PROGRESS is progressive. Author, professional speaker and consultant Brian Tracy says, "Goals are the fuel in the furnace of achievement. Think on paper and write them down!"
I've met and spoken to Tracy twice. I'm a mega fan and have lost track of how many of his 80+ published books I've bought and read from cover to cover. You might remember in last week's Money Thoughts column, I outlined for readers Tracy's incredibly helpful exercise called "back from the future" thinking.
Here is an elaboration of that life changing exercise in harnessing our human endowment of creative imagination:
1. Idealise your perfect future many years from now;
2. Write down — in a dedicated notebook you might label your LIFE JOURNAL — the specifics of that imagined perfect future life;
3. Describe in concrete terms as many facets of your idealised fantasised future as possible;
4. Figure out the intermediate rungs of the metaphoric ladder you'll need to scale to get from Point A, where you are today, to Point B, where you wish to get to;
5. Make each rung of your ladder a separate, manageable written goal in your LIFE JOURNAL;
6. Blend a coherent subset of your collection of goals into one ambitious and viable life-plan; and
7. Work your plan — one step or rung at a time.
This seven-step logical exercise can integrate your pursuit of some or most of your goals and sub-goals into a holistic plan for integrated whole-life success.
Warning: You won't be able to do so for ALL your numerous and disparate goals and sub-goals because we all have this incredible human capacity to impractically set clashing, mutually exclusive targets.
Some of those might be becoming a billionaire, never working more than two days a week, and yet watching five hours of Netflix a day, every day.
So, yes, we should dream big and then diligently work those plans to attain our dreams. But, no, we can't have it all; goal-setters, though, can undoubtedly have a lot.
DOUBLING OUR INCOME
And speaking of having a lot, let's peer through the narrower lens of personal economic success by exploring ambitious yet pragmatic strategies to increase your active income and your — eventually more important — passive income.
In last week's column, I outlined a situation where if you're currently earning RM8,000 a month, solely from active income, you might aim to raise your total income to RM30,000 within a decade. (You may read that column and many others here: www.nst.com.my/authors/rajen-devadason)
Last week I suggested you set one sub-goal of raising your earned ACTIVE income (AI) from RM8,000 to RM15,000, and your PASSIVE income (PI) from RM0 to RM15,000 a month from different passive income streams, including interest, dividends, distributions and rental.
First, how do we almost double our earned income, from a salaried job or from a personally run business? Well, regardless of the timeframe, the best ways to do so are to commit to lifelong learning and thus invest in yourself.
Toward those ends, I suggest establishing a written budget that earmarks a minimum of three per cent of your total monthly income on self- and career-development investments like relevant books, trade journals, workshops, seminars, conferences and conventions.
Doing so will fast-track your career. If that occurs, then roughly doubling your AI or Active Income in a decade is eminently achievable, particularly if you also spend the coming 10 years honing your language skills, most notably in English and Mandarin, which can be viable supporting sub-goals.
Conversely, raising your PASSIVE income (PI) each month from zero to RM15,000 in just one decade is very, very, very tough.
Not impossible, though, if you chunk out that sizable sub-goal to tinier milestone targets that involve creating four different PI streams comprising interest, dividends, cash distributions and rental.
ENJOY THE TRIP
Honestly, though, attaining such a large PI aggregate stream is too big a reach for most people — within 10 years. So, if you think it is impractical for you, then you might maintain your total income future target of RM30,000, yet still cut yourself some slack by giving yourself more time — perhaps 12, 15 or 20 years — to grow your PI to the targeted RM15,000.
Of course, in that case, if you meanwhile succeed in raising your AI to RM15,000 in 10 years (by 2035), then two, five or 10 years beyond that (in 2037, 2040 or 2045), it is likely your monthly AI will be well over your 2035 target AI of RM15,000 because of added seniority and hopefully increased competence. In other words, if you give yourself more time, you could overshoot your RM30,000 a month total income.
Note: If you keep a tighter lid on your rising expenses than in aggressively growing your income components, both AI and PI, then your monthly cash flow surplus will balloon.
And if you focus on allocating excess money wisely, your PI will eventually hit an inflection point and take off faster than your AI.
So, take your time and enjoy your trip. Success is often 99 per cent "journey" and only one per cent "destination".
© 2024 Rajen Devadason
Rajen Devadason, CFP, is a securities commission-licensed Financial Planner, professional speaker and author. Read his free articles at www.FreeCoolArticles.com; he may be connected with on LinkedIn at www.linkedin.com/in/rajendevadason, or via rajen@RajenDevadason.com. You may also follow him on Twitter @Rajen Devadason and on YouTube (Rajen Devadason).