Financial Goal: What Do You Want to Achieve in 2017
So here we are, approaching the beginning of the second quarter of 2017. How have your New Years resolutions been doing? If any of them were financial goals, are you on track to meet your financial goal?
Of course, only you can answer these questions. For the purpose of this article, I would like to help you revisit what goals you wanted to achieve in 2017.
Keeping the general nature of this article, we want to ask you what is it that on December 31, 2017, you can look back and say you achieved certain financial goals in your life? Let’s consider a few thoughts.
Why do you want to achieve a Financial Goal?
Most people will typically say that they want to make more money. Of course, this comes in the way of either a raise at work, taking on a second job, or even starting a side business to bring in more income.
The question that one needs to answer is why do you want to make more money or achieve a certain financial goal?
If you do not know the answer to that question, then maybe you are simply self-defeating your purpose and may not achieve it. Here is why?
Getting or making more money is not really a goal. Because at the end of more money is the question of “then what or to what purpose”? You need to answer this to your satisfaction.
This is because money is not the end game. Money is simply a tool to help you achieve and accomplish the lifestyle you desire.
If you have not actually taken the time to create the life by design that you desire, then making more money will simply create more of what you maybe do not ultimately want.
So create your life by design first, and increasing your income as a means to helping you attain that design. Increase your net worth as a goal. Here’s a good article from Inc.com on creating your life by design.
Most people do not take the time to look at this as a financial goal but the reality is that net worth is the true measurement of financial success. Let’s take a look at this. By definition, net worth is simply the difference between the value of your assets minus your liabilities or debts.
To keep it simple, just list your assets as your bank accounts, house, vehicles, retirement accounts, brokerage accounts and even any businesses, cash value life insurance, and annuities that you own that you can determine the true market value.
Then list any liabilities that you have that are not paid off in 30 days. This includes mortgages, vehicle loans, credit cards, personal loans you owe and so forth.
Then simply subtract the total value of your assets minus the total value of your liabilities. Take the difference divide by the total asset value time 100. That is you net worth percentage. In formula it looks like this:
Total Assets – Total liability = Net Worth
Networth / Total assets x 100 = Percent of ownership
Now simply do this at the end of every month. This will actually tell you that you are progressing rather than regressing every month.
The financial goal here would be to increase your Net Worth and your percentage of ownership each and every month, even if by a fraction.
Why would this be a good goal? Because even making more money, or trying to increase your cash flow will not help you enjoy life more if you simply are increasing your debt load.
So the strategy here is to lower your liability obligations and increase your asset ownership. Think of this as a financial goal that will help you enjoy your life, not hinder your life.