The Missing Ingredient to Financial Success

This article is part of our 12 Keys to Lasting Wealth Series – (Key 2: Know Where You’re Going).

“If you don’t know where you are going, you will probably end up somewhere else.”
-Lawrence J. Peter

When I was younger I dismissed the importance of goals. Goal setting seemed like a great academic exercise, one you did on pen and paper but which didn’t matter much in the “real” world.

Older now, I’ve seen the light. Goals are not only important, they’re easily the most powerful driving force for success.

Goals create the focus and vision needed to get the most out of life. They’re the difference between wandering lost, aimlessly in the wilderness, or driving straight toward your dreams with the red hot intensity of a heat seeking missile.

Let me break it down.

Have you ever walked somewhere looking straight down at your feet as you take step after step. Probably not because you’d quickly stray off course. Try it sometime in the safety of a playground or your own back yard. You’ll be amazed at how quickly you’ll veer off course.

To walk straight you need a reference point. You need a fixed point in the distance. That’s why we walk with our heads up.

And that’s exactly what goals provide. They provide a fixed point on the horizon that keeps us from wandering off course. Working without goals is like walking with your head down. You’ll never end up where you want to be.

Solid, definable goals are the key to financial freedom. There’s no way around it.

Perhaps that’s why best-selling author Dr. Thomas Stanley, in his book The Millionaire Next Door, discusses the importance of goals in achieving financial success.

According to his extensive survey of American millionaires, the vast majority of millionaires set financial goals, helping to explain why these people became millionaires in the first place!

“How am I going to live today in order to create the tomorrow I’m committed to?”
– Anthony Robbins

By providing long term benchmarks, goals help shape our daily decisions in a way that encourages positive financial outcomes. And like a map, goals keep us from going down financial dead end streets.

When we see, for example, that spending $159 on a pair of designer shoes will take us further from our goal of a down payment for a home, we tend to put the shoes back on the shelf.

So how do we set the right goals? How do we create goals that lead to financial independence?

We do it the S.M.A.R.T. way of course.