Goal setting for your finances can seem overwhelming, given all the demands on your time, attention, and resources. However, much like selecting targets in other aspects of your life, identifying key financial goals requires self-reflection – to know what brought you to where you are now – coupled with a forward-thinking mindset.
Where you are in your financial journey will dictate whether you need to, for example, work to aggressively pay down debt or begin the process of saving for retirement. Assuming that your debt – excluding mortgage – is limited to non-existent, there is one financial goal that should be the cornerstone of your financial pursuits.
Accumulating assets.
Assets are things that put money in your pocket. A few examples of assets are:
- Index fund tracking the S&P 500
- Bonds that are outpacing inflation
- Rental property earning more than you spend on it
- Profitable Business you own
Why are assets such a financial criticality?
They begin as seeds that, once planted, will bear fruit for you in the right seasons.
After purchasing an Index fund, the fund may experience times of turmoil, but over the long-haul that fund will yield tremendously in terms of dividends and appreciation in value.
When you first bought that condo, you may have expended energy and money fixing it up. When it’s time, and you have placed a tenant paying consistent rent that more than covers the cost you incur to own it, you now have an extraordinary financial asset.
Assets are synonymous with the terms “financial security” and “wealth”. The more you have, the higher the level of freedom you have. For most, when they have acquired a certain threshold of assets, they then have the ability to retire. In other words, they can stop trading their time for money. For those fortunate enough to love their work or vocation, they may choose to continue with those endeavors, but they don’t have to.
The freedom of time provides for your freedom of choice.