Plan to Achieve Your Dreams

Plan to Achieve Your Dreams

Ultimately your accomplishments and actions come from decisions that your brain makes. How these decisions are made are based on input and what is done with this input. We're very good at making short-term decisions on the spot, and in many cases these decisions can occur without conscious thought. Where we struggle is the longer-term.

Thinking long-term reqires deciding what's important, setting goals, building a plan to reach the goals, and executing it. It's not a difficult concept, but it does require actually sitting down and facing your situation head-on, and taking the time to work things out. It can also be irrationally frightening, and it's easier to shy way from this discomfort and consume yourself mentally with all the ultimately insignificant but urgent tasks of everyday life.  You end up washing dishes instead of seriously sitting down to plan out your personal life, your business, or your career. This fear is touched on in many books on the topic of goals and achieving new things in your life, and it's something I'd like to expand on in a future post.

The Fear of the Unknown

It comes down to the fear of the unknown. Think that you got over your fear of the dark as a child? For many people that statement may be true on the surface, but really all that has happened is the definition of dark has gone from being the "absence of information about our physical surroundings" to "the absence of information about the future". This one single fear is what makes it so easy and comforting to stay in a "predictable" rut instead of exploring and experiencing something new. A friend once told me that it's safer to put up with the familiar and known problems than it is to try something else that might bring on worst problems. This is a form of mental paralysis – "I don't really like my present state, but there might be bad things out there if I try to change it so I'll stand here and not move". Allowing yourself to get stuck in this paralysis is not just going to prevent you from achieving your dreams, but it will also take away the very control that it purports to be providing you. You will simply sit there riding the tide of good and bad and be unable to change your future.

The Stories of Jim and Bob

Let's take the area of financial planning as an example of why avoiding mental paralysis is important, and see how fictional characters Jim and Bob fair. Jim and Bob are both white collar workers in their early forties with typical office jobs, earning an average salary and living an average life. Bob has always been afraid to try new things and prefers to follow the well-travelled path that society points him in. Not a failure by any means, Bob successfully puts food on the table for his family, enjoys a vacation in Florida once a year, and owns a big screen TV that his buddies come over to watch the game on. Jim is a lot like Bob, and if they ever met it would be easy to mistake them as twins. Jim isn't exactly an entrepreneur either, prefering the stability of the 9-5 life and the time it affords him to work on hobbies like fixing up that old car in the garage. "Leave starting a business to those who want to die of a heart attack when their forty" he always says. Despite this philosophy, Jim very much believes in taking control of his circumstances.

Jim and Bob: The Early Years

One day while in his twenties Jim took a bit of time to consider his future. He picked up the excellent book, The Wealthy Barber, and began reading. You might think that while Jim was doing this Bob was at a hot party or studying for a test that would help get him that important degree and a higher salary. Actually Bob was sitting around on the couch like many of us do at times, bored out of his mind and watching some show about the lives of rich celebrities. Jim wasn't sacrificing having a good time or getting good grades, he was just making use of some idle item.

Jim learned the basics of financial planning from his reading, including important concepts like saving 10% of your income every month, and paying yourself first to ensure that this money is actually saved. He learned what kind of insurance he needed, how to invest his savings to generate a 10% return, and the power of compound interest. Although none of his peers were doing it, and his parents hadn't really done so either, Jim decided that he was going to apply the things he learned and save for the future. He sat down and determined his financial goals, then worked out a simple plan based on what he had done. By doing this he was unleashing tremendous potential and guaranteeing that he would one day become a millionaire. He refused to let listen to his mind trying to convince him that he might actually lose that money, or that he needs that extra 10% to keep up with his friends and their latest gadgets. Most importantly he refused to allow himself to be intimidated by the idea that a little bit of brain work and planning was capable of generating the wealth that eludes millions of lottery playing people.

Satisfied that he had just changed the entire course of his life in a few hours, Jim went to the same party that Bob did, unbeknownst to them both. They were just two university kids having fun, and both had a great night.

