Are money goals good?

Question

I'm aware for a while now that goals really can be empowering in life.

But what I haven't found alot of info about are money related goals.

Do you find them good or bad? Can they truly push you out of your comfort zone?

Do you have any experience with money goals? Have they worked out for you?

For example, a SMART money goal might be: "earn 100,000$ by the end of the next year".

Do you prefer having more concrete, less abstract goals?

Answer 1

The big advantage of concrete goals like dollar amounts is that they are easily quantifiable, which means you can easily analyze them (eg. making a graph of money over time, making a pie chart of your budget, applying statistics, etc.) Quantification helps cut through many of the psychological biases people tend to have. Numbers promote a more scientific approach.

Obviously it would be a mistake to ignore other goals completely simply because they are not amenable to quantification, but I think it makes sense to prefer concrete, quantitative goals.

Answer 2

In my opinion, no.

Money is the worst possible goal you can have. It's a tool. What do you plan to do with the money? Start a business? Buy a nice car? Buy a house? Buy a supermodel wife?

Money can work as a checkpoint, e.g. I want respect -> I want a Mercedes E Class -> I want a million dollars.

It's more quantifiable, but in this case really have to think if you can buy respect with a nice car, or whether you can do it with a smaller car. You should continually check if your major goals are still relevant to it. And the value of money changes -- your million dollars in 20 years might be worth only 600 thousand today.

Or you might want to start a business, get an ivy league PhD, or start a family. In that case, you actually need to spend money. You might actually reach that goal without having a certain amount of money on hand, and in fact, the goal of saving up money might go against it.

Almost every thing which you can get with money, you can often find somewhere. For example, you could find a job which offers luxury company cars. Salary goals are difficult, because a high salary in one job might come at the cost of a lot of company benefits.

And finally, actually keeping a lot of money in your bank account is a very bad idea. You should look into investing some of it if you have more than you need, at least in buying some solid assets like land or silver which you can trade back in the future.

Answer 3

It should entirely depends on what you need to do- if one of your needs is that you want to get a new apartment and your rent is X more than your current place, you may want to have a goal staying that you will increase your monthly pay by X before you buy it.

As @Muz says though, having money itself as the goal is a bit of a negative goal as it doesn't take into account many success factors and is often seen as one of the most selfish goals.

Answer 4

I think money goals can be a disaster. Improving your presentation skill so you can present like Steve jobs and after that you can earn your money is the more appropriate and motivating goal in my opinion. Not the money coming first.

Money is one of the most important thing in our life but it is very important that it should not take over our lives and mind. you might have heard that follow your passion and the money follows. I think this should be the way to move forward. In my personal opinion success should not be measured in term of money. if you can pay your bills , feed you and your family, have a reasonable status in society and afford a holiday to your place of liking once a year you are doing fine. In short someone affording some luxuries and every necessities in their life then he is successful.I can say with surety here that Bill Gates or Mark Zukerberg were not thinking about the millions or billion of dollars when they started. With lot of hard work and with some luck they are considered to be very successful.

Answer 5

What I see as a problem with money goals is that people will often sacrifice the things they really want to reach a dollar figure.

So suppose your goal is to make 100K by Jan 2014. Right now you make 60K in a job you enjoy with people you like to work with. You work to get a promotion to meet your monetary goal, but even after you get it, you only make 75K.

So to meet your goal you look for a new job elsewhere. You end up making 100K doing a job you hate, working with people who are unethical and where you work 80-90 hours a week and you fritter the money away on the "things" you need to look successful in this new workplace like a new wardrobe and a fancy car and house (It's not frittering if those were your goals but only if you are doing it to make an impression and those aren't the things you actually want).

In fact, you may have gone into more debt to live the 100K lifestyle and actually be worse off financially than you were when your salary was more modest. You might even find yourself divorced because your spouse didn't like it when you worked 80 hours a week.

Were you better off at 60K? As long as you could meet your basic food and shelter type needs, probably.

I've known a lot of financially successful people who weren't happy becasue they ended up still not getting the things they really wanted because the goal to make more money took over their lives. When money becomes the goal intsead of the tool, you can never have enough to be satisfied becasue tehre is always someone richer than you are.

Now money goals that have to do with fixing your financial position so that you are able to live better such as reducing the amount of credit card debt, those are good goals. They don't lead to an ever increasing cycle of greed.

Answer 6

Goals are always good. If you want to set a goal where, by a certain date, you will be making a certain amount of money, it's fine, as long as you realize you're not finished. It's similar to the concept of the "New Year's Resolution"...I want to lose twenty pounds this year, I want to have $10,000 in my bank account by December 31, etc. The goal is clear, but all you have done is establish your success and failure scenarios. If the goal was twenty, and you only lost nineteen, it is a failure scenario by definition.

What I would suggest is to identify those things you need to do in order to achieve your goal, and focus your energy on your journey, rather than the destination. Losing twenty pounds is a great goal, but how will you stay on the path to your goal. You could decide to eliminate breads, pasta, and potatoes from your diet for the next 30 days. Once you establish the habit and see the result, it becomes easier to sustain the behavior over time, because you've narrowed your focus to a small change.

As far as money goals are concerned, they are, by nature, incomplete, because it will still require some action on your part to make that goal and that action is still undefined. A better money goal, in my opinion, is "I want to build a niche web site which will earn me $1000 per month by the end of the year." You've not only stated your goal, but you've also described how you wish to achieve that goal, which should help keep you on the path. Anything that is not contributing toward that goal should be a candidate for removal from your life, depending on how important the achievement is to you.