Annual Goal Setting

The importance of annual goals and how they direct your actions

As a relatively disorganized person, the thought of setting goals for the year and then actually following through seemed laughable to me. It seemed like a clever way to rewrap the concept of a New Year’s Resolution. I'd now argue that there are important distinctions between a resolution and a goal. What I found was that by thoughtfully selecting my annual investment goals, I was able to make consistent progress and be intentional about my actions.

What are resolutions?

Goals and resolutions may have the same intent of picturing where you want to be in some timeframe, but the thought process is entirely different. In my experience, resolutions tend to be broad statements about your desired future without much consideration for the path. They are a daydream, crystalized into a single feel-good statement, swiftly abandoned following the lackadaisical holidays.

What are goals?

Goals on the other hand are specific and actionable. They are intentional and measurable, constantly assessed and kept in the front of your mind. Intentional goals represent not just the end destination, but also consider why they’re important and how you can make them happen.

Imagine you were told to run an unknown distance on a treadmill with no display. Without any idea on how far you’ve run or how fast you’re going, how long can you stay motivated and focused on the task at hand? Goals provide direction while milestones provide actionable steps. They serve as mile markers to judge past and present growth and progress. They are personal affirmation that you are on track and making progress.

At the end of the day, you may end up deciding that there really is no distinction between resolutions and goals. That’s okay. What really matters at the end of the day is properly framing your mindset and planning actionable and measurable steps that logically lead you to your desired destination.

Setting your goals

When setting your investment goals, think about how a 1 year goal might play into your 5 and 10 year plans (I wrote about how to identify larger overarching investment goals in this post). Given that context, does the goal align with your long term plans? On top of that, your goal needs to be specific. Clearly and objectively define what success looks like so you don't move the goalposts when the outcome doesn't go your way.

When defining your milestones, go as granular as you'd like. We all have different preferences for how we work best. For myself, I prefer creating larger milestones that can be assessed and completed every few weeks. I find that too many small tasks causes me to get lost in the laundry list of items. On the other hand, Kat enjoys checking off and completing todo list items every day. For her, it makes sense to break down goals into bite-sized daily or weekly milestones. Consider how you work and create milestones that push you to perform at your best.

Lastly, be intentional about your goals and pursue personal growth. I challenge you to challenge yourself. Set up stretch goals and think through what is missing that prevents you from taking that extra step. For example, I've found it's easy to claim capital is a limiting factor, but the reality is most successful real estate investors utilize creative methods to fund larger and larger projects. With that in mind, you might have a stretch goal to make a foray into OPM (other people's money).

How to use your goals

Be consistent. Now that you've set your goals, you need to use them. Life is busy and priorities are constantly changing. Unless you consciously make mental room for your goals and milestones, they can easily fall to the wayside. It is crucial to be consistent about your effort week to week. By intentionally thinking and working around your goals, you are also building a lasting habit and mindset.

Review your goals and progress regularly. Kat has her goals and current milestones tracked at the top of her "12 week year" spreadsheet (book link; she believes it helps her maximize productivity). I write my goals on our whiteboard so I see them every day. In both cases, we keep our goals in plain view at the front of our minds so that we’re always thinking about what needs to be done. If we start to stray, we can correct course and realign before we invest too much time and energy on something entirely unrelated. If we feel we are starting to fall behind, we take some time to think about why. Are there unforseen obstacles that we are actively working through or have we mentally deprioritized the goal? Be conscious about your direction and recognize when adjustements need to be made.

Suggested goals

While many of the goals we set may be different from person to person, I advocate for these common goals:

1. Constant education. Read 5 books a year or listen to an investment podcast weekly - anything to further your knowledge. You don’t know what you don’t know.
2. Network and meet like-minded people. We are all on the same general investment path. Provide value to those before you and connect with those ahead of you. This also plays into constant education.
3. Find an accountability partner if you haven't already. Someone with similar investment goals and mindset can help tremendously in motivating and propelling you forward.