“If you don’t know where you are going, any road will take you there” – Lewis Carroll 

 

Where are you going? Until you can answer that question, you can’t say what path is the best choice for you to take. Without knowing your direction, without having a goal, or without knowing where you want to end up, you can often expend a lot of mental and physical energy without making any meaningful progress. Without direction, without a destination, without a goal, how do you pick a direction, choose a road, or plot a course to get “there”? We will take a look at the value of setting goals in this weeks Inside Look at Building Towards Wealth.

Having goals, a destination we are working towards makes choosing the path we should take easier. We have presented a myriad of choices every day and the volume of choice seems to only get greater every year. It can become a mental drain as we deal with decision fatigue. Having goals that guide our priorities makes it easier for us to quickly make decisions and avoid that fatigue. By avoiding decision fatigue, we can learn how to avoid bad decisions.

This is part of what financial planning brings to the table. It allows us to set our path, in line with our values and then helps us stay on that path.

Good planning is about expressing and working on what is important in life and choosing the roads to get to the destination.

If you have 1 dollar it cannot be spent multiple times, you must decide what the priority is. The same is true of your time and your energy. You only have so much of it to spend. 

I speak of this in financial planning terms but this is true of business planning, family planning, and any other process where you have an outcome you would like to achieve.

One of my favorite stories about setting and prioritizing goals is a story that involves billionaire investor Warren Buffett.  

According to the story, Mike Flint, who worked as Buffett’s personal airplane pilot for a decade, was discussing career priorities with his boss when Buffett walked him through a simple exercise. (I suggest you stop after every step and complete the step for yourself.)

Step 1: Write down your top 25 goals. 

The first thing Warren Buffett asked Flint to do was to list the most important career goals he wanted to achieve throughout his lifetime. These would total to 25 goals. 

 

Step 2: Draw a circle around your top 5 goals. 

Once Flint compiled his list of 25 career goals, Buffett asked him to draw a circle around his top 5 most important goals. Flint was hesitant because each goal was important to him, but nevertheless, he circled five goals. Then, Buffett asked, “Are you sure these are the absolute highest priority for you.” Flint replied, “Yes.” 

 

Step 3: Focus on your top 5 goals and say no to the rest. 

After the brief discussion, Flint said to Buffett, “Warren, these are the most important things in my life right now. I’m going to get to work on them right away. I’ll start tomorrow. Actually, no I’ll start tonight.”

Buffett replied, “But what about these other 20 things on your list that you didn’t circle? What is your plan for completing those?” Flint replied swiftly, “Well the top five are my primary focus but the other twenty come in at a close second. They are still important, so I’ll work on those intermittently as I see fit as I’m getting through my top 5. They are not as urgent, but I still plan to give them dedicated effort.” 

After a brief moment of silence, Buffett looked straight into Flint’s eyes and said, “No. You’ve got it wrong Mike. Everything you didn’t circle just became you ‘avoid at all cost list’. No matter what, these things get no attention from you until you’ve succeeded with your top 5.” 

This strategy can be applied both to your long-term and your short-term goals, as an exercise to get you to express your goals and to focus on the ones that are really important in life. Eliminate the inessential. 

That said, getting rid of wasteful items and decisions is relatively easy. It’s eliminating things you care about that are difficult. It is hard to prevent using your time on things that are easy to rationalize, but that have little payoff. The tasks that have the greatest likelihood of derailing your progress are the ones you care about, but that isn’t truly important. This is an excellent time to outsource the non-essential parts of your life. 

Every behavior has a cost. Even neutral behaviors aren’t really neutral. They take up time, energy, and space that could be put toward better behaviors or more important tasks. We are often spinning in motion instead of acting.

What are your goals for this year? Please share some of them with me.

I will be sharing mine in a blog post in the near future.

Here is to hoping you had a Happy Holidays and have a wonderful and prosperous New Year.