Goal setting fundamentals for property success (Ep.82)

In this week’s episode, Dave, Cate and Pete take you through:

1. Why is goal setting important? Cate asks the Property Planner, (Dave) to share his approach that he uses to enable his clients to achieve their property plan goals, from property goals, investing goals, lifestyle goals, to the ’flexibility stage of life goals.’ Pete sheds light on why people set goals, (particularly in January), and why so many people’s goals don’t come to fruition.
2. You can only manage what you can measure. Dave uncovers the professional approach he guides his clients on when creating goals, setting measurable targets and avoiding procrastination. He shares an interesting psychological study where a study focused on a group of students who were split into two groups; those who visualised the outcome of the goals, and those who visualised the process required to achieve the goals. Visualising the required steps is an integral part of successful goal setting.
3. Creating an action plan and holding yourself accountable. Setting goals is the vehicle that will drive you to your destination. Dave talks about the adoption of a timeframe map; when, where and how you’ll apply the behaviour.
4. Five core reasons why people set goals. Pete shares these five core reasons that he has incorporated into his university property investment course. Some can be set in tandem, but ultimately these various reasons for setting goals will determine what you buy, where you buy, and when you buy. Pete also offers some great insights for listeners who are keen to retire richer.
5. Keeping it simple (and avoid goal competition). Dave speaks candidly about one of his preferred authors, and a great lesson he’s picked up from Jim Collins, (Good to Great, Built to Last). The importance of setting three clear goals; “If you have more than three priorities, you have no priorities”, and he also encourages people to consider three things they should stop doing.
6. Set your goals for the now and hold yourself accountable. Dave cites Steven Covey (Seven Effective Habits); “Schedule your priorities daily, don’t prioritise your schedule”. And how to break down your long-term goals.
7. Dave breaks down S.M.A.R.T. goals. This is a well-known, clever method that is widely used by organisations and corporates for setting clear employee/team goals. Dave spells out how property investors can adopt this same methodology when setting their own goals.
8. Write your goals down, share your goals with others and create your action plan. Writing down goals improves recall and allows us to emotionally and intellectually connect with our goals. Sharing our goals with others increases the chances of us being able to keep ourselves accountable and enable us to take the right action with our goals. Re-evaluation and assessment of progress can only be done effectively when goals are clearly documented.
9. Why do some goals fail? Cate chats about some of the key contributors that block people’s goals from becoming reality.
10. What happens when people buy the wrong thing? Cate chats about the downsides of getting a costly decision wrong, and Pete clarifies the risk of opportunity cost.
11. And of course, our ‘gold nuggets’!

Resources:

• New Years’ Resolutions – What Investors Need To Do To Make Them Work
• Being True to Your New Years Resolution Ep#38
• 5 Tips for Investing in 2017
• How to succeed with Property and Create your Ideal Lifestyle
• Mortgage Strategy 101 – YouTube video series.

Show notes:

