Have you set any Goals for the New Financial Year?
Have you ever set any goals? How do you know if you have achieved anything if there is no goal? Naturally, goals are personal because Goals reflect what you hold close and what you want but setting goals is only effective if you work towards achieving them.
For most people this requires a plan. A plan lets you know what you have to do to achieve your goals but you have to be able to measure your progress to know how you are going.
Setting Goal Plans
The first one is where you set the goal, work out what you have to do and monitor your progress. While this sounds ok it has one major weakness. Nobody holds you accountable so it’s easy to opt out when the going gets tough.
The other type of plan is where you enlist the help of a specialist to guide you and keep you accountable along the way. All plans work better if you are held accountable and it’s amazing how much you can achieve if you have to justify your actions to somebody else.
Ideally, that person should be a Financial Planner. They are experts at working with people to improve their financial situation and believe it or not, everybody benefits from receiving financial planning education.
In fact, financial planning and investment go hand in hand.
For a novice investor, financial planning is about setting clear goals, budgeting and focussing on raising equity to assist with asset accumulation. The budgeting piece sets an investor on the path to having the financial discipline to save money regularly which encourages further investment in a variety of asset classes. Eventually, these assets can be converted to a property portfolio.
The benefits of investing in property grow with the size of the portfolio obviously. The basic budgeting skills you learn serve you well when its time to buy a property because allocating income to meet expenses and creating a reserve is very important.
In fact, contrary to popular opinion, interest rates are not critical to holding onto a property long term if you have skill in budgeting and regularly apportion money to a buffer. As you can imagine, having sufficient funds in reserve allows you to weather the storm, so to speak.
A seasoned investor can also benefit from using a Financial Planner. Understanding and implementing insurance needs along with making the maximum use of Superannuation is critical to protecting the assets already purchased. Even the simple process of working out how much you need to retire can put clarity into what actions you take.
Of course, if you wanted to, you could set really low goals so it’s easy to reach but the down side is that you may not accomplish much for your family. Besides, most things worth achieving are big enough to stretch you out of your comfort zone.
Take some time to think about what you want from this Financial Year. A lot of people make New Year’s resolutions so perhaps you could think of these as your New Financial Years resolutions.