Happy New Year! It's that time of year when many of us resolve to change things for the coming year. We make a list of goals that we plan to stick to for the remainder of the following year. That’s great. What's not great is that the overwhelming majority of us don't stick to those goals. I can't actually prove why but my theory is that most of us have goals that create deprivation. Meaning our goal includes depriving ourselves of something we really like doing.
Typical New Year's Resolutions
For example, many New Year's resolutions look something like this:
- Lose weight
- Drink less alcohol
- Pay off debt
- Go to bed earlier
- Stop procrastinating
While those are admirable goals they may cause deprivation. What if we like eating, drinking, spending money, staying up late and postponing things that cause us pain? I certainly like those things! That makes these goals unsustainable for me. I won't stick with them. I can't stick with them because the goal is centered around me depriving myself which takes willpower and willpower is a finite resource. We run out of willpower eventually.
Deprivation is not a realistic path to success. Our goals need to give us something we want - not take away something we like. And we need a plan to accomplish those goals. A goal without a plan is simply a wish. We've all heard that statement before. However cliché it may be, it's true. If you have a goal to do something and you have no plan to accomplish that goal you have exactly zero chance of succeeding. What if there was a different way?
80/20 Your Goals
I'm a huge proponent of the 80/20 Principle also know as the Pareto Principle. I love it so much that I named my company after the principle. What is the 80/20 Principle?
The 80/20 Principle simply stated means that 80 percent of your outcomes occur from 20 percent of your inputs, or said another way, 20 percent of your actions cause 80 percent of your results.
So following that principle according to our New Year's resolution list above, one of those goals would give us 80 percent of what we really want to achieve. It could be that achieving one of the goals listed above could help us achieve the other four without much additional effort.
Example: What if your debt was causing you to eat more, drink more, lose sleep and because it seemed overwhelming, you postponed doing anything about it? That would mean that in that list above creating a plan to start attacking your debt would also possibly lead to positive results towards the other goals you want to achieve.
I want you to really look at your goals and resolutions and find that one goal that will give you the most results. Once you identify that goal, create a plan that will guarantee success. Try it. What do you have to lose?
You Need A Plan
Plain and simple, you need a plan. Once we have applied the 80/20 Principle to our goals and identified the goal that will give us the best results, we need a plan to achieve it. As stated earlier, a goal without a plan is just a wish.
Example: Using the 80/20 Principle, we identified that paying off debt was the goal that would help us achieve our other goals. It's the lynchpin so to speak. So we need a plan to pay off our debt.
How do we do that? A simple Google search on "How to pay off debt" led me to a long list of results. One of those results was Dave Ramsey who, in my opinion, happens to be the world's best teacher on how to eliminate debt. (I'm a former student.) He gives a detailed plan on how to actually achieve that goal. Bingo! We have found a plan to achieve the goal that will give us 80 percent of the results we want!
Try Something Different With Your Goals This Year
Create your list of goals, apply the 80/20 Principle to those goals, create a plan to focus on the goal(s) you identified using the 80/20 Principle. What have you go to lose? Besides some debt and maybe some extra weight?!
At 80/20 Financial Services we use this same approach to retirement and investment planning.
A goal of retiring - without a plan to get there - is simply a plan to outlive your money. Retirement isn't some magical age. It's a dollar amount. If you're age 50 or over and still in the accumulation phase (pre-retirement) we can help you figure out where you need to go and how to get there. If you are retired or nearing retirement, we can create a plan which will outpace inflation and possibly leave a legacy to your family. The consultation is free and without obligation. Contact us to set up a consultation.
Thanks for reading!
80/20 Financial Services is an independent Registered Investment Advisory Firm. Our focus is working with retirees, and we specialize in working with retirees who are approaching or going through the retirement transition. We are located in Ozark, MO but we have the ability to work with clients throughout the United States. Contact us today for help with your retirement needs.