Why are you doing what you do?
Do your current actions align with your goals, or, are you doing what you do it because it’s easier?
We have talked to several people in the last few weeks… They all want to get involved in property in some shape or form. They talk to us and unsurprisingly most say the same thing – “I want to buy a property so I can get more money…”
That’s not the answer. Its ‘an’ answer but we need to drill down and ask some more questions.
Think about it another way, you want to buy a car. The car will take you from home to work and back again…. Any car will do that. Why then do some people drive a small hatch back while others drive a 7-seater?
At some point they had to think… is it just for work, or will they have to take the kids to school in the mornings or to the park. If they take them to the park, they might also need to take their bikes…
Before buying a car, you understand your requirements and set your goal.
You then set out to achieve that goal.
Property is no different.
We all like the idea of buying a property but we need to understand ‘why’. What are you really trying to achieve?
Before engaging anyone and bringing them into CDPG we will ask questions to understand where - or if we can help.
Do you want to invest for retirement, retire early, save for your children, generate another income to allow you to focus on something else, a hobby? There is an endless number of reasons – but each one is specific to you, the individual.
To assist we decided to create a post on setting goals and why we believe they are important….
Setting goals and staying on course:
You will have set many goals in your life already. Chances (and hopes) are, you will have achieved many of them without a great deal of thought.
Goals such as passing your driving test, buying your first car, or saving for a holiday - even something as simple as going to the shop is a goal.
When it comes to long term goals, you need to consider a SMART goal.
We’re not going to go into the history of SMART goals but there is a lot of reading material out there if you want…. Instead we’re going to focus on the ‘SMART’ part and taking it forward.
Firstly, let us look at the reasons why we feel setting goals are vital. Goals are important for two main reasons, long-term vision, and short-term motivation.
They give you the aspirations needed to achieve something, whilst also acting as a reminder for why you need to keep going. By knowing what you would like to achieve, you can break it down into smaller manageable steps.
This will maintain your motivation and allow you to see the progress you are making towards your goal.
As an example, we will assume your goal is “to own ten properties that are generating rental income”.
This goal is too broad. We need to transform it into a SMART goal.
“My goal is to locate and purchase two properties in Northern Ireland per year, generating a combined positive cash flow of £3,000 within five years. No single property will generate less than £300 per month positive cash flow”
Your SMART goal will break down to the following components:
S – SPECIFIC
Your goal has now become specific by stating the following conditions:
· Stating the intended location of the properties,
· Stating the minimum positive cash flow of each property; and,
· Stating the intended income or positive monthly cash flow
M – MEASURABLE
The goal is measurable since each property will generate no less than £300 per month positive cash flow and you aim to purchase two per year. You are therefore able to determine if you are working to your intended deadlines.
A – ATTAINABLE
The goal is attainable, giving a one-year gap to allow you to retain focus on finding the right properties for your budget. This also allows time to finalise the necessary paperwork to fund your venture and acquire a tenant to start to generate rental income.
R – RELEVANT
Your goal is relevant to you as a property investor and aligns with your plans to expand your property portfolio to diversify your income.
T – TIME BASED
You have set an intended time deadline for your goal, which is five years. This ensures you can measure your progress in relation to your end goal and determine if you need to make any changes to stay on track.
Therefore, through setting a SMART goal you are improving your chances of success, with an important strategy to refer to and manageable steps to keep you on the right track.
By using this strategy, you can understand where you are, in relation to where you want to be.
The short-term motivation to achieve small steps is the ultimate deciding factor in whether you achieve your long-term vision.
If you want to discuss or need any help in setting out, understanding, or achieving your goals contact us.
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