The Importance Of Being SMART With Your Goals

smartgoalsI was recently reviewing my goals for 2014 to see where I’m going to finish for the year. I love setting personal and financial goals at the beginning of every year and then striving to meet them, following up with those goals throughout the course of the year to make sure I’m on track.

Although I’ve discussed goals on the site every year, I’ve never actually written about the methodology behind those goals and why it’s important.

So I’m going to share my view on how to set goals and why it’s important.

SMART Goals

I’m a firm believer in following the SMART criteria when setting and achieving goals. This is a criteria that originated with a paper in the November 1981 issue of Management ReviewΒ by George T. Doran.

There’s a lot of value in this system, as it helpsΒ anyone who applies it to formulate suitableΒ goals.

There are a few different iterations of the SMART acronym and what each letter stands for. I’ll share with you my version and how I apply it to my own personal goals.

Specific

So the first letter – S – corresponds to Specific. You want to set a goal that’s specifically achievable, rather than just generalized.

This basically speaks to the framework of the goal. What do you want to achieve? For instance, setting a goal of “making more money” isn’t very specific. It’s a very general goal.Β How much more money? Where will the extra income come from? Is the goal going to be achieved through a raise at work or debt reduction? Some combination of both?

You could walk into your boss’s office and demand a raise. If he gives you a $1/year raise, you just achieved your goal. But did that really have any effect on your ability to build wealth? No. Make sure the goal is specific or you’ll just end up spinning your wheels.

Measurable

The second letter – M – corresponds to Measurable. This means the goal must be able to be measured in some way. It should be quantifiable.

Relating to dividend income, setting a goal of achieving dividend income most certainly needs to be measurable. I set a goal at the beginning of the year to receive $5,200 in dividend income during the year. That’s measurable and quantifiable.Β I know exactly what’s necessary to attain my goal and I can easily measure my success throughout the year using hard numbers.

When setting goals, it’s extremely important that they be measurable. Otherwise, you’ll have no way to know if you achieved them or not.

Attainable

A refers to Attainable. A goalΒ should be based in reality.

It’s great to reach for the stars. I’ll never look down on someone who continually strives for the stars yet landsΒ on the moon. After all, the moon is a lot further than most people get. Conversely, reaching for the ceiling of your apartment isn’t much of a stretch.Β However, it’s important that your goals be achievable. They need to be realistic. If I were to set a goal at the beginning of the year to receive $10,000 in dividend income throughout 2014, I would have failed before I even started. It’s great to stretch yourself, but you don’t want to constantly disappoint yourself either.

You also don’t want to make your goals so difficult that you end up causing long-term harm for short-term gain. For instance, don’t chase low-quality stocks with high yields just to make a short-term goal. Make sure your goals are challenging, but attainable. If not, you’ll be constantly letting yourself down. Be hard on yourself, but not impossible. It’s good to celebrate.

Relevant

The fourth letter is R, for Relevant. Any goal you set should be results-oriented and relevant to your journey.

For instance, I could set a goal to be President of the United States by 40 years old. It’s certainly specific. ButΒ is it relevant? What does that have to do with becoming financially independent by 40? How will this goal help me achieve everything else related to my life?

Relevance is very important. I tend to keep my list of goals pretty short every year. Delving into everything and anything doesn’t help me stay focused. Relevancy is a great way to stay focused onΒ what will ultimatelyΒ propel you closer to what you really care about.

Time-bound

The final letter – T – corresponds to Time-bound. The goal should have a time limit set to it.

Relating back to my dividend income goal at the beginning of the year, I put a time limit on it. I put time limits on all of my goals, generally setting them at the beginning of the year so as to attempt to reach them by the end of the year. If I were to set a goal of receiving $5,200 in dividend income without any time stamp on it, how would I know if I’m being challenged? How would I know if I’m on pace for any larger, overarching goal? If I leisurely make my way to this goal by 2018, have I helped or hurt myself?

Being bound to a time period keeps you on task. It keeps you committed and held responsible.

Conclusion

You can see that every single goal I set at the beginning of the year is a SMART goal. Each goal is specific, measurable, attainable, relevant, and time-bound.

I first came into contact with the SMARTΒ system through my old position as a service advisor in the automotive industry. I regularly had to attend workshops related to my position, and this system was one of the few that I immediately identified with and found a lot of value in. It may sound corny, but it’s incredibly smart.

I implore anyone who regularly sets goals to abide by this system. It’s truly invaluable.

What do you think? Do you set SMART goals? Why or why not?Β 

Thanks for reading.

