Thursday, November 29, 2012

Establishing Goals And Dreams

Yesterday I posted a recap of 2012.

Mr SMG looks up from his iPad in surprise that I finally updated this blog, reads it and then grumbles about how going snowboarding in Canada and Colorado is unfeasible due to our commitments and plans for 2013. It is rather disappointing to know that we may be missing a few snowboarding seasons.

We will be going away to Singapore in a few weeks time, having returned from Europe not long ago. So can't afford to jet off to multiple holidays plus an overseas wedding in addition to buying a freakingly expensive house in Sydney.

I'm rather trepidacious about the potentially monstrous mortgage and have compiled several what-if worse case scenarios if anything goes wrong - what I'll liquidate first (the emergency funds in the mortgage offset), liquidate secondly (my stock portfolio and his managed funds) and liquidate as last resort (my apartment).

I'm being overly dramatic though. We can still afford the potential house mortgage for approximately two years with both of us not earning any direct income from employment before we hit the wall and need to liquidate the illiquid assets such as my apartment. So yeah, haven't bought the house yet but have already crunched the various scenarios into a pile of crumbs already. 

So here are my rough goals(again) going forward into 2013, reposted with edits:

1. Something massive x 2 (could I be more 007 like? lol)
2. Buy a house
3. If time+budget+life permits, travel South East Asia (Thailand/Cambodia/Vietnam)
4. Work on side hobbies (photo props/card designs/iPhone apps) and get them launched

Just remembered that I also did a recap of 2011 goals which you can read about here.

Oddly enough, the goals that I hadn't fully achieved in 2011 were all achieved in 2012.

The goals that I haven't fully achieved in 2012 will undoubtedly be achieved in 2013.

Below is a how-to guide on how to set goals and objectives if you don't know how or you wish to learn how. Remember, that all goals must meet the S.M.A.R.T criterias of being specific, measurable, achievable, realistic and timely. You can always sneak in some pie-in-the-sky goals like I always just never know what may come true ;)

Setting Goals And Objectives:

1. What do you want to achieve in the long term 5-10 years from now?
2. What do you want to achieve in the medium term 3-5 years from now to achieve your long term goals?
3. What do you need to do in the short term, today-3 years time to achieve your medium and long term goals?
4. Establish your dreams and goals for various categories such as: family, friends, personal relationship, career, health, finances. For each of those categories, break them down into what you want for the long term and what you need to do in the short to medium term in order to realistically achieve those long term goals.

Note that the time periods are just a guidance and you don't have to set long term, 10 year goals.

However Robert Kiyosaki writes that you need to start off with what and where you want to be in 5-10 years time before you know what you need to do for the next few years to get to where you want to be. (It's blatantly obvious that I've been reading Kiyosaki's books eh?!)

Example Of How To Set Your Goals

A friend of mine tells me that he wants to buy a house. I asked him when does he hope to buy one? He says he doesn't know when and he's got no idea when or how he can afford one. I asked him a few questions to sort out what he wants:
* Which area does he like and wish to buy a house in? Coastal
* What type of house does he want? At least 3 bedrooms, 1 bathroom and 1 carpark
* What are the prices of houses like that in the area he wants to buy in? $500,000

From those answers, we deduced that:
1. He'll need to save up 20% of $500,000 as a deposit
2. He'll need to save up 5% of $500,000 for the miscellaneous expenses such as legal fees, stamp duty, mortgage duty, pest and building inspections, settlement fees etc
3. Therefore he'll need to save up at least $125,000 to buy a house
4. How much can he save each week? $125,000 divided by what he can save weekly or monthly will determine how long it will take him to realistically achieve his long term goal

Example: If he can save $800 per week, then his goals would look something like:
$125,000/$800 = 156 weeks worth of savings = 3 years worth of saving

1. Long term goal-  buy a $500,000 house in 3 years time
2. Medium term - save up at least  $41,666 annually
3. Short term - save up $800 per week     

 So instead of drifting along with the idea that he wants to buy a house in the near future, he can set realistic goals and KNOW that he can buy one in three years time IF he saves $800 weekly

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