Why do you want more money?

In my last post I discussed about keeping goals simple.  A major part of this is how important it is to apply a metric to any goals that you set so that there is room for measurement as you progress.

This got me thinking about a goal that is very easy to apply a metric to that I would say 99.9% of people in the self-improvement field possess.  Of  course, I’m talking about –

Money

Money goals come in many forms:

• To get a job that earns ‘X’.
• Be a millionaire.
• Make ‘X’ amount a month in passive income.
• I want to be rich.
• I want to be debt free.
• Increase my business profit.

Some of these read better than others, applying a metric is better than a vague aspirational statement saying –  “I want to be a millionaire” is worthless, as it is nothing but a dream without any clear plans in place or a clear why you want to achieve that goal.

I think its important to have a ‘why’ on your money goal, even if on the surface of things it seems shallow.  If you want to be a millionaire – why did you settle on a million?  What is the motivation behind this amount?  Is it just a nice round figure that sounds good?  If that is the case why don’t you just say you want to be a billionaire?

I read a blog post of someones long-term goal to own a $14 million home and $4 millon boat.  At first I laughed because the amount seemed very specific and I imagined the guy beating himself up because he was driving around in a $3.95 million boat, but then I thought at least there has been some sort of thought behind this.

If an individual takes the approach to understand how much they need, then, if serious a plan can be established how they intend to achieve this amount.  No matter how high the ambition is it suddenly seems a lot more real when you can see written on a page how much more money you need to make a day/week/month/year.

So let me reframe your money goal for you:

“Why do you want to make more money?”

Think about it… What is financial freedom to you?

Retiring early?  Not having to worry about the mortgage?  Traveling several times a year? Giving your children the best start in life?  Making excessive consumptions?

Now the next question – do you have any clue how much that will cost you exactly right down to the nearest penny (or whatever your currency is)?

If the answer is ‘No’ then that is a major failing of your goal.  Before even continuing with the goal, do the following:

1. Open a spreadsheet (or get a pen, pad, and calculator).
2. Research what you want and how much that actually costs.
3. Work out how much money you actually have and what your outgoings are.
4. Estimate how long it is when you want to achieve your money goal (consider other costs such as inflation and interest).
5. Now work out how much money you need per month to achieve this – is it feasible?  Can you extend the timescale?  If not what plans do you have in place to achieve this?
6. Once this is done now you can plan how you are going to achieve it.

Congratulations, you have now taken further steps to make your money goal more realistic – now you just need to set up plans to meet the shortfall.

It’s important to get the money goal right as otherwise you will be stuck in the pursuit of wealth without understanding why it’s needed.