Photo Credit: ratch0013/FreeDigitalPhotos.net

Similar Posts

82 Comments

  1. Hey Jason,

    Great post, as usual. I just managed to hit all my 2014 goals and am in the process of coming up with our 2015 non-financial goals together with my husband. We actually just read your post together, and my husband knew about the SMART methodology already, but he just asked ‘Have you heard about the smartER methodology?’

    So, it’s the same beginning, but adds E and R which stand for ‘Exciting’, and ‘Recorded’. I think you are using SMARTER already, it’s certainly exciting for us to read your journey, and I feel your excitement, or at least great enjoyment through your writing. And of course, everything is already Recorded in the blog.

    Best Wishes for your 2015 goals!

    M

  2. We use smart targets a lot at work, mainly so we can see who has hit their targets and who hasn’t. A timely post, as always, as people look to their aims for the upcoming year.

  3. Hi Jason, Great post. Unless goals are not measured, you never know their progress and how much we have travelled at a specific point of time. Every year, I prepare a list of goals to achieve and for 2015, I’ve started working on them and posted on my blog.

    Keep it going! and Good luck for your 2015 goals.

  4. That’s a nice description behind the SMART goals. As investors, we have to have some ultimate goals, so this should be helpful to a lot of people.

    The reality is that I have not been very specific with my goals until late in 2012. I have always saved money, and put them to work in attractively valued dividend growth stocks. Building a diversified dividend portfolio, reinvesting dividends, has been the way to go. I enjoyed my process, and I think achieved a very good improvement. Since starting to set up goals however, I have found my investing to be more rushed, as I subconsciously try to achieve the goal, but might take shortcuts that are riskier for the overall portfolio. Hence, I have found that while having goals is probably ok, setting them up can be a two-edged sword.

  5. Hello DM,

    Much like yourself I was introduced to and am still required to used SMART goals to create my yearly performance objectives at work. I agree with you that the system is incredibly valuable for anyone creating goals, as it really requires a lot of thought to be put into your goals to be able to answer each question the letter within the acronym asks. I’m looking forward to seeing your 2015 goals and I’ll be using the SMART principle to create my 2015 goals for the year.

    Happy Holidays,

    Mr. Captain Cash

  6. Hey DM,

    This is a great description of the SMART goal framework. I have noticed that we as dividend investors tend to instinctively fall into that framework and set very concrete and attainable goals. It’s really a great approach and I am making sure I follow this kind of goal settings into other parts of my life. It really helps to keep you focused on what you are achieving and allows you to re-evaluate if you are doing the right things when you don’t meet your goals.

    Best,
    DividendVenture

  7. M,

    I like that! E for Exciting and R for Recorded. From my understanding, the SMART system implies that the goals are being somehow recorded/tracked. But I like the exciting qualifier. Certainly much easier to reach for and achieve goals when they’re a lot of fun along the way. πŸ™‚

    Thanks for adding that. I wish you the best with your goals as well!

    Cheers.

  8. Nicola,

    Yeah, I was in the same boat as you. We used these at work all the time, which is how I first came into contact with the system. It’s one of the few systems I found a lot of value in over the course of my years. And that’s probably because some of the systems we routinely used were specific to the job.

    Thanks for dropping by!

    Best regards.

  9. DGI,

    Right. If you set your goals up to be too demanding, that can force you to push yourself too hard to get there. That’s where shortcuts can enter in. And that’s why I mentioned in the post that it’s advisable to set realistic and achievable goals from the outset. If you’re constantly putting too much stress on yourself, it can create an environment that ends up rewarding the short term at the expense of the long term. Never a bad idea to reach for the stars, unless you end up trying so hard that you harm yourself in the process. It’s always good to have a balance there.

    Thanks for stopping by!

    Best wishes.

  10. I set SMART goals. Though for the measurable part, sometimes it’s hard to choose a realistic quantity, so I generally consider myself successful if I just exceed my baseline. And sometimes I don’t care about the quantity, I just want some, or more. I want to read some fiction and some nonfiction each year. I want to try some new recipes, including some that are savory each year. The higher the ratio of keepers, the fewer recipes I need to try.

    I do like some odd-seeming goals I’ve heard of, like the guy who wanted 100 rejection letters for his short story submissions. Of course he really wanted his work to be published, but he couldn’t control that. I don’t think you can control how many people bother to send you rejections, either, but it’s a lot more highly correlated with effort. And it’s probably a little fun to make an album of your rejection letters when each one brings you closer to your goal.

    But I also set other kinds of goals. For example, one goal I have each year is to go someplace interesting. I can’t really measure “interesting,” and that’s okay. Nor is “someplace” specific, and that’s okay, too. You don’t always know what opportunities will present themselves in time to take those into account when you’re setting up your goals.

