Achieving your financial vision requires diligence and a more concentrated focus every second on prioritized set of valuable financial actions. To be more concentrated, you need to create goals and objectives that make you more focused to achieve financial results within a given period of time or a deadline.
For instance, in using your budget as a tool your financial performance and position would be clearer to you and cause you to have a better knowledge and understanding of the sources of cash outflows. In addition you would also know the potential capital and savings that could be allocated towards certain projects or valuable investments. The budgeting processes should invigorate you to increase your level of concentration and make you more aware of your financial position.
Awareness of your financial position is bound to create at least two reactions:
- A reactive mode to fight poor financial performance and management.
- A proactive approach to allocate capital or savings for positive return projects or high yield investments for the future.
The awareness should invigorate you to brainstorm to list your “reactive mode” list and “proactive mode” list
| Reactive Mode List | Proactive Mode List |
| 1.Impulsive Spending Habits | 1.Book Publication |
| 2.Huge Consumer Debt | 2.Pursuance of Advance Degree |
“Reactive Mode” List are the items or events that need your immediate attention,if ignored, could potentially drag you into messy financial situation for a scenario that is already discouraging.It emanates from long periods of poor planning and lack of vision.
“Proactive Mode”List are items or events that do not need your immediate attention but potentially are the seeds you invest now and could result in returns in the future long term for your economic freedom. They tend to be investments in valuable projects, high yielding exchange traded funds or indexed funds that could generate multiple streams of income.If ignored now,they create aggregated “Reactive Mode” list that becomes difficult to manage and results can be consequential and have an impact on our quality of life.
Bruce Barton puts it this way,” Action and reaction, ebb and flow, trial and error, change-this is the rhythm of living. Out of our over-confidence, fear; out of our fear, clear vision, and fresh hope. And out of hope, progress.
Once you’ve identified your pain points,create your financial goals to take you our of the financial bondage.The goals should lead to specific tasks that should be acted upon within a given period of time with extreme commitment and consistency.For instance;
SCENARIO
- Financial Vision:To be financially and economically independent to comfortably increase investments and assist the unfortunate whenever and wherever and bequeath wealth to my children and grand children.
2.Financial Goal:Net-worth at $4 million dollars at the age of 50 years with no debt.
- Pay all short term debt by 31st Dec. 2013.
- Allocate $30,000 by the end of 2014.
- Invest in high yielding diversified investments for the long term.
- Proactively identity more opportunities for further investments.
The above scenario should set the tone and a blue print for your current financial situation.Whilst there are more complex decisions that would sometimes need support and assistance in certain investments,this basis needs to be established to create leverage.
Great thought, Joe.However, the contest and scope of your assumptions and premises ignored my previous insights and solely concluded partly based on this blog which is an integral part of the previous which sets a basis for further complex discourse.In the end your conclusion presented my dismal and simplistic view of achieving financial goals.This blog only presents a high level approach to the the process of goal setting and its importance as part of an integral framework for progress.It is by no means understating the effort and the downturns one needs to experience to achieve financial success.
Nonetheless,I do completely agree with your points and appreciate the effort for the input.Indeed,our values such as discipline,resilience,courage and even the principles we stand by are very relevant in achieving our financial goals.Not only that but our intellectual capacity,support systems,our motivations,resources and the viability of the environment in which the goals are executed.And of course, there needs to be a system of continuous evaluation and assessment of results for continuous improvement.It even gets more complicated in a corporate or group setting.But that’s not my focus.
The efficiencies we create with the tools we employ such as a budgeting or project management software,and other technologies are but a few of the system requirements utilized in achieving specific goals but are out of scope in this discourse.
Depending on your role, whether a Portfolio manger,CEO,a father,a mother, or a Project Manager,the goal setting process,tools,controls and evaluation mechanisms are different and could be complex.
This blog is meant to reiterate the importance of goal setting and the need to have a concentrated focus in achieving a specific financial goal as a framework for achieving a vision.Our “financial management series” training program presents a more detailed modules on various requirements for achieving financial success.
Great ideas to start off with. You make it look pretty simple and straight forward but I think that one thing that we need to watch out for is the ‘SMART’ness of our goals. We also need to have the right attitude towards the goals and commit ourselves to continually appraising the tasks and achievements to ensure that we are on the right track. I also absolutely agree that we need to get expert help whenever necessary. Keep it up Kofi!