Practical Goal-Setting Strategies For Investors

This article was first shared with members of my Quality Value Investing subscription service in Seeking Alpha’s Investor Groups on March 15, 2023, and with real-time followers in my SA Blog on March 17, 2023. As a public post, please feel free to share it within your network.

As we get closer to the end of Q1 2023 in what is typically a time of year when many think of personal and professional goals and objectives, I ventured that a piece on goal-setting strategies was in order.

Although this post isn’t linked directly to specific investment strategies, its mission is for readers to apply its concepts to their money management objectives.

A Categorized Approach to Goal-Setting

Several years ago, I had the privilege of attending an outstanding self-improvement seminar in New York titled the Master’s Course. My favorite takeaway from the workshop was a goal-setting exercise based on a holistic approach to achieving excellence.

The template uses ten domains—or categorized essential areas of life—at both the personal and professional levels. It changed my life or at least my approach to mapping it.

1. Spirituality

2. Family

3. Health

4. Education

5. Career

6. Money

7. Social

8. Leisure

9. Community

10. Projects.

To this day, it drives my goal-setting, both short and long-term, supporting my effort in producing many personal and professional outcomes for which I am proud as much as humbled. I have yet to find a more straightforward, productive course of action toward making the most of what is important to me; and caring for those who are dear to me.

One of my primary goals is to make a living by making a difference in the lives of others. Thus, the motivation for publishing Quality Value Investing (QVI) and sharing this timeless treasure of a structured approach to goal setting in pursuing excellence in one’s life.

As an investment newsletter, QVI chooses the Money domain to present three highly effective categories for strategizing an effective goal-setting plan.

Nevertheless, any goal-setting strategy should be fun, creative, and attainable. Pursuing stretch goals, or hard-to-reach dreams, are essential for ensuring we are not taking ourselves off the hook; however, reaching our intended outcomes is paramount. That is why I recommend setting goals that we are confident in achieving. Pursue perceived achievable goals; complemented by expansive and, thereby, more challenging ambitions.

QVI’s mission in sharing this simple yet powerful goal-setting template is to support a universal quest to achieve investment objectives relevant to our life journeys.

How to Set Achievable Goals

Whether an aspiration, ambition, dream, target, purpose, or objective—whatever we call a goal—it is perhaps one of life’s most exhilarating and frustrating occurrences. Of course, achieving a plan may be the most rewarding of moments. But, on the contrary, failing to reach a dream is one of life’s more painful experiences.

That is why it is crucial to set believable and attainable goals, thus giving us an increased opportunity for joy; and, at the same time, leveraging against unwanted disappointment.

That said, authentic goals are indeed challenging. But the relative difficulty level in achieving a goal makes it worth setting in the first place. For example, “I hope to wake up tomorrow” is not a goal but a simple reality for most individuals. However, it may be an accomplishment without prior equivalency for someone with a chronic illness or life-threatening injury.

Therefore, readers should determine what is unique to them. What is the game changer? The elusive, although attainable dream? The simple accomplishment? What is the purpose of one’s life?

Goals are one-way private contracts that determine the perceived value of our existence, often providing a measurement of our self-worth. Thus, it is imperative to keep things in perspective and not allow failure to define us or success to spoil us. Instead, goals keep us moving forward in this sometimes crazy thing called life. Nonetheless, never let a failure—or an achievement, for that matter—become more important than life itself. Be humble in defeat as well as in victory.

Practical goal setting requires three general rules of thumb: planning, simplicity, and structure.

Have a Plan and Work the Plan

Regardless of the level of difficulty, or the personal importance of a dream, setting and achieving our goals happen more often if we write them down. For that reason, it forever remains the first rule of goal setting.

Rule #1: Write your goals down.

Written goals have a higher chance of actual achievement. I believe that goal setting is about having and working a plan. As life sometimes goes, the blueprint may not perform as intended, although by having a written plan and working it rigorously, something good may happen when least expected.