Jim and Bob: The Middle Years

Fast forward to today. Bob is walking around the kitchen complaining to his wife about the major tuition hike that has just hit the headlines. "How am I supposed to be able to afford this? I have two kids going to university, and even if they both get part-time jobs money is going to be very tight. With the car needing major repairs we'll have to forget about that vacation this year". Things aren't looking very rosy for Bob. In addition to the financial problems he has on his mind right now, Bob is also carrying several thousand dollars in credit card debt that he has been paying the minimum payment on for years. To him it has just been another bill, and he's always been able to afford it. Nevermind that he's paying more in interest than his original purchase amount, Bob just doesn't "think of things that way".

Coincidently Jim also has two kids and a broken car. Unlike Bob, Jim always pays off his credit cards immediately, shaking his head at the interest rate some people are willing to pay to avoid having to deal with their financials. He's not against borrowing for the right purpose however. In fact he has borrowed some money to finance renovations recently, but he's obtained a low interest line of credit for this purpose and his monthly payments are large enough to pay it off completely before he has paid too much in interest charges. Jim started saving for his kids education early and had factored in the rising cost of tuition. He had no problems financing their education, although this money came with certain conditions to avoid spoiling his children too much. The car repairs were an unfortunate part of life, and his emergency fund took care of them. While the car was in the garage, Jim and his family were happily on a plane for an extra special week of fun in the tropics to celebrate the acceptance of his children into university.

Jim and Bob: Retirement

Fast-forward to retirement day. It's a very emotional time for both Jim and Bob, and on the surface they are again very similiar people. Two hard-working employees finally getting their just rewards for their work and throwing a little party to celebrate. Once the celebrations are over and things have settled down, the reality of their situations shows its face.

Jim's first move is to go on a trip around the world for a year. That sure was a great time! He has also always wanted a cottage of his own, and having barely stepped off the plane a year later he goes ahead and buys one. He has a lot of free time now so he joins many organizations and learns many new things. It all costs money, but Jim has enough saved up to live off the interest even if he gets to be really old. In fact his disposable income is now much higher than it was when he had a job. All thanks to the simple actions he began over forty years ago.

Bob is having a tough time of it. He had always assumed that his pension payments were going to guarantee him a proper retirement income and that he had little to worry. Sure, as he began to approach retirement age he had started saving some more, but the meager amounts that he was able to scrap up barely counted for anything at all with no time to reap the benefits of compound interest fully. When his pension cheque came, he was devasted at the highly reduced income he now had. Sure he had a lot of free time, but he barely had the money to live, much less travel or golf or any of the things that he had always dreamed he would do. Despite having had a successful career and following the path that he was "supposed to", Bob ended up working hard all his life and having a miserable retirement to show for it.

So what's the Point?

Jim and Bob didn't start off any different in life. Jim hadn't inherited any money and didn't receive anymore financial assistance from his parents than Bob did. Jim also didn't earn more money than Bob or win the lottery. He didn't chose a lesser lifestyle lifestyle than Bob did, but Jim was isolated against external problems thanks to diligent planning. Meanwhile Bob, who lived in his happy safe rut, found himself knocked over everytime the wind blew. He had lost the control that living a familiar life had promised him. 

It doesn't take a whole lot to become Jim, but it takes even less to be a Bob. The Wealthy Barber is a highly acclaimed starting point for dealing with financial planning and a book that has changed the way I look at my finances. However there are many more aspects in life where planning is critical, and each of them must be addressed. The more goals that you set, and the more plans you develop for meeting those goals, the more you will grow and the more dreams you will achieve. In fact a dream is the starting point of a goal, and if left as a dream it can only be achieved by accident. Instead of lounging around bored and wishing your life had more excitement, sit down and figure out what you want, and how you'll get it. Everything else on the way from point A to point B is then just trivial details.

Great Resources I've Found on Topic:

  • Technorati Goal Setting tag. Blogs are always an amazing resource.
  • Steve Pavlina has incredible amounts of material as its one of his passions, and you should read as much there as you can. I think this is a great starting article, because while short on concrete advice, it drives home the difference between somebody afraid to steer off the beaten path and someone willing to take the risk of being remarkable.
  • The Wealthy Barber I can't plug this book enough.
  • Stories of successful people. Find people you admire, find out how they got started. Universities have countless speaker events, and a good speaker is worth the hour and far more.

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