    And I also keep track of goals for which I’m not yet ready to be time-bound. Like I wanted to learn Spanish someday, but I didn’t plan to make an official goal of it until I retired. Except then a couple of my friends told me they were going to take a Spanish class, so my boyfriend and I joined them. One semester down, three to go!

    But in general, yes, it’s good to think about whether you can make your goals fit the SMART system because when you can, that can really help.

  11. I like the additions, too. Though sometimes the exciting part is just being done. (Like I finally got my wisdom teeth out. I’m excited that this is over with!)

  12. MCC,

    I’m with you. Though I’m not technically required to use the SMART system any longer, I think it’s definitely worthwhile enough to keep around. One of the few pieces of really valuable information I came across during my career in the auto industry, especially that which could be integrated in other aspects of my life.

    Looking forward to seeing your goals. I’m excited for what 2015 will bring many of us. πŸ™‚

    Thanks for dropping by!

    Best wishes.

  13. DV,

    Agreed. I think many of us naturally end up using the general framework of the SMART system, even if it’s unintentional. And that’s probably because we’re working with numbers a lot. I think setting attainable goals is maybe what I see some struggle with. It’s great to reach as high as you can, but you don’t want to break your arm in the process.

    Best wishes!

  14. SMART goals for a smart person. This is exactly the concept behind my goals setting, albeit without the nifty acronym. When setting goals I look at projected income, savings rates, possible life events and determine a realistic expectation. From there I add a small percentage to that expectation to make sure I’m stretching things and I’m ready to go. As life goes on, I’m finding more and more areas in my life to track and set targets for, including things that didn’t exist a few years ago, like the blog. Of course that was created out of a desire to really track progress with a specific set of goals and has now blossomed into a nice passion project.

    Looking forward to finalizing my 2015 goals and enjoying the finale of a great 2014.

  15. Debbie,

    Right. Good point there. Setting goals that are within your control is also important. And that kind of falls under the “Attainable” umbrella. If it’s largely out of your control, is it attainable? I sometimes see bloggers set goals regarding a set portfolio balance they want to achieve by a certain time, and that’s arguably not a great way to go about it. You can’t really control your portfolio balance for the large part. So you might be setting yourself up for disappointment/failure, even if you mean well.

    Go someplace interesting. That’s definitely not within the SMART framework, but that’s great if it works for you. For some, that might be a new coffee shop downtown. For others, that could be Rome. So that’s tough to measure, but, again, you have to do what really works for you. I’d have a hard time setting a goal like that only because it’s so open-ended. I could set a goal that goes “Visit a new city by the end of the year”, which would be along the same lines.

    Best of luck with learning Spanish. I suck at learning new languages. It has to be something with the wiring in my brain. My soon-to-be-wife is from El Salvador and can speak three languages fluently, and she has basically given up on me. πŸ™‚

    Cheers!

  16. W2R,

    Great point there. I definitely think our goals change as we change. Typically, they grow in depth and scope. I’ll definitely be setting a goal for online income this coming year, and that’s something I didn’t even think about three years ago. Like all things, I think one gets better with goal-setting as time goes on. You start to know your strengths and weaknesses, and really get a feel for what’s challenging, but not unrealistic. And once you start to knock the easy stuff out of the park, you can crank up the difficulty dial a little bit and start to delve into new, exciting goals.

    2014 has been a great year for many of us, including yourself. It has been a watershed year for me personally, but I’m also looking forward to pushing even harder and flying even higher in 2015. πŸ™‚

    Keep up the great work!

    Best regards.

  17. Funny that you wrote about this tonight Jason! I was just thinking about my goals for 2015. I’ve set 3 smart goals for 2015.

    #1. Bring in $100/month in side income (doesn’t have to be just dividend income).
    #2. Invest a minimum of $350/month in my dividend portfolio.
    #3. Read at least 1 book a month.

    You’ve been a big inspiration to me in 2014. I look forward to reading your work in 2015. Merry Christmas and a Happy New Year to you!

  18. Hey Jason,
    Love the blog. I’ve been trying to do the dividend thing. But only with a few hundred dollars here and there. I’m so frustrated cause I’ve made the same salary for five years. About 35k a year. I bought a house in California during the housing crash, and it’s a cheap mortgage about 700 a month. And have a wife and kid. I’m 31 now.
    My question is when you first started did you ever get discouraged, and felt like the dividends were really small then it snowballed into what you have today?

