Most, if not all, financial professionals agree that the leading reason for financial failure is just simply not having any financial goals. Or, if they do have goals, they are totally unrealistic.

Like the song says, “Wanna be a Billionaire, So Freakin Bad.” But the road to a healthy financial lifestyle is more like taking a road trip. It requires you to sit down, build a realistic road-trip, and not a trip to Mars. For example: if you’re using Google Maps, the first question is: “choose a destination.” That’s even way, way before you get the best route to get you from point A to point B. The first thing you need to do is set those destinations, and those destinations are going to represent your goals and objectives.

People Fail Financially because they do not set Goals.

In general, most people fail financially because they do not define their financial destinations. What commonly occurs is “it’s all go go go in life” and then suddenly you run out of cash, then run up a bunch of credit cards bills until you can’t breathe anymore. And then you start thinking about making a budget or finding another job that helps pay off those credit cards.

Some folks start thinking, I don’t need to work harder, I’ll just start complaining to the boss, start slacking off on the job, and then ask for a pow-wow with the boss — with the strategy “if you pay me more, I will work harder.” Personally, as an employer, I loved that line! And my answer to this not-very-smart employee, who was trying to outsmart the boss, was really simple: “If you weren’t giving me 110% to begin with, you don’t deserve anything! Get back to work!” Think it doesn’t happen? I made that speech 10 times every year!

Who is Your Opponent?

Still having financial pressure? “The Opponent Can Arrive.” (The opponent is your ego.) I like to think of The Opponent as Darth Vader from the Dark Side. The Dark Side kicks in, and you start thinking about stealing, selling drugs, or doing some other criminal act to get what you need. Let’s get real serious here, no bullshit, most of you are probably in custody for just that reason. Without planning and living beyond your means, life eventually catches up, and you make poor decisions. In a lot of cases, all of this mess could have been avoided in the first place, simply by thinking about your financial destination in advance.

One more classic example of not thinking about financial issues in advance that happens to so many is what I call Tax Bite. Your tax return is due, and you “Ouch!” owe money, and now you start thinking of ways to reduce taxes. You don’t lower taxes at the end of the year, you reduce taxes by planning it out from the beginning of the year or even sooner than that. Reactivity in the real world just doesn’t work. You need to establish realistic goals and objectives proactively in advance. “It’s not that financial plans fail, it’s that people fail to plan!” And way before even having a plan, you need a destination to begin the process.

You make Travel Plans, why not Financial Plans?

This is an essential concept worthy of an example because people put a lot of time into making travel plans and zero time when it comes to making financial plans. I’m thinking the reason is that it is a lot more fun to plan a trip than think about money. Regardless, let’s look at an example: Let’s say we are in Los Angeles, and we are planning to take a trip to San Francisco. First things first. We now have a destination: San Francisco is our goal. We can now move on to establishing the next step: our current status. How many people will be traveling? How much money do we have to spend? And how long do we plan on staying? These answers are our current status.

With those ingredients, we can now develop the plan. We can now decide on the vehicle we should use: Auto, Truck, Van, Bus, Plane or Boat. We can decide on what route you want to take: West-Coast Waterway, Pacific Coast Highway, The 5 Freeway, The 101 Freeway, Long Beach Airport, LAX, or other airports.

Let’s drive!

If driving, we can choose to drive at very high speed, get there really fast, and take a lot of risks. Or we can be too safe and drive real slow and take forever to get there. Or we can find the sweet spot in the middle, the speed that gets us there most efficiently, safely, and on time. We want the sweet spot, and the planning process does just that. Because the same logic can be applied to obtaining financial goals and objectives, and if we are a little lucky in this process, maybe, just maybe, you can find planning your financial success even more enjoyable than taking a trip to San Francisco.

Think about this, how crazy would it be if we just got in the car and just drove? We’d spend a lot of gas and time going nowhere. Or what about planning a trip to Mars? This kind of thinking has to stop right now. A good portion of my work is dedicated to helping you create, define, and think about realistic financial and non-financial goals and objectives. Those goals and objectives are your destination. Once you have that destination, you can start the process of figuring out how to get there, but without it, you’re just going nowhere.

Determining realistic goals and objectives is the most important step to reaching your destinations. Start asking yourself, “What are your financial goals?” Write them down. We will be exploring them in detail a bit later.