- There are six key steps to building lifelong wealth.
- Establish short-, medium- and long-term goals, and never stop making adjustments to them.
- Take care of urgent matters first, important matters second and nice-to-have issues last.
Several of my peers and I used to meet in a study group. One of the members, John, would always bark out: “We need a plan, we need a plan!” Why? “So we can change it,” he’d say. While most of us agree that planning is important, it’s even more important to be able to change your plan. I’ve found that there are six key steps in planning for your success:
- Establishing goals. There are short-, intermediate- and long-term goals, such as saving money for a house or a car, college funding for your children, or achieving financial independence.
- Collecting your financial and nonfinancial data. The better your data, the better your decision making will be. In particular, make certain that you have good information about your budget and expenses because it makes a big difference in the long term.
- Analyzing your information. Pay special attention to your cash flow, taxes and balance sheet, which are things that will be with you the rest of your life. Also look closely at your investments, estate and employee benefits.
- Developing strategies. You want to look at which strategy will work best for you going forward to meet your goals. Not everyone finds it easy to determine which to use, but as you move through life, it will become clearer how to put the right strategies in place for your particular circumstances.
- Developing an action plan. You want to prioritize by handling the urgent things first, the important things second and finally the nice-to-have things, all within a realistic timetable.
- Monitoring and adjusting the plan. Your situation changes from the inside and is affected by what happens from the outside. You need to continually make adjustments. If you don’t, you can’t grow and survive. For instance, suppose Apple stopped making products after the iPhone 3. We’d never have the iPhone 6 or 7, and the company wouldn’t be the same.
This six-step process is how successful people have built their wealth. These steps, along with making smart decisions throughout their lives, make all the difference in the world. It will work for you too.
Until next time. Enjoy, Gary.