexpected expenditures, like medical emergencies and car repairs. Therefore, it is vital to understand and to know where your money is going.

Make a budget

Once you’ve taken inventory of your expenses, next step is to create a budget. While budgeting can sound like a cumbersome task, you may want to start by using a budgeting calculator to get a feel for how you are currently spending your money and how you’d like to change your spending.

One popular budgeting method is the 50/30/20 rule. The 50/30/20 rule is a way to divide your post-tax income based on your needs, wants and savings. The rule states that people should spend 50% of their income on their needs. This includes health insurance, housing, transportation, and groceries. Then, the guideline states that people should spend 30% of their income on wants or non-necessities such as entertainment, travel, and more. Finally, the last 20% of a person’s income should be saved or invested. This might include retirement savings and building a stock portfolio.

Once you have created a budget, don’t put it in a drawer and forget about it. Instead, make it a working and living document that you check and refer to often. Spend a half-hour per month reviewing how your actual expenses match your budget and make adjustments as necessary.

Automate your savings

Automating your savings and investing is one of the easiest steps you can take to ensure that you are on the path to financial freedom. You can set automated contributions to your employer-sponsored investments, including your 401(k) contributions and employee stock options.

When your savings and investing are automated, your money will continue to grow without you having to think about it. This will help you to reach your financial goals easily and quickly.

Have some percentage (10% to 20%) of your paycheck automatically deposited into a separate account—whether it’s a savings account, a 401(k) or an IRA. Money that isn’t easily accessible is not easily spent.

Unfortunately, many Americans are not saving enough to maintain their current standard of living during their retirement years. It was found that about 21% of Americans have nothing saved for retirement, according to the Northwestern Mutual’s 2018 Planning & Progress Study.

Start investing early

Follow the adage, the best time to start investing was twenty years ago; the second best time is today. You should start investing in a tax deferred account, preferably with your employer matching a portion or all of your contribution.

Planning for retirement is a marathon and not a sprint. Even if you are starting small, the most important thing is to get started. Therefore, it will likely take decades to reach your goal. Therefore, it is important to remember why you want to achieve financial freedom. Keeping your purpose, goals and the bigger picture in mind will help you navigate the day-to-day financial decisions.

Once you become financially free, you have more choices of how to live your life and spend your days.

When you decide that you want to start working toward financial freedom, it is important to remember that you will not become financially free overnight. However, according to certified financial planner David Rae, in a 2018 article in Forbes magazine, there are eight hierarchies of financial freedom that you can work towards:

  1. Level 1: Not Living Paycheck to Paycheck – The first level of financial freedom is building up an emergency fund and paying off any credit card debt. Unfortunately, living paycheck to paycheck is the reality of millions of Americans. According to the Federal Reserve’s Report on the Economic Well-Being of U.S. Households in 2017, some 40% of households could not cover a $400 unexpected expense.
  2. Level 2: Enough Money to take a sabbatical from your work – Accumulating enough money to be able to take a break away from work can be rewarding. This does not mean you have to quit your job, but it sure is a good feeling to know you can.
  3. Level 3: Enough to be Financially Happy and still Save – it’s about enjoying your life and having the money to do it. There can be peace when you are earning enough to save, doing the things you enjoy and still having extra at the end of the month.
  4. Level 4: Freedom of Time – Many people desire more flexibility with their schedules. Freedom of time and financial independence go hand in hand. Together, they are about following your passion, or spending more time with family, and not going completely broke doing it.
  5. Level 5: Enough for a Basic Retirement – Think about what your bare minimum retirement would look like. By knowing your bare minimum retirement, and knowing that you have enough money saved to at least cover some standard of living in your retirement, will also influence other life choices you may make along the way.
  6. Level 6: Enough to Actually Retire Well – Knowing you are on track to accumulate a nest egg to support that lifestyle is a big win. Well done to those who have accumulated enough assets, or passive income streams, to be in a position to retire well.
  7. Level 7: Enough for Dream Retirement – It would feel great knowing that you are on track to have enough money to retire and be able to live your dream life. What is stopping you from getting there.
  8. Level 8: More Money Than You Could Ever Spend – Having more money than you expected to spend is great. Building enough wealth so that you could not possibly spend all of it is another.

