Do you make new year’s resolutions? Do you keep them? By the end of January have you already forgotten what they were? Performance coach Damian Shields shares some tips on setting goals that should help ensure you actually achieve your resolutions!
1. You must know your WHY.
Why do you want to achieve whatever your goal is? To answer this question, it’s useful to identify the pros and cons. So, if your resolution is to start a pension in 2020, to use a financial example, you would ask yourself what you have to gain from saving for retirement and what you have to lose.
On the gains side, you will have an income in retirement that is more than the state pension (currently €248 per week). If you think you could live comfortably on less than €13,000 per year then you may decide it’s not worth it to save into a pension. Most people are shocked at that number, and when you consider that the state pension may well decrease in the future and the retirement age is certainly going up, saving for a pension looks like a good idea. Another major advantage of sticking with your resolution is that it is extremely tax efficient to contribute to a pension because your contributions are tax free (up to certain annual limits).
There is another one; your money has the chance to grow. The Irish Times reported last week (Tuesday 7th January) that according to figures from Rubicon Investment Consulting, the average rate of return in pensions over the last 10 years was 4.7% per annum, which is considerably higher than leaving the money in a savings account and just as good as the returns offered by many other investment types.
In the minus column, you may feel that travelling the world or investing in your business or some other use of your money is a bigger priority.
Noting the pros and cons allows you to see clearly what you have to gain by sticking with the resolution and this should give you the motivation to achieve it. If you decide what you have to lose is too important then you can scratch that resolution off your list right now. You’re destined to fail.
2. Allow yourself to dream what it will be like to achieve it. Get a clear vision.
This is a very important step in goal setting that all the great sports coaches use. Seeing ourselves in the state we plan to be in has a powerful impact on our sub-conscious mind. It wires the achievement of the dream into our brains. So, for the retirement example, visualise your retirement with the cushion of your pension – the trips you’d make, the holiday home you’d buy, the hobbies you would enjoy and the time you could spend with your loved ones while you are young and fit enough to get the most out of it.
3. Clearly identify the steps you need to take to make it happen.
This is so important. Skipping this step is the reason most resolutions fail. If you have no idea what you need to do to achieve the goal, you won’t even take the first step towards it. In NASA, they have the ‘initial state’ and the ‘goal state’ and in between, there is a succession of actions. You might not know what they all are, but identifying the first few will at least get you on your way. So, to start a pension, your steps could be:
1) Speak to an advisor
2) Budget my investment
3) Choose where to invest
4) Do the paperwork
5) Review it annually
Highlight milestones along the way that will prove progress to you.
4. Focus on the Actions, not the eventual results.
With the actions mapped out, achieving the goal seems so much easier, so instead of going around thinking “This year I have to start a pension” which might seem daunting or unmanageable, you think, “This week I’m going to set up a meeting with a financial advisor”. When you’ve done that the next step is to decide how much you want to invest – your advisor will advise you what you should be investing now if you want a certain income in retirement and you can check your budget to see if you can afford that. Simple – done, and on to the next action. Focusing on the next action breaks the goal into manageable chunks and once you’ve achieved one or two, you build up momentum, which should carry you through to achieving the goal of setting up the pension.
5. Be kind to yourself. Celebrate progress and if you slip, don’t rubbish your progress up to this point.
So, you’d planned to meet the financial adviser this week and that didn’t happen. That’s OK, just meet him or her next week. Congratulate yourself for every action you do complete and pick it up again if you lose momentum. This is where remembering what’s in it for you (the ‘why’) and imagining yourself living that comfortable life in retirement (the clear vision) come in handy – steps one and two will help you get back on the horse.
6. Finally, don’t be afraid to make adjustments. Adjust your actions or adjust your goals.
Sometimes your circumstances change, and you realise you want something slightly (or very) different. That’s OK. Change your goal and use steps one to five to achieve the new one. If you can’t seem to achieve your resolution, maybe you got the actions mixed up or you need to try a different set of actions.
Coming back to the resolution of setting up the pension, this is where the regular financial review is such a good idea – if not annually, you should certainly have one when your life circumstances change; getting married (or getting divorced), having children, becoming a director of a company, a shareholder, illness or death of parents and so on – so that you can adjust your goals or your actions.
So good luck with making those dreams happen in 2020, and if any of them happen to be financial, whether it’s actually starting a pension, sorting out your many pensions, getting life assurance or investing your excess cash, give us a call. Our experienced advisors cover most of Ireland and we’ll put you in touch with the one nearest you.
About Damian Shields
Damian is an experienced performance coach who works with our financial advisors on clarifying vision, setting and attaining goals, team building and one-to-one support. For more information, see www.focus2succeed.ie
MB Planning Ltd. T/A Clear Financial is regulated by the Central Bank of Ireland. Registered in Ireland No. 494837 Registered Address: Rathcoole Premier Office Centre, Main Street, Rathcoole, Co Dublin. Directors: Michael Bradley (MD), Ciaran Shanley.