Coming from a background of finance I feel it is imperative that everyone sets financial goals, especially in the area of saving for retirement. However, I also have a large competitive streak which no doubt comes from years of competing in multiple sports throughout my life. What I have learned from this competitiveness is that goals are one thing, but striving to surpass them is another and is something that should be harnessed not ignored.
Learning from My Clients
When I was a financial advisor I was always amazed how many of my clients would simply stop their investing interaction once the retirement goals they set forth were met. I would always inquire as to why they slowed their actions and more times than not it was, sure enough, the fact that they had saved what they set out to save. What they didn’t seem to realize is that it was okay, and actually beneficial, to surpass those goals.
How I Meet then Beat
The biggest thing for me is that I loathe failure. So, when I set out to make any type of financial goal I do so according to what I feel is just above expected. In other words, I don’t set out to save $1 million in 30 days as that simply isn’t realistic in my world. I will however take what is realistic, say saving $500 in a month towards retirement, and then add a little bit on top of that. So I know I can easily save the $500 and by adding an extra $100 I make the retirement goal more challenging to achieve.
But I don’t stop there. Should I reach the initial goal of $600 for the month I’ll try to save more. Even if it’s only another $20, I know the more I save the better. I also know that saving the extra $20 will do better for me and my family in the long run versus spending it.
Training for Retirement
When I was in heavy competition for any sport a large part of that was training. While I trained I always had a certain amount of something I had to accomplish. Run ten laps, do ten reps of 45 pounds or what have you. But I always made my biggest strides when I pushed past my initial training goals. So, maybe I’d run 12 laps or up that weight to 50 pounds. The harder I pushed myself the better the results.
Now that my ultimate goal is saving enough money to retire on I look at my retirement savings goals as training for retirement. Sure, I can save just enough and retire someday, but I know that if I push myself that little bit extra I’ll be able to retire sooner and with enough money that I won’t have to worry day to day. By setting and then surpassing my retirement savings goals I am giving myself a distinct advantage and will therefore continue with my push.