Defining goals is critical to creating an appropriate investment program.  A goal in itself is a powerful thing; it gives us direction and allows us to focus our energy into something we have specifically chosen to accomplish.  So how do you set a good financial goal?  Like many other seasoned goal-setters, we believe all financial goals should be S.M.A.R.T.:

S – Specific

M – Measurable

A – Adjustable

R – Realistic

T – Time-based

A goal is not smart unless it meets each characteristic.  Let’s take a look at a couple examples:

Not a S.M.A.R.T. goal:

“I want to retire comfortably.”

S.M.A.R.T. goal:

“I want to retire in Florida by age 65, plan ending at 90, spending $100k per year, 3% inflation, 5% growth.”

Not a S.M.A.R.T. goal:

“I want to send my child to college.”

S.M.A.R.T. goal:

“I want to send my 3-year-old to UCLA by age 18, assuming 5% inflation, 6% growth.”

The more depth we have to our financial goals, the more likely we are to achieve them.  This will also force us to think deeper about what we truly want and help us see the path to achieving it. Before finalizing any financial goal, make sure it is specific, measurable, adjustable, realistic, and time-based.  Finally, don’t be afraid to be ambitious.  Like Michelangelo said, “The greater danger for most of us lies not in setting our aim too high and falling short; but in setting our aim too low, and achieving our mark.”  As always, if you need help determining what your financial goals are, we could help.