In our first blog, I wrote a story about the parent of a child wondering whether a Kindergarten curriculum is likely to have greater success getting their child into Harvard or Dartmouth. While the question was fairly ridiculous, in some ways it showed a thought process. The parent has a goal and wants to take the necessary steps to attain that goal. So while the parent has done things incorrectly in understanding the measures needed to attain that goal, what have they done right?
The first thing is that he has defined his goal and done so quite specifically. Let us assume (since from his question, we do not actually know) that his goal is to get his child into Harvard or Yale. It is a very specific goal. It is well defined.
Next, what are the steps required to get to that goal? First, (in this parent's opinion) is getting his child into the best elementary school program possible. He is doing his research on all the schools available, visiting them and asking as many questions as he can to make th most informed decision on where to educate his child. Over time, he is likely monitoring his child's ability, providing her with further educational enrichment and monitoring progress. At certain points, he may look at how attainable his goal is and make adjustments to increase the likelihood of his child's acceptance into one of the two colleges.
Aside from the fact that he may make his child miserable, the process has no way to measure likelihood of success since the admissions decision at the end of the process is a binary yes/no proposition. However, we can draw parallels to financial and retirement planning process.
In planning their financial lives, so many people fail to consider what their goals really are. People list amorphous goals like a comfortable retirement or having money to pay for college. But in order to have success, they need to have an idea of what it will take to get there.
The goal seeking process is several steps:
1. Define the goal(s). You can't know how to get there, if you don't know where you're going.
2. Quantify the goal(s). It is also part of defining goals, but you need to know about how much money you need to achieve the goals you've set.
3. Establish the path to your goals. Now that you know where you are trying to go, you need to map the path to try to get there. What money do you have? How much money do you need to save to reach that goal? How much risk are you willing to take to get to your goal? How likely is it that you reach that goal given your circumstances? All of these questions need to be answered in getting where you want to go. But as you can imagine, getting the answers to these questions can be a time consuming task.
4. Periodic re-evaluation. As time passes, circumstances change. People get sick. People get promoted. You want construction on your home. All of these are reasons to re-evaluate your goals and your path for reaching them. However, even if none of these large changes occur, you should still re-evaluate your goals from time to time. Perhaps your goal is more or less attainable, or you add a new goal. All of these things happen.
For the dad in our story, things may not always go according to plan. His child may not get into his number one choice school. Our lives might not always go the way we want them to either. But as we all know, when it comes to reaching a destination, there is more than one path to get there.