Most of us have goals in life. Some make clearly defined targets while others have an end in mind but fumble their way to it. Either way, goals give us direction and purpose to our daily grind.
When we think of goals, we think mostly about material things especially that society has conditioned our minds to think that way.
We think of stuff like a brand new car, a house we can call our own, a high-paying career, a business, or millions in the bank or retirement accounts.
All these are valid goals — in fact, any goal is, especially if it drives you to use your God-given gifts, to give all you’ve got, or to paraphrase Michael Jordan, to fire every bullet in your holster.
However, if we talk about financial goals, sometimes it takes more than having a goal, it’s also about making the right priorities and the correct strategies.
Here we take a look at some of the most common goals people have in their lives and see where they should be on our numbered list.
Common Priorities in Life Based on Financial Capabilities
5. A car
It’s nice, it’s sleek, and it’s chic. But should buying a car be your priority?
From a practical financial point of view, it should not be. A car is a depreciating asset, and an expensive one at that. Yet many people buy cars just because they feel that they need one when in fact they don’t. The voice inside their head is actually saying that they want one to make themselves feel good. The desire to feel good is naturally a human’s soft spot. And we spend tons to get that feeling.
Sometimes, without considering the financial consequences. Yes, you may be able to afford a car’s monthly mortgage but what if your salary is only literally enough. You’re living just within your means and that will go on for years until you pay off the car loan. Result: zero savings.
4. A house
Between a car and a house, I would pick the house first. Why? At least a house generally increases in value over time, assuming there’d be housing market crash, of course.
Likewise, house mortgages are typically spread over 30 years (with relatively smaller interest) so you are assured of a roof above your head so long as you make the mortgages.
3. A business
Now we’re talking. A business is one of the best ways to generate multiple income streams. It’s not a foolproof way to achieve financial freedom because there will be learning curve and failures, but if you have the guts for it, then save for your business capital, get some necessary skills, and the risk might just be worth it.
2. Assets and investments
This is probably the fastest and easiest thing that you can do right now. Build you portfolio of paper assets that include high risk/high reward and low risk instruments.
The reason that we should not forego investing in paper assets now is the growth rate that it offers to small time investors and traditional savers. In fact you might just be able to save money from your investments that is enough to buy a car or a house in cash! By then, you don’t have to be indebted for 30 years or beyond.
1. Invest in your happiness first
But perhaps this is by far the most important priority we should set our eyes on: investing in our happiness.
If you keep at a job that has a good pay but is not making you happy in other aspects, then the money flooding your way will not truly make you happy.
You might just even overspend to make yourself feel fulfilled. You go on expensive vacations to escape from something you don’t feel like doing. You’ll get a paycheck but leave from work feeling unfulfilled.
So don’t make having lots of money or driving a fast car as your ultimate goal in life. Instead, find your passion and make profit off it.
If you love helping people arrange their travel to other countries, then a travel agency might be a good business idea for you. If you love baking, then why not try baking for the love of cakes and cookies, while making money at the same time?
In his book The $100 Startup, Chris Guillebeau encourages aspiring entrepreneurs to discover the intersection between your skills or expertise and what people are willing to pay for to relieve them of their life’s pain.
This is what he calls the passion + profit principle. Some people describe this as the best of both worlds where you get to enjoy life while making a living.
In my younger days, I spent my money for pursuits that led me to the where I am now. And I never regretted it. Finding my passion and purpose, in life and in business, is what truly makes me happy — not the money that comes with it.
So my unsolicited advice for the younger generation is to find what you love to do, because like what Steve Jobs said, when you love what you are doing, great work follows.
And with great work, comes good payday which of course gives you the freedom to pursue your other material goals.