The Role of Goals in Wealth Creation
To build wealth and create a wealth-making machine, you must be careful not to confuse goals with purpose or aspiration. The word “goal” is loosely used and misused, which waters down our noble aspirations and weakens the power of true goal-setting.
Becoming wealthy is an aspiration, not a goal. It’s not wrong to aspire to be wealthy, but that should never be a destination, but rather a tool to accomplish better things.
Becoming wealthy for the sake of being rich is selfish and shallow. Becoming wealthy so that one has the power to positively impact his or her world is a great aspiration. To claim that one’s goal is to become wealthy misuses the word goal. In sports, a goal is a score.
As in any sport, the goal is to score points – touchdowns or points or runs – but that is not the long-term aspiration of a team. Goals reflect the short-term actions required to attain the long-term aspirations.
Goals are powerful and necessary to reach our destination. For wealth-making, goals are an absolute must! If we put together what we have learned thus far in the previous three blogs on goals, we now understand that we must first determine our aspirations – our dreams – for wealth-making. Why do you want to be wealthy? Perhaps that sounds crazy to you, but if you can’t answer that question, you’re really not prepared to do the hard work of actually making wealth.
What do you want to do with your wealth? And aside from all the basics – new house, vacations, boat, ski trips, college for your kids or grandkids – there must be a purpose that is substantial to warrant the energy required to make the kind of wealth your dreams may demand. We are confronted daily in the news with politicians who want to dismantle the wealthy’s wealth. They neither understand wealth nor the creation of it nor the proper use of it. Their plans are basically a grand scheme of government theft and conversion – felony crimes if committed by anyone else. But partly their intentions are due to the poor exercise of some wealthy members who exploit others to obtain their wealth, including those who inherit wealth and abuse the privilege by pure selfish indulgence. Yeah, if you have it, one can argue that it’s yours to use and abuse, but that’s pretty lame. Those who earn their wealth by and large know that there is responsibility that comes to the privileged. So… what are YOUR reasons for wanting to create a wealth-making machine? Don’t forget that the Good Book tells us, “Unto whom much is given, much shall be required”.
Once your dreams are articulated – the “what” and “why” – you must lay out your strategy. A strategy is the set of decisions you must make to obtain your dreams – the “how,” “when,” and “to/for whom”. Where will you set up your wealth-making machine? What city, state, county, area? How will you operate, organize, setup, whatever it is you plan to do? When will you begin? And to whom, or for whom, are you making, marketing, selling, manufacturing whatever it is?
Let’s assume you choose to build your wealth-making machine by buying, rehabbing and selling houses. That can be a good machine, for sure. Strategic thinking asks questions such as these:
- Where will you find houses to buy and rehab?
- Will you confine yourself to one zip code or one city?
- Do you know which contractors you will use?
- Where will you purchase your building materials?
- Do you have a realtor you can work with?
- Do you have a real estate attorney and/or title company you can handle the sales of your houses?
- Who will find buyers for your rehabbed houses?
- How do you determine a good purchase price – both the rehab cost and the selling price?
- Who will do your landscaping?
- Who will design and select interior decor?
- How will you finance the purchase?
- How will you finance the rehabbing expenses?
- How will you decide how many houses you can flip per year/month?
- Do you have the financial resources to flip that many?
- What processes will you use for bookkeeping? Scheduling? Purchasing? Taxes? Payroll?
- Will you form an LLC or be a sole-proprietorship? A limited partnership?
Does all of this sound a little overwhelming? If you have never flipped a house, it can be. So, how does one approach all of these and a hundred more questions that must be addressed? By setting goals. Goals are the means to tackle each of these questions. For example, one of your goals could be to read at least three books on the topic of flipping houses. In that goal you set a start date and an ending date to get that reading done. “Whenever” does not cut it if you are going to be an entrepreneur. A second goal could be to watch YouTube videos on flipping houses to see the actual process. YouTube is like attending a technical school and can be of enormous help.
Another goal could be to list and answer on paper all the above questions plus others that you discover in your reading and videos. Each goal should list time parameters, so you keep on a goal-oriented schedule.
So then, a goal-setting method could look a little like this:
Goal 1: I will write out my aspirations for wealth, including the whys and whats. What is my ultimate aspiration for being wealthy? I will begin on January 15th and will complete it by January 31st. I will review it monthly.
Goal 2: I will list the strategic questions with accompanying answers for achieving my aspirations. I will make my list of questions and answers as I read books and study other materials. I will begin this process on or before February 1. I will complete it on or before June 1. (this date all depends on your present schedule. Some may want to take a full year to strategically plan how they will start their rehab business, and that is not a bad goal).
Goal 3: I will read at least 5 books on rehabbing, starting no later than February 10 and finish them no later than April 10. (Again, those time frames are entirely up to you, but be sure you set goals that are realistic but that also keep you focused and on track).
Once your goals are complete for these, you would then prepare a new set of goals for working through your strategic questions. Goals can help you walk step by step through the deeper water of all the preparation work as well as the day-to-day action items that must be completed.
Goals are the step ladder that give us measurable, reachable means of climbing to our wealth aspirations. Goals help us budget our time and money. Wealth-creation lies in the mind of so many, but a simple set of practical goals can take them from our mind and turn them into aspirations with real substance. Goals help us understand and act on the nitty-gritty details that turn ideas into money. Money doesn’t grow on trees, but if it did, goals would help us pick a site, dig a hole, plant the tree, water it and fertilize it, prune it, and harvest the cash.