When it comes to making and meeting your goals, financial or otherwise, how successful have you been?
Dr. Peter Kim has discovered that setting SMART goals leads to a higher success rate for him. What are these SMART goals? They’re not just intelligent, but contain key characteristics that are defined by the acronym.
I’ll let the good goal-oriented doctor spell out exactly what those are.
This post was originally published on Passive Income MD.
How To Set SMART Goals and Make Them Stick
I don’t know about you, but New Year’s resolutions have never stuck for me. At least, that is, not past the first few weeks. At some point, I realized that they weren’t all that helpful.
I’ve learned to set goals instead. I haven’t hit every (or even most) goal I’ve ever made either, but this past year, I’ve learned a ton about how to set goals, achieve them, and have them make a true impact on my life, rather than wasted time and effort.
But before we get into all that, let’s look at why we set goals at the beginning of the year in the first place. Why not just try to improve everything – health, wealth, relationships? Why not just aim to do better year-round?
While that’s awesome to do, we as humans need to strive for something specific. If you said, “In 2020, I want to be healthier,” no one would fault you. But without defining what success looks like, you’ll never know if you’re making progress. How can you know what specific actions to take to get closer to your goals?
To take that a step further, the creation of specific goals allows us to go big. If we create goals that challenge us, we can really grow. The effort it takes to reach those goals will help us move past our limiting beliefs and achieve things we never thought we could.
Finally, setting goals is important because it gives us a basic direction to start in. It helps us figure out how to best use our current resources, find out what resources we need, and how to use our time/energy appropriately.
Let’s say, for example, you’re on one island and want to sail to another island. The goal may be “make it to the other island,” but it’s much more likely to happen if you have an idea of what the coordinates are. It helps you figure out a game plan, like knowing how and where to launch. Sure, you’ll have to correct your course along the way, but always moving toward that goal will help you stay motivated.
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I like to refer to the SMART acronym when setting goals.
If you haven’t seen it, SMART stands for:
S – Specific
M – Measurable
A – Achievable
R – Realistic
T – Timeframe
Let’s take a look at each of these in depth.
The more specific your goal, the more likely it is that you’ll achieve it. To put this financially, one might set a goal to create more passive income next year. Another might set a goal of creating $1000/month of passive income next year.
Who do you think will have a better chance of coming up with specific actions that will help them achieve their goal?
This goes hand-in-hand with the idea of specificity. If a goal is specific, there will very likely be ways to measure or track your progress. Keeping an eye on your progress is important, because it helps build momentum and creates small wins along the way.
For example, $1000/month of passive income next year is easily measured; each source of passive income adds to the pot. Maybe it starts with a property purchase or a crowdfunding deal that nets you $250 a month. Well, that’s 25% toward your goal. Now you just need to figure out how to generate the next $750.
While I’m all for setting goals that will push you beyond what you think you can achieve, it’s important to set a goal that is achievable.
Let’s say that you have no experience or capital, but your goal is to generate $10,000/month of passive income within six months. To be honest, this is probably not going to happen.
It helps to listen to stories of others who have achieved what you want to achieve. This will help you see where the realistic range is.
Again, life is about momentum, and if you find yourself so far from your goals that you can’t see any way of getting there, it might discourage you from pressing on.
Again, I think we should all be striving toward goals that make us uncomfortable to set. In fact, if it makes you uncomfortable to voice it to your friend or partner . . . well, that’s not necessarily a bad thing.
I love that you’re challenging yourself. I felt really uncomfortable telling my wife that I was going to create $20,000 a month in passive income within ten years. It felt unachievable for me, but I had talked to a few people who had done it.
It was a lofty goal that would take a lot of work, but knew it was realistic. At the same time, if I said I expected to generate $100,000/month within a year, well, that might be beyond realistic.
Specificity is virtually meaningless without a timeline in place. People need timelines. I always think back to college & medical school, when deadlines were extremely motivating. That big exam or project made me productive (although I was, and still am, a crammer). I’m extremely motivated by deadlines and urgency. It fuels me and helps me know where to devote my energy.
Plus, without a timeline, that specific goal of yours can be put off and put off, until you get discouraged by your lack of progress. Nothing kills motivation faster.
Now that we have an idea of what it takes to makes a good goal, let’s bring it back to finances. In this regard to financial goals, you want to be specific with dollar amounts. The timeline for reaching that dollar amount is also extremely important.
For example, I’d like to create $1,000 a month in passive income by the end of 2020. That would be a great SMART goal.
As I mentioned previously, I’ve learned a lot this year about myself and creating goals, and how to make them stick.
I’ve learned that it’s important to know what you want to achieve but also why you want to achieve it. The reason why is what will drive you. If that reason is compelling enough, it’s the most powerful force out there.
So if you’re sitting down to make a goal, ask yourself why you want to achieve that goal. Frame the “why” in two ways:
- Why is it so important for me to achieve this goal? How will I feel if I achieve this goal? Who will it ultimately affect?
- What will happen if I don’t achieve this goal? How will I feel? Who will it ultimately affect?
I’ve learned to ask myself these questions often.
For example, when it came to create $20,000 per month in passive income, I answered those questions in the following ways:
Why is it so important for me to achieve this goal?
So that I will have financial freedom. This would allow to live life on my own terms, create a life in medicine that I choose, and spend quality time with my family.
How will I feel if I achieve this goal?
I would feel amazing. I would feel free and like life was extraordinary.
Who will it ultimately impact?
Besides myself and my well-being, it would impact my family. I would be able to devote quality time to them and really be present in the lives of my wife and kids. I wouldn’t have regrets later in life, knowing that I missed out on seeing their lives throughout the years.
It would also impact my patients because they would be getting a physician who chose to be there, rather than nearly obligated. I would be healthy both physically and mentally, and I’d be there to give them my all.
What will happen if I don’t achieve this goal?
I wouldn’t feel in control of my life. I would be trading time for dollars, stressed about the next paycheck or continued changes in medicine. I wouldn’t be in control of my time.
How would I feel if I didn’t achieve the goal?
I would feel trapped and potentially burnt out.
Who will it impact if I don’t achieve the goal?
It would definitely impact my family. I wouldn’t have the time or energy to devote to them. I would miss out on important moments. Later in life, I might regret that I worked so hard. My patients might also get a burnt out physician without the energy to give them the care they deserve.
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The End Result
Going through that “why” exercise made it very clear how important it was to achieve my goals. This gave me motivation that lasted far beyond the two weeks of a typical New Year’s resolution.
It made me hungry to figure out how to make it happen. It made me get resourceful. I was not going to be stopped; the stakes were too high.
So, every year and whenever I achieve a goal, I create new ones. You better believe I’ll use this system to continue to create goals that will push me to expand and grow.
One of my favorite quotes comes from Tony Robbins. He said that “happiness is progress.” Think about it. It’s not all about achieving your goals. Consider all the famous people or athletes who have achieved their goals but found themselves miserable afterward. I’ll bet you that they were happiest during their moments of striving, while they had something to shoot for.
Now, apply this to your own life. I know you’re all extremely successful. What keeps us going, sometimes, is the thought that “when I get this, I’ll be set.”
Well, whenever I achieved a goal, like getting into med school or residency or a job, the happiness lasted a while. But then it faded.
The key is to keep setting goals that push you to grow. You also need to connect those goals to reasons why you MUST make it happen. That will lead to a fulfilled, extraordinary year and a happy, extraordinary life.
Make it happen!
Want to create SMART goals of your own? Download my FREE Goal Setting Worksheet to help you start goal setting like a master!
Have you set goals using the SMART method? Have you found it to be effective in influencing goal completion?