  19. speaking of setting a financial goal, I mentioned one year ago this time that I didn’t fully take advantage of special dividend this year. Next year, I will be older, wiser, and fully ready for it. It seemed like I said that a couple of months ago. Well, time flies and it proves that I have been following your blog a little over a year. I made $6372.65 as of a special dividend this year on top of about 9.05% of ann. div. I was happy at first and then investors remorse sunk in. I have tried not to be too greedy. I felt like, every time I was greedy, God punished me. On the other hand, I didn’t grab the dough as much as I could knowing it was on the way. next year 2015 goal of special dividend will be $15000~20000. It is very achievable for me, cause I’m getting better at it each year passes. This time of next year, I will probably bring this up again. Merry X-mas to you Mr. Mantra and your readers.

  20. I think I ran into the SMART goals bit in school at some point, so thanks for the refresher course πŸ™‚
    My 2015 goals do and don’t quite fit into the SMART criteria, since depending on my job situation they are going to be easily reached, or somewhat difficult but still manageable. Although they definitely meet M’s ER part, as they will be super exciting to reach the goals and I’ll be avidly recording them πŸ™‚

    Cheer and have a safe and happy holiday!

  21. Hi Jason,

    I too have been exposed to the SMART methodology at work, but never considered applying it to Dividend Investing. What I’ve done historically is created a spreadsheet that estimates my income for the year, and then I just keep that number in my head for the whole year. That’s not exactly a specific goal.

    I’m going to try the goal thing for 2015. I’ll let you know how it works!

  22. I’m a big fan of SMART goals too. I still fall victim to sometimes setting these lofty and vague goals, but Mr. FW and I usually help each other rein it in and set goals that are actually attainable. The “specific” aspect is really important to me–I need to define what I hope to achieve or I’m sunk! Thanks for this reminder–perfect for end of year goal-setting πŸ™‚

  23. Hi D-mantra,

    I couldnt more than agree with the SMART mrthodology. I am already starting to shape my goals for 2015 and I will do a lot of changes in my life and will for sure apply this method. Thanks for a great blog!

    Merry Christmas and best wishes for 2015.

    Best regards,

    Eighthwonderinvesting.blogspot.com

  24. I did a nutrition course that apied smart goals with one extra piece which was significance. Knowing or having a deep underlying significance and often they are things that are very deep and personal. For example people talk about losing weight so they’re fitter and healthier but the deeper significance they keep to themselves that really fired them is because they are single, lonely and desperate to find someone they love. I think this is important for getting through the tough times when you want to quit.

  25. Henry,

    The SMART system is pretty legendary in the corporate circle, but I can also see how some have never heard of it. If I hadn’t been exposed via my job, I probably wouldn’t even know about it. But it’s pretty simple and it works really well. πŸ™‚

    Thanks for dropping by!

    Take care.

  26. Good summary of the SMART system, Jason! I’ve just set my goals for DivGro for 2015. Four of them, mostly SMART since one can argue that one of them (about physical fitness) is not relevant to dividend growth investing. Looking forward to seeing your goals, especially the one about earning online income (since that’s now your primary form of income for continuing to fund your portfolio, as I understand).

    Cheers
    FerdiS!

  27. Erik,

    Thanks for the comment. Great question there.

    First, don’t feel discouraged. This stuff takes time. Anything worth having in life is worth working hard for and waiting for. I also didn’t start this journey with a big salary, and you can see I still don’t make a lot of money. And you’ve got some pretty cheap housing going on there as well, which will help.

    I never actually felt down about things early on. I kind of always knew it would turn out as it did. I had a vision in my mind and there was nothing that was going to stop me from achieving that. And I still feel that way now. I just wrote a post not long ago about how I feel like there’s a future me that’s already financially independent, but I had that vision even back when I first started.

    You may find this post helpful, which discusses how big things come from small beginnings:

    https://www.dividendmantra.com/2014/02/the-power-of-pennies/

    Stick with it! πŸ™‚

    Best wishes.

  28. Steve,

    Great goals there! All of those will help you get to where you want to be. πŸ™‚

    The one-book-per-month goal would be tough for me. I wish I had enough time on the side to read like that, but the writing keeps me pretty busy. There’s a lot of information out there. Soak it up!

    Best regards.

  29. Excellent post. Yes, one of the best ways to get frustrated by goal setting is giving yourself such lofty goals that you’ll never be able to truly meet them. Slow and steady wins the game.

    For me, my goals are very long term – I have never felt that short term goals work all that well for me because things in life change so much. This probably also explains why I almost never set schedules or itineraries, even when I travel, because I like to play things “by ear” and simply have fun on the spur of the moment.

    My goals are significant and long term, like retiring by 40 (which is very achievable and quite measurable), making a business out of my photography hobby and earning a small income from my blog (even if it’s $40 a month, my goal has to start *somewhere*).

    Well done as always Jason. Be well through the holidays, and happy new year.