Whether choosing a traditional paper notebook; smartphone or tablet notes app; or desktop software, write goals down clearly and concisely. It is a contract with ourselves; hence, treat it as such by signing and dating the plan. Rewrite and edit, as necessary, until comfortable with the language and format. But write it down, read it often, and revise it whenever necessary or practical. Life changes; therefore, so does the written plan that guides it.

Give the Plan a K.I.S.S.

The key to an effective approach to goal setting that is both believable and sustainable is to develop objectives for both short- and long-term ambitions. Therefore, keeping the written plan brief is crucial, which brings us to the second rule of thumb for practical goal setting.

Rule #2: Keep It Super Simple (K.I.S.S.).

As a fervent believer in the K.I.S.S. concept—or the keep it super simple approach to investing and life—I update my goals at the beginning of the year by setting at least one annual objective for this calendar year and at least one goal that stretches beyond the year for each domain. I then occasionally visit the list to monitor progress, making adjustments as warranted by life’s fluid and ever-changing landscape.

And yes, sometimes unexpected vicissitudes are distressing. But tragedy and heartbreak aside, remember these words of wisdom:

The pain of change is long forgotten when the benefits of the change are realized.

Change is inevitable, and the stock market is no exception. Moreover, one can argue that change is the only consistent event we can count on. Thus, a critical component of any goal-setting exercise is the willingness to make necessary adjustments.

Regardless of any shift, and the resulting discomfort, keep it super simple. Our chances of attaining our goals may multiply accordingly.

Write Goals the S.M.A.R.T Way

It may seem a redundant cliché, although using a well-worn acronym in goal setting could be the difference between success and failure in reaching our desired outcomes. And it is therefore included as the third rule of practical goal setting.

Rule #3: Be S.M.A.R.T. when setting goals.

Write and front test goals using George T. Doran’s S.M.A.R.T. approach: specific, measurable, attainable, realistic, and time-bound;* inspired by Peter Drucker’s legendary management by objectives concept.**

Doran suggests that we be specific when writing down our goals; ensure our ambitions are measurable; set only goals we believe are achievable; be honest in our self-assessment by committing to realistic and relevant targets given the resources available to us; and establish time-specific deadlines to reach our objectives. For example:

As an avid learner, I will read at least one book on investing or personal finance each month during the hours I set aside in my calendar. Then, upon completion, I will write a brief narrative in my online diary of how each book enlightened me or changed my way of thinking about money.

The above illustrative goal is specific in its clear objective of reading a minimum of one book each month, measured by recording the results in personal calendars and diaries; attainable by allowing an entire month for reading at least one book amid a busy schedule; realistic in the sense the goal setter knows oneself as a passionate reader; and time bound in that they choose and record specific timelines.

The S.M.A.R.T. approach to goal setting is imperative for achieving practical and workable objectives. Remember to integrate the S.M.A.R.T. concept into each of your written goals.

*George T. Doran, “There’s a S.M.A.R.T. Way to Write Management’s Goals and Objectives,” Management Review, American Management Association Forum, 1981, 35-36.

**Peter F. Drucker, The Practice of Management (New York: Harper & Brothers, 1954.)

The Essential Concept of Be→Have→Do

I hope readers do not skip this section because of its unusual title, as I believe it is perhaps the most critical aspect of practical goal setting. The concept of be→have→do demonstrates why most individuals never achieve many of their goals.

When operating on automatic, humans tend to live based on a premise of do→be→have. In other words, “if I do this, then I will be that, and therefore, I will have this.” A typical example:

If I do save and invest lots of money, then I will be wealthy, and therefore, I will have financial security.

The typical person, on an average day and at the subconscious level, is inclined to set goals based on the lesser effective do→be→have state of being. But, on the other hand, successful goal-setters do not operate their life from the premise of favoring action above all else without first believing in and taking ownership of the objective at hand.

