In Episode 2, we talked about why intention is the key to financial success.
But good intentions won’t simply make all your problems go away. To bring those intentions to life, you need to turn them into actionable goals that will drive your behaviour.
In this episode, we discuss:
- Why good intentions won’t magically make your money problems disappear.
- How to achieve everything you want in life by putting the “big rocks” first.
- A simple goal setting framework to help turn your intentions into actionable goals.
Case Study: Meet Abid & Amina
Their intentions for seeking wealth are:
- Support parents in old age
- Provide best education & opportunities for children
- Perform Hajj
- Find a way to retire early and travel
Their SMART goals are (written from Abid’s perspective):
- In 5 years my parents will retire. They will have enough money to live without help for an additional 5 years. By then they will be 70 and will need some financial help as retirement planning wasn’t on their mind when they were younger. They will need about $1000 a month to help with bills. Eventually they want to come live with us and sell their fully paid off house. My wife’s parents have enough to take care of themselves and will move in with my wife’s older sister’s family eventually.
- I want my kids to complete undergraduate studies and not have to go into any debt at all. The total cost in today’s dollars will be $75,000 each. This will happen 17 and 18 years from now. Also I want my kids to attend night school for Arabic and Quran, that will cost $150/month starting at age 3. I want to make sure I have money for extracurricular activities in high school for them as well. I want to build a fund of $10,000 each by the time they reach 13.
- In 5 years I want to go to Hajj with my spouse. It will cost us $15,000 each by then.
- Normal retirement age would be 65, but I want to be able to travel with my wife when I am 55 and work part time. I want to plan to work until I am 60, and be able to live a work optional lifestyle by that time. I know that average life expectancy is going up so I should be prepared to have income to last my wife and I until we are at least 90. I will not draw from my investments until the age of 60 at which point I want us to have 80% of the after-tax income we currently have.