Setting Short-Term And Mid-Term Goals
Just as important it is to have a long-term vision, it is important to have short-term and mid-term goals. Personally, I consider short-term goals to have a time span of one year, meaning I will set a goal at the beginning of the year, for what I want to have achieved by the end of the year. Similarly, mid-term goals have a somewhat longer time span, perhaps 3 or 5 years.
For goal setting, whatever goal it may be, it is important to use the SMART principle.
Specify
A goal, or target, should be specific. If you want to lose weight, it will not suffice to just state “I want to lose weight”, because it does not specify how to achieve it. In stead, you may want to specify that you want to lose weight by going to the gym twice a week for two hours. In terms of money, it needs to specified how specific goals can be met. Simply stating that you want to increase your net worth by another 40,000 Euros by the end of the year is bound to fail, unless you are able to specify in more detail what you intend to do, or change, in order to get that result.
Measurability
Each target needs to be measurable. Just saying that I want to become wealthy will not work, because how do I measure wealth? Is it 100,000 Dollars? 1 million Dollars? 1 billion? Or is it an increase of 200% of my net worth? Additionally, applying a measurable unit would allow you to track your progress, and to make slight changes when necessary.
Attractiveness
Goals need to be attractive. Not only does there need to be a gain, but the process needs to be fun too. If you choose to lose weight by going jogging four times a week, although you hate jogging, perhaps you will need to think over another alternative activity so you can reach your goal.
Keep it Realistic
Goals need to be realistic and within the boundaries of your possibilities. For example, if you have a lot of debt, and you would be committed to owning 75 million Dollars worth of real estate by the end of the year, it is unlikely to happen. Start to focus on something that is within your possibilities, for example reducing your by 50% in the next three years, and becoming debt free within 5 years. Whichever your personal situation might be, goals need to be realistic.
Time
Goals should have a time limit. Similar to measuring your goal in units, it should be measured in time as well. Therefore, set a time limit until when you want to have your goal achieved.
