1. There is not just one finish line, there are multiple goals to be achieved during a lifetime, and you’ll be simultaneously running for all of them.
And 2. The life goals, unlike the finish line, they aren’t constant, as you move towards them they’ll drift a little further, not necessary in the north.
So, resting on the above attributes, we arrive at: Goal Setting is not a once in a lifetime process. It is an ongoing affair, you need to revisit and review them time and again.
Having said this, why aren’t our goals fixed? why do we need to revisit them repeatedly?, often comes into the investor’s mind. So the following paragraphs will explain the reasoning behind the constant motion in your goals.
Firstly, your lifestyle exercises a significant impact on your goals. Let’s assume, you are working in a junior management grade in a company, and you feel Rs 1 crore will be enough to meet your lifestyle needs post your retirement, and you invest accordingly. After some time, you get promoted to a middle management grade, so now with an increase in your income your lifestyle will also upgrade, and to maintain this upgraded lifestyle after your retirement, Rs 1 crore may not suffice. This concept is not just applicable to an increase in your daily living expenses, it is also applicable to the size of your other dreams, they will also move in conjunction with your income. The dream of owning a basic hatchback will transform into a dream of owning a comforting sedan, the dream of a Kashmir vacation will translate to a Dubai vacation, and the like.
Secondly, there can be a change in your footing which may require you to modify your goals. There may be goals which were paramount for you earlier, but now they’ve lost their meaning, so they need to be put off the table. For example, five years ago, your sole aim in life was to own a Harley Davidson and you were passionately saving for actualizing your dream. But recently you had to undergo a major knee replacement surgery, and you have to take the back seat now. So, the goal has lost its significance. Conversely, a variation in your position may require you to elevate or alter your goals too. Let’s say you wanted to stay ahead in the race and you started planning for your kid’s education while your wife was pregnant, but things didn’t move as planned, and she delivered twins, so now you need to account for the second kid too while planning for the kids’ education.
Thirdly, Inflation is the villain which pushes your goals away, away from your reach. It is because of inflation, that you have to run faster and sweat extra to reach your target. In our previous example, Rs 1 crore was enough for the investor to enable him meet his post retirement needs “today”, but not 10 years ahead when his retirement approaches. Assuming an average rate of inflation of 6%, his retirement corpus requirement to maintain his “present standard of living” will be Rs 1.8 crores after 10 years.
The fluctuations in our life goals are a product of the above factors. These changes are inevitable, and hence we need to keep on incorporating these changes into our goals and make the necessary modifications in our financial plan. If you do not keep revisiting and modifying your goals, you would be moving in a random direction which may or may not be leading you towards your targets.
To conclude, this marathon called life is really long, the number of laps are endless, the targets are many and are constantly evolving. So if you want to win the race, you have to be fast, run at a speed higher than the speed of the goals, you have to be flexible, align your direction with the direction of the targets, and you need to be attentive to the change throughout the run.