  30. Young,

    Those are some big numbers there. Not sure I totally understand what you’re saying there with the special dividends, but I wish you the best of luck with reaching your goals in 2015. πŸ™‚

    Happy Holidays!!

    Cheers.

  31. DFD,

    Great! I’m glad you found some value in the post. I think the system is tremendously helpful. It’s very simple to use and intuitive. Most of us are probably following these guidelines anyway, but it’s nice to actually sit down and think about goals in this way.

    Thanks for dropping by.

    Best regards!

  32. DW,

    It’s definitely great to have exciting goals. I think that’s really important, though I think most people that are setting goals are probably doing so because they want to achieve something…so there’s some excitement kind of built-in there. πŸ™‚

    Difficult but manageable is exactly where you want to be. You want to challenge yourself, but not make it so hard that you know you can’t get there.

    Best of luck with the goals throughout the year. Happy Holidays!!

    Take care.

  33. Mrs. FW,

    Glad you like the SMART system. I think a lot of us probably follow most of the steps automatically, but it’s nice to see how the system looks when it’s completely laid out.

    The specific part is really important. I saw a commercial the other day where a genie granted someone’s wish of “a million bucks”, and sure enough one million male deer appeared. It’s good to be specific. πŸ™‚

    Thanks for dropping by!

    Best wishes.

  34. mikeschn,

    Great! I hope the system works out for you. Give it a try for 2015 to see if it leads to any improvement. Let me know how it turns out in December. πŸ™‚

    Cheers.

  35. Ferdi,

    I just read over your goals. Very solid stuff for 2015. You’re on pace to put away some serious capital over the next year. πŸ™‚

    The personal goals are still relevant to you and who you are. After all, it wouldn’t be much fun to be financially independent if you’re unhealthy and unable to fully enjoy life. I think a goal is relevant as long as it doesn’t sidetrack you from who you are and what you want. I usually set a personal goal every year as well, mostly related around weight (as it relates to my BMI). I’m similar to Warren Buffett in that I watch my weight pretty consistently. I don’t place bets with others in the way he used to do, but I track it publicly (for glory or shame).

    Thanks for dropping by. Best of luck throughout the next year!

    Cheers.

  36. Steve,

    Absolutely. It’s great to reach for the starts, but you don’t want to constantly disappoint yourself. I think it’s best to set difficult and challenging goals, but those that are still attainable. Otherwise, you’ll never be able to celebrate. And it’s nice to have those little victories along the way. Just my experience with it.

    Retiring by 40 is a great goal. That’s my overarching long-term financial goal, which all of the annual financial goals are designed around. Though, even that is one of those goals where landing on the moon isn’t that bad – even retiring by 42 (missing the mark by two years) still puts you in rare company! πŸ™‚

    Thanks for the support. Have a great holiday season with the family.

    Best wishes.

  37. Alan,

    That’s another nice addition. A goal should definitely have significance. Otherwise, why even put a goal together in the first place?

    Appreciate the comment. Great stuff!

    Best wishes.

  38. Hi Jason,

    Thanks for the advice on goal setting. I have been procrastinating on setting my goals. With your help, I just completed them. I am so excited for 2015!

  39. DGJ,

    Exactly. I was going over my goals for the year, and it occurred to me that this would probably be a great topic to cover at this time. πŸ™‚

    Thanks for dropping by!

    Cheers.

  40. DGI,

    Five figures in dividend income next year? No. My goal for dividend income is going to be $7,000, which is right about on pace with where I thought I’d be. I was hoping to stretch it to $7,500 or so, but my cash flow right now is difficult to predict since I’m now self-employed. Plus, I now have a larger tax liability due to the self-employment SS obligations. So I think I’ll have less overall fresh capital to work with next year. Of course, that’s a trade-off I’ll gladly make if it means that I have much more time now. πŸ™‚

    Wishing you a very prosperous 2015 as well!!

    Cheers.

  41. Nice post about how to setup your goals so you have something to strife for! I just updated my blog with my goals for 2015! they are steep but well worth trying to reach them. Looking forward to your 2015 goals and how many k’s your going to skip in dividend income! Seasonal greetings to all of you! Hope to see you all again next year, Happy investing!

  42. Thanks for stopping by. I’m still working on it. I think we have the same Genesis template. I am changing colors and formatting soon; just need to figure out how to do it.

  43. Thanks for sharing the SMART system. never seen that before. I have never set too many goals in my life but a need to drive forward instead. Just one day at a time one foot in front of the other. My goals often do not have an expiry date but directions instead.

  44. DM,

    Well said. Great timing as well with the year end goal prospects for the next year that most of us are embarking on. Similarly, I do agree that goals should follow the “SMART” method to have them measurable, definable and can be achieved even when stretched.