Bottomline is that if you want to be financially free, if you want to be able to live the lifestyle of your choosing while responsibly managing your finances, you need to become a different person than you are today and let go of the financial mindset that has created your current financial predicament and has held you back in the past.

Attaining financial freedom, which means having enough savings, investments and cash flow to live as you desire, both now and in your later years, requires a continuous process of growth, learning and emotional strength. In other words, whatever has held you back and provided you comfort in the past or kept you less than who you really are will have to be replaced. You will have to become comfortable for awhile being uncomfortable. And in return, the financially empowered, purposeful, and successful you will emerge — like a butterfly shedding its cocoon.

References:

  1. https://www.richdad.com/what-is-financial-freedom
  2. https://smartasset.com/financial-advisor/financial-freedom
  3. https://www.forbes.com/sites/davidrae/2019/04/09/levels-of-financial-freedom

Financial Planning and Investing

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“Take control of your finances, savings and wealth building with a financial plan.”

Whether you have short-term financial needs — such as planning for an upcoming vacation or holiday spending — or long-term plans like retirement, financial planning can help you organize your finances by evaluating your expenses and income. Yet, a 2020 Northwestern Mutual study found that 71% of U.S. adults admit their financial planning needs improvement.

Futhermore, the Northwestern Mutual research finds a third (32%) of Americans say their financial discipline has improved during the pandemic, and 95% say they expect their newfound habits will stick after the health crisis subsides.

Among the financial behaviors that people say they’ve adopted as a result of the pandemic and expect to maintain going forward are:

  • Reducing living costs/spending (e.g., cancel subscriptions, eat out less, etc.) – 45%
  • Paying down debt – 34%
  • Increasing investing – 33%
  • Regularly revisiting financial plans – 29%
  • Increasing use of tech/digital solutions to manage finances – 28%
  • Increasing retirement contribution/savings – 25%

A financial plan can show if you’re on track to meet your money and savings goals. Financial planning can include strategies for paying off debt, starting an emergency fund, saving up for a large purchase like a house, or building wealth.

Investors who stick to a financial plan have an average total net worth that’s 2.5 times greater than those who don’t follow one, according to Charles Schwab. Financial planning helps you understand where you are today. It also creates a roadmap to get you where you want to be in the future.

Investing is key to building wealth.

Time is on your side and key when it comes to building your wealth. That’s the magic of compound interest. Compound interest is interest earned on interest. Basically, it’s the reason why investments earn more money over time.

But before you start investing, it’s crucial that you’re financially prepared. Consider these four signs you’re ready to invest:

  • Have a long-term financial plan and strategy.
  • Have an emergency fund.
  • Research and prepare to invest.

Investing all depends on tim ane in the market and your unique financial situation. These signs are a good step to getting your finances in order. But consult a financial professional for comprehensive investment advice.

As a result of the personal finance challenges experienced by Americans during the pandemic, the 2020 Northwestern Mutual study found that  there was mounting interest in personal  financial planning that may be here to stay. “Personal finance is a lifelong journey; it’s not something you look into once and say, ‘OK, I checked that box,’ and move on,” explains Matthew Pelkey, OppUs’ director of financial education. “Just the simple act of looking into things you can do to be more deliberate in your financial life will give you that agency over your finances — and create the habits that are really what produce good financial health.”

Financial planning can equip you to handle life’s many unexpected financial twists and turns. Although, it will vary, depending on your stage in life. You don’t need to know everything — but knowing and planning for the essentials will provide a solid foundation. Always remember the adage:  “Failing to plan is planning to fail.”

