Make yourself a map

Warwickshire Life
September 2008
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Planning years ahead is a foreign concept for many of us. It feels rigid, unrealistic and uncomfortably like tempting fate. But study after study shows that a written plan is the most effective way to reach your desired objectives. Just take a look at the Yale Class of 1953. A set of researchers surveyed Yale’s graduating seniors to establish how many of them had written down their goals for the future, finding that only 3% had. Twenty years later, the researchers revisited the Class of 1953 and found that the 3% had accumulated more personal financial wealth that the remaining 97% combined...

And consider this. We work hard to establish good futures for ourselves and our families. And we want to protect those futures and ensure that our lives’ work benefits those we will eventually leave behind. So, most of us do actually compose a written plan of some sorts. We pull together a planned structure for how our wealth and assets should be managed, to be actioned after we die. After all, your last will and testament is just a written plan for when you are dead. And when you look at it like that it seems ludicrous that you wouldn’t put one in place for financial management whilst you are still around to enjoy the fruits of your labour, and of course, see your family enjoy them too.

Effective goal setting performs two chief functions. Firstly, as the Yale example shows, it makes your objectives more likely to materialise. Essentially, planning something effectively makes it more likely to happen. And secondly, it gives you a new enthusiasm for your business, your career or your personal finance. Climbing towards an ideal such as ‘sell my company for £4m’, ‘make enough money to retire’ or ‘raise enough to start my own business’ can seem like an insurmountable challenge unless you work out where the rest stops and progress markers are along the way. Just knowing that you have planned your progress can revitalize you and give you a real sense of purpose. You wouldn’t get in a car and try to navigate to a new destination without a map, so don’t try to pursue a goal without mapping the way.

But of course, all of that doesn’t detract from the fact that planning can seem like an intangible, neverending task. How far should you allow yourself to plan ahead? To what degree can you predict what lies ahead and how it will affect your financial management? We advise clients to start with five years. Most of us have a vague idea of what we want to be, have or do in five years time. And if you have trouble pinpointing that, then imagine this. A dark room, full of hushed, subdued people. Not just any people, but your friends, your family, your colleagues. In fact, anyone you’ve ever known. You’re in a box at one end of the room - dead. Everyone’s talking about you. What are those people saying? How do they feel about you and what you accomplished during your lifetime? Imagining what you would like people to say should give you a real sense of purpose.

So, once you have established what it is you want to achieve, the next step is to plan where you would need to be in three years time if you were well on track to meeting your goal. And where would you need to be in a year? Then, where would you need to be in 90 days time if you were going to hit the one year benchmark? What about in a month’s time? So, what do you need to do this week? And suddenly, you have embarked upon a plotted route to success.

When we talk to businesses looking to expand or grow we apply similar principles. We ask them what an ideal Profit & Loss statement would look like. We get under the skin of what success looks like to that company and then we compare that vision to the reality. Very quickly, the company’s goals and benchmarks become apparent. This process identifies the current situation, the ideal situation and the route required to bring the two closer. I’ve seen business owners who previously felt trapped in the clutches of the monster they created and unsure of how to get back the thrill of the challenge, suddenly revitalized and hungry for their objectives again once they establish exactly what they are.

And finally, whether your plan is personal or commercial, one of the most important things to remember is to continually check you are on track. Using the map analogy again, imagine you are setting off on that new car journey. You’ve got your route in print, you’ve studied the map and you know where you’re going. But you don’t simply stash the map in the glove compartment and go with what you vaguely remember. Rather, you would refer back, check you are on the right route, and remember some crucial checkpoints to benchmark your progress. If you can apply the same logic to a carefully-crafted, formally-structured and inspiring plan for your goals in life you will have mastered the art of effective goal setting. And the results will be impressive, if not surprising – because of course, it’s what you planned all along.

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