    Thanks DM – hope you’re barely battling the weather down there in Florida… jk, I need to change this cold scene.

    -Lanny

  45. DM,
    I remember you post something similar last year? I cant remember if it had the SMART acronym, after reading your last year post I set my goal as measurable and attainable rather than subjective. This post is a refresher course for me, again thanks for another great post!
    Happy holidays!
    FFF

  46. DD,

    I just checked them out. Great set of goals. Only 800 euros per month in expenses would be pretty impressive. That’s under $1,000 per month, using the current exchange rate. Very nice!

    Wishing you the best with all of them. You’re definitely on the right track. If you hit your income and expense numbers, you’ll be saving over 50%. πŸ™‚

    Thanks for dropping by.

    Best regards.

  47. A-G,

    Nothing wrong with that. It’s difficult sometimes to quantify a “take it a day at a time” type of approach, but I say go with what works for you. I think the SMART system is effective and intuitive, but it’s certainly not the only game in town. πŸ™‚

    Cheers!

  48. Lanny,

    You’d love it down here. I spent the afternoon with Claudia at a downtown coffee shop. We were outside, people watching, because the weather was just amazing today. Somewhere around 75 degrees or so with fairly low humidity. Florida is calling your name…. πŸ™‚

    I was hoping this post was timed right. It’s that time of year when we all start to look at our goals, so I thought I’d break out a post on SMART, because I’ve never actually discussed it before. I find it weird that after almost four years of blogging there are still so many things I haven’t written about. Plenty of new content for 2015!

    Hope all is well up there.

    Best wishes.

  49. DM,

    As Lanny said, this article could not have been better timed. I’m excited to see how your apply the SMART method to your set of 2015 goals. For me personally, I think the attainable aspect is the most important of the goal setting process for every reason that you mentioned. There are probably a million different analogies I could throw in this next sentence, but I think it is extremely important to have a goal that you need to push yourself for AND you can actually attain. In my goal setting process, I could have shot for $3,000 of annual dividend income just because I wanted to reach a round number; however, with my curent situation and the current average yield of my portfolio, it just would have been too far out of reach (Unless of course I alter my investing strategy and invest strictly for yield, which is not going to happen). Instead, I set the goal for $2,750. Will it be tough…HECK YEAH… but you know what, I know that if I am disciplined with my savings and invest smartly/efficiently, I can hit that goal in my current situation.

    Best of luckin the goal setting process. I am very excited to see what you have in store this month. Also, I read your follow up comment to Lanny…you have no idea how jealous I am that you were walking around in 75 degree weather today. I’ll make sure to remember that as I am brushing the snow off of my car in the morning!

    Bert

  50. FFF,

    I’ve never posted specifically about the SMART system before. I probably mentioned my desire to set attainable or measurable goals in one of the posts related to my goals for the year, and that’s because I’ve long followed this system. I thought it finally deserved its own post, however. Especially with it being that time of year. πŸ™‚

    Appreciate the support. Wishing you the best throughout 2015!

    Cheers.

  51. Bert,

    I know how you feel, bud. I remember waking up at 5 a.m. to warm my car up and scrape the ice off of my windshield before my hour-long commute to the dealership. Not fun. But we do what we gotta do. πŸ™‚

    You’ve had a great 2014. And what’s great about this strategy is that the success builds upon itself. So every year becomes a watershed year in its own right, further propelling you closer and closer to your ultimate goal.

    Keep up the great work!

    Best wishes.

  52. Jason,

    Your post takes me back a couple of years to university, where they almost clubbed me to death with the SMART principle. Over time I’ve found that it’s actually by far the best way to make arrangements with other people or define your own goals.

    That’s why I’m also using it to try and define my goals for 2015. The hardest part for me is define realistic objectives. Since I’m new to dividend growth investing it’s not always easy to take everything into account that could accelerate or hamper my progress.

    Practice makes perfect, I guess!

    Looking forward to your 2015 goals,
    Happy holidays, pal!
    NMW

  53. Great Article! My main problem with setting goals is that I procrastinate to much when setting them, so I end up partially into whatever I am working towards before I set them. This isn’t necessarily bad, if I can make steady progress it could help me end up with a more realistic goal and reach higher than the ceiling =) However, it would be much better to have goals and a clear objective prior to beginning something. So I my goal is to have my 2015 goals determined and published by Dec 31st!

    Take care and Happy Holidays!

  54. Yeah, I understand Self Employment income is unpredictable. I was thinking more in terms of estimated dividend income. I think you may be close to 5 figures in estimated dividend income by the end of 2015.