• Why is goal setting important?
• If you don’t know where you want to get to, you’re never going to get there. The first step is to set clear goals to achieve your dreams.
• Decide and focus on what’s really important to you – what do you want to achieve in life, what does that look like? Not just from a financial perspective, what we really want to do is create our ideal lifestyle.
• Property, lifestyle, investing, flexibility stage
• Effective goal setting also lets you measure progress – We can only manage what we can measure. Document the goals and track the outcomes.
• Writing down your goals – Overcome procrastination – should’ve, could’ve, would’ve,
• Visualize your dreams – in the book the ONE thing, it talks about studies that observe students on visualization of outcomes and visualizations on process. Those who visualize the process, are more likely to do it.
• Allows you to create a Plan, maybe even a Property Plan – If you don’t know what you want to accomplish, you can’t create a plan to get there. Setting goals is the vehicle that will drive you to your desired destination. Research has shown that you are 2x to 3x more likely to stick to your goals if you make a specific plan for when, where, and how you will perform the behavior.
• Goal setting also keeps you accountable.
• 5 core reasons why people invest in property
• Retire richer
• Retire earlier
• Earn extra income
• Earn enough extra income to work part time
• Give up your day job
• Which ones are you trying to achieve? That will determine what, where and when you buy.
• If you’ve got more than one goal, you need more than one strategy to achieve them.
• Ave financial planner will say you need 14 x your income to retire on – if you earn $70,000 – that means you want to retire with at least $1M.
• Tip 1. Visualise your goals
• Tip 2. Ruthlessly eliminate your goals / keep it simple
• Psychologists have a concept they refer to as “goal competition.” Goal competition says that one of the greatest barriers to achieving your goals is the other goals you have. In other words, your goals are competing with one another for your time and attention.
• One of my favorite authors, Jim Collins, who wrote Good to Great, Built to last and other great books says if: “If you have more than three priorities, you have no priorities.
• He sets 3 goals for the year, and also 3 things he will stop doing.
• Tip 3. Set your goals for the now
• Steven Covey (Seven Effective Habits); “Schedule your priorities daily, don’t prioritise your schedule”. In the book the One Thing is goes a bit like this:
• What’s your “some-day” goal
• What’s your five-year goal that will help you reach your “some-day” goal?
• What’s your one-year goal that will help you reach your five-year goal?
• What’s your monthly goal that will help you reach your one-year goal?
• What’s your weekly goal that will help you reach your monthly goal?
• What’s your daily goal that will help you reach your weekly goal?
• The planning fallacy is something that can strike the most organised people – but breaking down goals is critical to success.
• Tip 4. Create SMART Goals
• Specific (simple, sensible, significant).
• Measurable (meaningful, motivating).
• Achievable (agreed, attainable). Breaking your goals down into achievable steps are critical, or you may be overwhelmed and give up.
• Relevant (reasonable, realistic and resourced, results-based).
• Time bound (time-based, time limited, time/cost limited, timely, time-sensitive).
• Tip 5. Write your goals down
• Improves recall
• More likely to intellectually engage and emotionally connect
• Have them somewhere on you ideally or visual so you are thinking of them often.
• Tip 6. Share your goals
• Preferably with people who will support you on the journey.
• Tip 7. Create an action plan (or property plan) and time line
• Tip 8. Take action
• Tip 9. Re-evaluate and assess your progress
• Tip 10. Set for goals for different parts and time of life
• The big rock – the family home. This can de-rail your investment plans if you don’t have a plan for when, what you will purchase and how this fits in with your overall investment strategy.
• What happens when you do not plan correctly, if you rush the purchase and it underperforms
• You buy the wrong thing – it may force you to break your goals and keep working.
• If you buy a high capital growth asset at the end of your working life, and you need to stay on that corporate treadmill, you won’t be happy.
• Loathe to tell people to sell an asset, unless it makes good sense to do so – if it’s going to be a lemon for the long-term.
• Because it costs so much to buy and sell, you need to make the right decision, otherwise it can be very costly. If you’re not sure, seek professional help. Yes, that could be costly, but it will cost you more if you make the wrong decision.
• Then there is opportunity cost, if you had purchased a good property from the beginning, rather than holding a poor performing asset.
• Property mistakes
• People rush the purchase and buy the wrong asset, only to have it underperform
• People buy the wrong asset and then sell it
• People miss deductions because they don’t structure loans/purchases right.
• Goals can’t be achieved when opportunity strikes because finances and/or structures aren’t ready or suitable
• Regret down the track
• This is a big part of where people fail with property plans – you can lose a lot of money and not achieve your retirement goals. They have to sell property they otherwise could have held – you didn’t consider family home, purchased the wrong property, your mortgage strategy wasn’t optimized to hold property.

David Johnston, the Property Planner’s ‘Gold Nugget’ – for everything we’ve said, goal setting isn’t’ easy, taking the time to do it, making sure they align with your long-term dreams, is a difficult process. But then making sure you stick to it, is the real hard part. Be vulnerable, write them down, share them with your friends, loved ones, co-workers. Put it into practice daily, think about them, look at them, ultimately we are our habits. That’s what it takes to achieve your goals. If you fail sometimes, that’s ok. We learn more from failures, but keep at it. If you implement the things we’ve talked about today, you’ll be more likely to achieve the goals. Persistence pays off over time.

Peter Koulizos, the Property Professor’s ‘Gold Nugget’ – if you’re looking to make a big step, achieve a big goal, you need to work out the little steps. Break it down into small steps, then it looks far more achievable than this goal way out in the distance. On the property ladder, the hardest step to take is the first step. Work out how you’re going to take the first step first, then work your way up.