2020 Happy New Year – How to achieve what is important to you

We wish you all a very happy and fulfilling New Year.

What do you want to achieve in the 2020s?

It is the time of year when we reflect on what we have done and what we want to achieve in the new year and the new decade ahead. It’s a great time to review, to reinvent and to make changes to your life.

When it comes to your goals there is almost always a financial element to each target. But people’s goals are rarely just financial, money is always a means to an end. This is where your goals become meaningful.

At Extended Investments Limited, we spend a lot of time with our clients throughout the year determining what is important for them, articulating their goals, constructing and implementing plans to achieve them, and then managing them to ensure they stay on track.

Below, we share some points that we believe are important to building a financially strong new decade that can help you achieve your life goals.

1. Know what you want and why

This sounds obvious but can actually be a revealing process to think about what is really important to you. Take the time to think about how you would like your life to look in 1 year, in 5 years and in 10 years. Challenge yourself and ask yourself why you want that. Knowing what you really want is the starting point; knowing why gives it meaning. You should always start with the end goal in mind.

2. Make them smart

The second stage in the process is to put structure around your goals. You may have heard of this acronym to make them smart. What are SMART goals?

Specific– be detailed in your goal as an extension of point one. That means not just saying I want to retire well, but be detailed: I want to retire at age 62 with an equivalent salary of 80% of my current after tax income, for example.

Measurable– it should be measurable or quantifiable so you can track your progress and know when you have achieved your target, as per the example above.

Achievable– This is the stage where we help our clients manage the gap between where you are and what you want to achieve.

Realistic– There is no point having a goal of achieving €100 million in 5 years if you don’t have the capacity to save that amount. Goals need to be realistic otherwise you will lose motivation knowing they cannot be reached.

Time bound– finally, your goals should be time bound. You need to know when you would like to realise your objectives. It also links to the above two points of being achievable and realistic, because what may not be so in 1 year may well be in 20 years.

3. Build a cash reserve

Getting practical now, we ask all our clients to build and hold a cash reserve. We typically suggest clients build a reserve of 3 to 6 months’ cost of living for unexpected expenses. You can hold this in cash and ideally in a separate account so it doesn’t get eroded by day to day living. It may not be as exciting as investing €200,000 towards your long term plans but it can be just as important.

4. Get professional advice

This is a most important step: get professional advice to ensure that the steps you take will help you to achieve your goals effectively. Make sure that the source of your advice is qualified, experienced, has expertise in your specific situation and for financial and investment advice, hold a full independent license from a top tier European regulator. This can have a significant impact on your long term goals.

5. Reassess

Once you have taken the above steps: defined your goals, made them measurable, sought out independent professional advice and put actions in place to achieve them, it is equally important to track and measure them. The first question to ask on review is whether this goal is still relevant: is it still important to you or has something changed in your life to alter the target?

Secondly, are you on track? What do you need to do to make sure you will hit the milestones along the way and arrive at the end destination?

Revisit your goals regularly. We recommend a formal review at least once or twice a year for long term goals. Furthermore, we are tracking the instruments to help our clients achieve their goals on a daily basis.

As you take the time to reflect on entering a new decade and your thoughts turn to what you want to achieve in the years ahead, think about these in the context of the above 5 points. Take charge, know your goals and contact us to let us help you achieve your 2020s goals.

Image by Hagar Lotte Geyer from Pixabay