    My comment stems from the fact that most others have some money in an old 401K/IRA, which they can one day convert to a pile of dividend growth stocks ( i did some of that in 2013). I read somewhere that someone had a pension ( very rare these days), and they elected to get the lump-sum amount. After reading your site however, I doubt you have some extra $ you probably forgot about.

    Also, have you thought about opening a Solo 401K?

  55. Great article! I try to make my goals measurable and attainable. It’s a wonderful feeling to accomplish a goal. Now I have a whole acronym to follow. Super helpful.

    One of my goals for next year is to invest more consistently. I like to claim that I don’t time the market, but I realized that I do. Waiting for prices to drop that never do. Lengthy gaps between buys. Worrying about when/if the market will drop. In 2015, I’m going to focus more on the quality of the company than the price of the stock. (Though I will still take price into consideration somewhat.) In SMART terms, my goal will be to purchase stock once a month.

    I’m really happy that I found your blog this year. Enjoy wearing shorts and a T-shirt on Christmas!

  56. Yes! Completely on board with SMART goals. I make them every year. Well most of my goals at smart I’m still afflicted with making general goals also.

    Actually I was going to publish an article just on this yesterday but something happened to us on Sat so I will be posting it tomorrow

    Mine was more focus on reviewing my goals but I also wanted to cover the methodology at the end but I think I’ll just link to your post. It covers everything.

    I think I always make too many. I think I’m also going to start in incorporating quarterly goals to break up the load

  57. NMW,

    I hear you. They clubbed me over the head with it too, back when I worked in the auto industry. I think there were three courses on the subject, when it really takes about an hour to really go over all of the particulars.

    It’s indeed tough to set realistic goals in the beginning because you’re not sure exactly how things are going to go. I remember setting a goal for $1,200 in dividend income for 2011, and I just barely got there. It gets easier as time goes on. In the end, you want to be true to your long-term plan. If you reverse engineer your way to where you want to eventually be, it should be relatively easy to know where the breadcrumb markers should be along the way. πŸ™‚

    Happy Holidays to you as well!

    Cheers.

  58. ILG,

    A goal to have the goals ready before the end of the year. I like it! πŸ™‚

    It’s easy to procrastinate with this stuff, just like with anything else. But I think once you set goals early and see firsthand how they can challenge you to improve your life, it’s exciting to get them sorted out ASAP.

    Thanks for dropping by!

    Best regards.

  59. DGI,

    Ahh, gotcha. I also doubt my forward estimated dividend income will be anywhere near $10,000 by the end of 2015. That would require a ~$4,000 jump YOY. This is impossible for me, even if I really knock it out of the park with the online income. πŸ™‚

    I haven’t thought about opening a solo 401(k) or SEP IRA. Whereas before I maybe could have diverted some excess capital toward a retirement plan and still ended up getting to where I want to be by 40, my resources are even more constrained now. I think I might be leaving some money on the table by not pursuing a tax-advantaged account, but I don’t think I’m leaving any time on the table. And that’s really what I’m after. If it was all about the money for me, I could have just stayed in the auto industry. But I’d much rather have time than money, and doing what I’m doing has been good to me thus far.

    I remember you saying your goal for FI/early retirement is 2018. Are you on pace for that? Only three years away now. That’s quite exciting.

    Thanks for dropping by!

    Best wishes.

  60. Phil,

    Glad you enjoyed the post. Not the most exciting topic in the world, but I think it’s important to understand how this framework works within the bigger picture. πŸ™‚

    Consistency is the name of the game, my friend. Trying to time the market is a fool’s errand, in my opinion. But the good news is that a consistent investor will inevitably catch some of the lows anyway. It’s not about not focusing on quality or valuation, but rather not focusing on the broader stock market.

    Appreciate the support. Wishing you the best of luck with setting some great goals and then knocking them out of the park in 2015! πŸ™‚

    Cheers.

  61. The Roamer,

    I don’t think you’re alone in setting a big list of goals. Nothing inherently wrong with that if you can focus on all of those goals. But I find that time and attention are both limited, and there’s an opportunity cost there. Every one thing you focus on is one less thing you can focus on elsewhere. I like to really hone in on what matters and concentrate my energy and attention there. πŸ™‚

    Best of luck with the 2015 goals – both setting and achieving them. And sorry to hear about the car accident. Glad everyone is okay!

    Thanks for the support.

    Take care.

  62. I think I will be on track to meet my personal annual expenses from dividend income around 2018. Could be a little early, could be a little late. Of course the caveat is that things can happen – loss of income, lack of quality investment opportunities, or if I do something stupid. On the positive side, if we get a bear market and I have money to put to work, that would be really really nice.

