I’d like to share a story that helps to illustrate the importance of getting clear on your investment strategy. The first person in the story is my friend Shannon. We’ve known each other for years. Shannon is a teacher and an investor. When she first started out in the working world, she had a very clear vision of what she wanted from her investments: a mortgage-free home by the time she was 40, a cottage in lake country, and a chunk of cash to send her kids to university. I remember her sharing these thoughts with me way back when. Shannon had written them down, mapped out some savings and investment principles that she was determined to follow, and made a point of reviewing her progress with me and a few others once a year.
The second person is an investor I met at a management conference some years back. He’d been out of school and working for a few years, getting established in his job as an auditor. Robert’s plan for his investments did not exist. At least, his investment goals were never written down. But he wanted what a lot of young people want: a nice big house to live in, nice car to drive, trips to the south in the winter, and the latest tech gadgets. Nothing wrong with those goals at all.
So Shannon wrote her investment objectives down and revisited them every year to make sure she was on track. Robert kept his in his head. When I caught up with them both a couple of months ago – some 20 years since graduation – who do you think had achieved their goals? Of course, it was Shannon! They were both doing well in their careers and both had wonderful homes and families, but only Shannon had achieved her goals of living mortgage-free and spending time at her cottage in the summer.
Is it possible the only real difference between the two is that one wrote down her goals and the other didn’t? I can only share with you my own experience – and I’ve tried both approaches. Let me tell you that there is something magical about writing down your goals and keeping them close to you. I don’t know why it works, but I do know IT WORKS!
In our increasingly fast-paced world with more and more pressures, it’s very easy to get distracted and pulled in many different directions. But your investment goals should be clear. Your vision for the future needs to be as well. And the clearer it is, the more focused it becomes, the more chance you have of seeing it come true. Otherwise, you’ll find yourself as an investor chasing the latest hot tip, or continually switching funds around from this sector to that without really knowing why. For those of us who have tried that approach, it rarely works.
No, the best thing is to get clear on what you want, right down to the tiniest details. So today, if you’re up for a challenge, I have a bit of homework for you to do, and that is to take four pieces of paper. On top of the first, you will write My Career Goals, on the second, My Physical Goals, on the third, My Financial Goals and on the fourth My Spiritual Goals. Now below each of those headings, write down the top 10 objectives for each. It doesn’t matter how big or small these objectives are because if you write them down and follow them up from time to time, you will achieve them! There’s no magic involved here. No secret handshakes or anything like that. The simple process of writing them down and reviewing them from time to time is enough to set in motion a series of events that will lead you to achieving them.
Don’t believe me? Well let’s try it for a few months and see what happens. After you’ve written out your goals, review them once a week for the first month and while you’re doing this, jot down your ideas for achieving them. That’s all. In six months, look at the progress you’ve made towards each one. You may have even achieved some! Then ask yourself – and I mean honestly ask yourself – whether you would have made that progress without writing them down.
Stop what you’re doing right now. Find some paper and do the exercise. Then let me know how it works for you!