In other words, most individuals don’t function from a place of self-ownership and thus set goals based on what they need to do. As a result, many have trouble achieving the desired outcomes of what they hope to be or want to have.

I submit that successful goal setters function in the rare conscious state of be→have→do. Take a look at how a mere reshuffle of priorities may result in a dream achievement never thought possible:

If I be [am] someone worthy of wealth, I will have a sense of financial security; therefore, I will do what is necessary to earn, save, and invest more money.

By moving toward favorable action, mindful goal-setters have first decided they are worthy of the wealth and the financial security it brings, thus creating a built-in motivation to earn, save, and invest more.

The concept of be→have→do is counterintuitive, although geared to the anticipated result of saving money or whatever the personal or professional goal. Individuals often operate subconsciously, influenced by a well-intended upbringing or external environmental influences. Each focuses on the action of doing before deciding they are worthy of being—and deserving of having—what is deemed essential.

Such a conscientious approach to living, in general, and goal setting, specifically, is unconventional. But that is why it works. If conventional wisdom always prevailed, most individuals would succeed in their life’s pursuits, thus rendering self-improvement newsletters, books, and seminars to extinction.

By embracing the be→have→do concept, we are first using the power of affirmation to be who we want to be; then have what we want to have; and lastly, do what is necessary to achieve our stated goal. In other words, successful action follows those who first decide each deserves what they want to achieve.

Practice the cognitive art of be→have→do by first deciding to be worthy of our stated goals. Next, take ownership of what is essential to us, our loved ones, and our colleagues. Then, accomplish what is necessary—ethically and with care—to bring those goals to fruition.

Sometimes it is said that individuals do not change, although everyone does have the ability to transform. Therefore, embrace the challenge to transform through goal-setting. Begin with the destination in mind, remembering to enjoy the journey, as the ride is often the best part of achieving our goals and dreams.

Exploring the Money Domain of Goal Setting

Did you hear that everyone earns the same amount of money?

It’s called:

Not enough.

Money is a highly personalized domain. However, it is wise to leave emotions out of our money management and set goals with purpose.

Ask for a raise this year? Invest more or more often? Hire a financial advisor? Build an emergency fund? Refinance a mortgage with a lower interest rate? Improve our credit rating? Construct a workable budget? We all know that the possibilities for financial improvement are endless.

Pick and choose what is essential in the near term, such as eliminating a credit card balance or brokerage margin account, then reach further for higher aspirations like paying off an onerous student loan. Treat personal financial management as a business and triumph.

To make more of it, consider doing what is most enjoyable and being the best possible at our chosen occupation or investing strategy. Money might follow our passion.

Pulling It All Together

In writing this article, I aimed to pass on what I was fortunate to learn at the Manhattan self-improvement seminar to as many interested investors as possible. The workable goal-setting template—focused on ten essential areas of life—that I took away from the training on that fateful day remains a powerful personal development tool.

But equipment left in the toolbox will not repair a thing.

Put these strategies to work and benefit from realistic goal-setting toward achieving investment objectives and financial dreams. To pull it all together, here is a review of the elements of practical goal setting to keep us moving onward and upward in the investment pursuits that fund life’s essential milestones, such as buying a home, paying tuition, sponsoring a wedding, underwriting a hobby, starting a business, or enjoying a comfortable retirement.

• Set your goals in a written plan, and then work the plan.

• Give your plan a K.I.S.S. by keeping it super simple.

• Make your goals S.M.A.R.T., i.e., specific, measurable, attainable, realistic, and time-bound.

• First, be who you want to be. Next, have what you want to have. Then, do what is necessary to fulfill your objectives in an ethical and caring manner.

May your achievable investment goals and financial dreams come true. And whenever one does not manifest as expected—borrowing from the Spirituality domain—keep the faith and persevere.

Excerpted from David’s book, the Ten Domains of Effective Goal Setting: Achieve Your Dreams in the Essential Areas of Life.

Copyright 2023 by David J. Waldron. All rights reserved worldwide.