    The other thing that could throw me off, or help me, is my personal situation (relationships etc). I am saving for myself, but I don’t know if I will be able to provide fully for a second person or a family member. But that conversation is not for here πŸ˜‰ ( is Relationshipmantra.com taken πŸ˜‰ )

    What I’m saying is that I evolve over time, and have different expectations of life at different ages. I also had a different view and options 10 years ago, 5 years ago, and today. So that’s something I don’t know if I have accounted for completely. But yes, I should be able to exceed expenses around that timeframe 2018, for myself.

  63. Jason,

    I’ve been traveling a lot this month for the holidays and haven’t been in touch as much as I’d like. I wanted to chime in and congratulate you on all of the purchases, sales, and awesome articles these past few weeks! This was another fine post and I hadn’t heart about SMART goals before, so I can’t wait to implement them. You killed it this year and I’ll never be able to properly communicate how much your blog has meant for me personally and financially, so endless ‘thank you’s’ to you! Keep up the great work in 2015 and I’ll remain among your biggest fans and supporters and I’m looking forward to your continued full time writing and making the internet a better place! Happiest of holidays to you, Claudia, and the rest of your family’s!

    All my best,
    Ryan

  64. DGI,

    I hear you on the relationship side of things. While it’s wonderful to have someone by your side, it can also make planning more difficult.

    I actually decided to “interview” my significant other over the last couple of days and I’ll be publishing the results here this evening. So that should make for an interesting perspective from someone on the other side of things. Sometimes we get so wrapped up in this stuff that we forget how it may affect others, for better or worse.

    It’s good to evolve over time. We grow, learn, and change. Generally, it’s for the better. I mentioned before that I’ll probably have to account for Claudia by covering some of her shortfall down the road so she can also stay at home more. That’s something I didn’t plan for back in 2010, but it’s also something I wouldn’t change. The good news is that by being so aggressive from the outset, that even missing your mark by a year or two still puts you in a wonderful position. For instance, even if I can’t cover my expenses until, say, 42 years old via dividend income, that’s still much earlier in life than most people.

    Cheers!

  65. Ryan,

    Thank you as well. I couldn’t do what I do without readers/supporters like yourself. So you make it all possible for me. I simply do my best to live up to my end of the bargain by putting out the best content I can. πŸ™‚

    Congratulations on all of your success throughout 2014. You’ve absolutely killed it over there with how much capital you put to work. That sets you up for an even better 2015 now that the dividend income provides some additional capital to you all by itself. What’s amazing is that even if you never invested another dollar for the rest of your life, you’d be sitting on a great portfolio at a traditional retirement age. That’s the power of starting early and being aggressive. It just gets easier from here.

    Thanks again. Hope you’re able to spend some time with family and enjoy the holidays! πŸ™‚

    Best wishes.

  66. My work uses SMART goals for our yearly performance evaluations so they have really pounded SMART into our heads and at first I really didn’t like SMART but as I have gotten used to it I find myself bring SMART concepts into my personal goals. I have already modified some of my 2014 goals for 2015 due to issues with my goals not being specific or measurable.

  67. Nick,

    I know exactly how you feel. I didn’t particularly like the SMART system right away because it was kind of forced on me. But then I realized I was being kind of ignorant, because it’s a great system that translates really well to what I’m now doing. The framework is excellent.

    Best of luck with your 2015 goals! πŸ™‚

    Cheers.

  68. “Someplace interesting” does generally mean a new city. But I think once it ended up meaning taking a music cruise where the ship was the interesting part and where the ports weren’t all that fun. Still, what counts? Towns I regularly drive through on my way elsewhere sort of count, depending on how fun they turn out. Yeah, not SMART at all. But works for me.

    I suck at learning new languages, too. But one thing I’ve learned is that I like the phrase “slow learner.” I can still learn foreign languages; it just takes me longer than regular people. So you don’t have to give up if you don’t want to. (I’m not actually good at Spanish yet, but I have become reasonably good (“intermediate”) at ballroom dancing, something where my natural tendency is to do everything wrong and have to be corrected. Multiple times. Fortunately, I found a group teacher who speaks in a language I understand–physics.)

    Since Claudia speaks English quite well, you’re good there! And you can focus your efforts on whatever seems most productive and fun.

  69. Pingback: My Two Goals For 2015 | Grow Independent
  70. Pingback: Cash Accumulators 2015 Season Objectives Are Announced! | Mr. Captain Cash
  71. I’ve heard of SMART back in college when our gym teacher would make us set realistic and challenging goals to improve our fitness. This can also be applied to other areas of our lives πŸ™‚

    Thanks for this post!

Leave a Reply