Why Your Investment Goals Are Not Working

I made it a habit to study successful people and one thing in common is that they set very effective goals. In this article, I share the reasons why some are successful and some of them never achieved their goals.

1. Successful People Know Their "Why"

When we set out our goals, we must always ask ourselves this questions:

"Why do we want to achieve this goal in the first place?"

If you cannot find a strong reason, chances are that you will never achieve this goal.

For example, for years, I always wanted to six pack abs. I wanted it but I didn't find any strong reason to do it. Guess what - I didn't get any six pack. Just one big pack.

The reason is because there was no strong reason for me to get six pack in the first place!

However, when it comes to investments - I had a very strong why.

My "why" was that I wanted to have a freedom of choice for myself. I wanted to make my job a choice and not a necessity. I am guaranteed that I am more motivated than most people to make this happen. There was absolutely no way that in my 30s that I will still be working for an employer. I wanted freedom. Why? Because I have seen my colleagues worked till late hours and never had much time for their families or their hobbies. I didn't want that.

In my mind, I have already told myself this:

"It is either I work extremely hard for a few years and enjoy for the rest of my life...or I do nothing productive in my 20s and work for the rest of my life."

This is why when everyone else in their 20s were just going for vacations and enjoying their life - I got immersed in educating myself how to invest for the sole purpose of financial freedom. 

2. They Focus On The Who, Not The How

Let me quote Jim Rohn on this.

"Aim to become a millionaire not for the million dollars in your bank, but the person you will have to become in order to hit that million dollars. This way, even if that million dollars is taken away from you, you will definitely make back the million dollars."

You need to read that quote over and over again.

You need to focus on the person that you have to become to reach your goal.

Why is this so important?

Most people ask very surface level questions - "where can I find the best stock to invest in?"

The right question to ask - "how do I become a millionaire investor."

Do you know what is the difference between the two statement?

The first statement focuses on tactics while the second focus on the mindset.

When we ask ourselves "how do I become a better investor" - we force ourselves to think where are our weaknesses and to improve on them.

And as you develop yourself into a better investor, it is where market crashes excites you instead of causing you to panic. No amount of tactics can teach you how to cope emotionally with a market crash. Only your mindset can.

Once you have established that identity, hitting your first million becomes an eventual process. I cannot stress this enough - your mind is the greatest weapon.

3. They Focus On Process Goals, Not Results Goals

Imagine you want to lose weight and you have a choice to make between one of these goals. Which will be more effective:

• My goal is to lose 5 kg by running
• My goal is to run 5 km every week

I want you to take some time to read these two goals carefully and understand the difference. Ready?

You see the first one is a results-based goal where the desired result is losing 5 kg. The second is a process-based goal to run 5km every week.

Now, by running 5km every week, you can then possibly hit your 5kg weight loss goal.

What exactly is the difference? The answer is motivation.

You see, when it comes to setting long term goals - most people give up because they do not see results instantly. Imagine if your goal is to lose 5kg - and you see no significant progress for a few weeks...most people will simply give up.

However, when you shift your goals to a process goal - you no longer attach the success of your goal to losing 5kg but rather, you associate it to running 5 km every week. Isn't that much easier? And every week when you managed to run 5 km, you will feel success and you will want to keep going forward. Eventually, losing 5 kg is the result.

I hope that you see why process goals are much more powerful than results goals. Result-based goal can sometimes demoralize you when you don't see immediate results. Take investing for example.

Many people set such goals for investing - "I want to hit a million dollars in my investment portfolio."

Imagine after several years, you still have not hit your million dollars - you are going to get demoralize and worse constantly jumping from one strategy to another with no real results. Soon, you wasted a good ten years of your investing journey.

Instead, the real process goals should be:

"My goal is to add X% of my income to my investment portfolio every single month"

"My goal is to make sure that a stock fulfill all my checklist before buying"

"My goal is to make sure I follow entry and exit rules strictly when using options"

These are much more powerful goals - and our focus should be on the process. When we do these, hitting the million dollars becomes an eventual result.

The Bottom Line

Setting effective goals are one of the most important things in order to move you forward. If you have been setting goals in the past, and it has not really worked out yet - I hope that this article gave you clarity on how to set more effective investment goals and become a better investor.

On a side note, I also encourage those who are not familiar with investing to check out a recorded webinar training that I have done.