  • References:
    1. https://news.northwesternmutual.com/planning-and-progress-2020
    2. Strategic Business Insights, MacroMonitor 2018-2019 Report, February 2019.
    3. https://www.opploans.com/oppu/articles/financial-planning/

    Knowing Your Why: Financial Freedom

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    WHY is the purpose, the cause, or the belief that drives every organization and every person’s individual career.

    “Knowing Your Why” is the single most important thing you can do to energize your journey towards being a better you and to achieve a better financial future for you and your family. Why is all about your purpose. Why do you get out of bed in the morning? And why should anyone care?

    Simon Sinek, author of the book Find Your Why: A Practical Guide for Finding Purpose for You and Your Team, writes that it is only when you understand your “why” (or your purpose) that you’ll be more capable of pursuing the things that give you fulfillment. It will serve as your point of reference for all your actions and decisions from this moment on, allowing you to measure your progress and know when you have met your life and financial goals.

    When you’ve identified your life’s purpose, it’s easier to focus on what truly matters. To stay focused on your goals, they must be important to you. Your subconscious can try to trick you into believing that you want one thing, when in reality these things do very little to help you live out your purpose.

    Understanding why you’re doing what you’re doing is the single most important question you can ask with respect to your life and financial well-being. Failure to ask and answer that question can be the single greatest oversight you can make when it comes to saving and investing. Those who do have a strong sense of why they are investing are more successful financially.

    Understanding why you’re doing what you’re doing in the first place is critical. Your why serves as your compass to stay on course or your North Star in the often hectic day-to-day grind that can derail you from reaching your goals. It’s so easy to get caught up in the minutiae of chasing fads, hot stocks or following the investing herd that you forget what you’re trying to really accomplish in the first place.

    Saving and investing with a purpose

    Saving and investing without a purpose will leave you filling empty. Saving and investing should be a means to an end…financial freedom . If money is the end, it will likely create more problems than it solves. Thus, knowing your why for saving and investing is an essential first step.

    But, what is financial freedom? Financial freedom is about much more than just having money, writes Robert Kiyosaki. It’s the freedom to be who you really are and do what you really want in life. It’s about following your passion, making choices that aren’t influenced by your bank account, and living life on your terms.

    Beyond serving to tell you what financial goals you should be pursuing in the first place, knowing why you’re saving for the future, and investing to grow your money and to build wealth serves two important purposes:

    • It motivates you, and
    • It orients you.

    To find your personal “Why” in life, you really have to dig deep down into your conscious mind. You must ask yourself several pertinent questions such as:

    • Why do I work every day?
    • What do I value most?
    • What do I want to do with my life?
    • What is my purpose and goals in life?
    • Why do I want to have a positive influence in my community and on the world?

    “He who has a why can endure any how.”  Frederick Nietzsche

    Sinek and his team provide a simple format to use to draft your WHY Statement:

    “TO ____ SO THAT ____.”

    The first blank represents your contribution — the contribution you make to the lives others through your WHY. And the second blank represents the impact of your contribution.

    “You can only become truly accomplished at something you love. Don’t make money your goal. Instead pursue the things you love doing, and then do them so well that people can’t take their eyes off of you.” Maya Angelou

    The key to harnessing your passion and to live a life of contentment is understanding your “why.” Why are you passionate about saving for the future and investing to grow your money and building wealth? Is it because you desire financial freedom and have a new lease on life?

    What if we awoke every single day knowing your why? For no better reason than to be better than yourself and to achieve financial freedom in order to leave our family and our community in a better condition than we found it?

    References:

    1. https://engineeringmanagementinstitute.org/knowing-your-why/
    2. https://www.deanbokhari.com/find-your-why/
    3. https://www.developgoodhabits.com/your-why/
    4. https://www.richdad.com/what-is-financial-freedom
    5. https://www.entrepreneur.com/article/243737
    6. https://www.jordanharbinger.com/simon-sinek-whats-your-why-and-where-do-you-find-it/