Goal Vs Financial Goal-How I achieved financial goal, but failed to achieve my real goal
It sounds strange that I am able to achieve my financial goal, but not able to achieve my goal which is linked to that. I created a goal 2 years back. I defined my goal to be SMART. I separated out financial goal from that. I achieved financial goal, but failed to achieve my real goal. I would detail about the lessons I learnt in this entire process.
What was my goal?
I planned my goal to be SMART. Specific, Measurable, Attainable, Realistic and Timely. My goal was to buy an independent house at specific location at Hyderabad for Rs X amount by Y Date. This goal was specific, easy to measure, attainable, realistic and achievable with in specific date (with some effort and planning). I have been reviewing and tracking this all along.
What was my financial goal?
I separated my goal into two sections, one was finance section and others section. My financial goal was to accumulate X Amount by Y Date. I have been monitoring this seriously and was able to achieve this financial goal 1 month ahead of time.
Well, where is the disconnect?
When I achieved my financial goal, I realized that I have kept other factors out of my radar. When I planned to achieve my goal, I wanted to achieve finance portion which includes 10% buffer. Means I kept a 10% buffer for correction in real estate prices which never happened until 6 months back. Now the real estate prices just zoomed by 30% to 50% in the location where I wanted to buy which disappointed me.
4 things to be noted when you link Goal and Financial goals
Though I have implemented some of them, but failed to include a few, I would list down the points when you intend to achieve a goal.
- Link your goal with financial goal.
- Review, modify your goal and financial goals on periodic basis.
- Consider buffer amount of 10% to 20% in your financial goal so that you can achieve your goal smoothly.
- Consider additional risks that are on the way in achieving your goal. This could modify your financial goal and time. E.g. There were two main reasons for increase in real estate prices. 1) Govt has increased the Govt. valuation rates for residential and commercial lands in Hyderabad from Apr-13. 2) Another reason was about Metro rail work being started more than 9 months to 1 year back. I failed to consider when I reviewed my goal periodically during the last 6 months.
- If you have any additional risks like I mentioned above, you should quickly look for alternative solutions. In my case, buying a residential plot little early would have avoided such damage. Later, once you have money, you can always proceed and construct the house. I agree that construction of a house would be little painful.
Conclusion : While I would not say that I failed in achieving this goal but my goal would get delayed for 6 months to 1 year more. I thought it would be good to share with you people so that you can link goal and financial goal and consider additional risks involved in achieving them.
Readers, do you have any experience in linking goal and financial goals? Have you faced any such risks? How you have mitigated them?
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Goal Vs Financial Goal-How I achieved financial goal, but failed to achieve goal
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