Why Long Term Goal Planning Might Be Severely Hurting Your Financial Future

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76 years ago Napolean Hill wrote the book “Think and Grow Rich,” one of the best selling self-help books of all time.  He argues that to reach financial wealth the most important thing to do is create an aggressive and specific target monetary target.  Tape the goal to your bathroom mirror, imagine yourself achieving that goal, and make it part of your being.  Once you know where you’re going, getting there is the easy part.

This idea of long term goals has become a cornerstone of personal and business development.  Esteemed business authors and experts have written extensively about this concept.  Here are a few better known examples:

  • A 1981 article by George T. Doran first described the value of setting Specific, Measurable, Attainable, Relevant, Time-Bound (SMART) goals.
  • The 1991 book “Built to Last” by Jim Collins spent an entire chapter explaining how successful companies have Big Hairy Audacious Goals (BHAGs).  Hard to achieve goals that galvanize and align everyone you interact with.
  • The 2006 book “The Secret” borrows wholesale this idea of immersing yourself in your goals.  If you fall in love with the idea of having a bunch of money, you turn yourself into a riches magnet.

At some level this approach makes intuitive sense.  After all, you wouldn’t set sail without a destination in mind.

There’s one problem:  it doesn’t always work

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You Sure Know How to Pick ’em

I’ve analyzed 100 great business executives and have found 99% of them share one trait which I feel is the main driver of their success.  The person who doesn’t do this thing is nothing more than a statistical outlier.

What’s the one trait?

They all wear underwear.  (One of the CEO’s was more…liberal…than the others).

It’s a ridiculous argument, right?

Folks with a mathematical bent will recognize this is a classic example of “selection bias.”  When you focus on one group and ignore the excluded groups, you’re susceptible to focusing on traits which don’t distinguish that group.

My analysis never happened (no, I don’t make a habit of asking CEO’s if they wear underwear).  But if it had, the fundamental flaw would have been I didn’t talk to the people who weren’t successful.  If I had, I’d know most people wear underwear, successful or not.

As humans, we love to sweep failures under the rug and focus on the rags to riches stories.  Quick, try and name the CEO’s of 10 now bankrupt companies.

If you manage it, you’ve a better memory than I.

It turns out, not many journalists are champing at the bit to interview stewards of failed companies.

In the introduction to “Think and Grow Rich,” Napolean Hill goes to great lengths to tell us how many successful people he interviewed.  He even provides a list of interviewees which is a veritable who’s who of success stories at the time.  Where were the ones who failed?  Classic selection bias.

His thinking goes like this: “Of the 500 people I’ve interview, most of them set an ambitious goal and then devoted their life to attaining it.”

The thing is, the people who fail do the exact same thing.

Everyone who has failed spectacularly knew exactly what they were trying to accomplish and you better believe they worked their tails off.  Nick Leeson, the designers of the Titanic, the manufacturers of the Hindenberg, and programmers for Google+ all worked incredibly hard to accomplish something they thought would be amazing.

The difference is the people in charge of the successful ventures were right and the failures were wrong.

Jim Collin’s introduced the concept of Big Hair Audacious Goals (BHAGs), and claims it’s one way great companies distinguish themselves.  Here is a list of a few he highlights:

  • Disney – Best the best company in all fields of family entertainment
  • Ford – Democratize the automobile
  • Stanford – Become the Harvard of the West

How about these?

  • Become the global leader in rentable home entertainment
  • Tear down barriers, lower costs, and increase the opportunities for home ownership
  • Become the most profitable, single-source provider of communications services to customers around the world

They are the mission statements for Blockbuster, Fannie Mae, and WorldCom.  The reason I could find these is because their failure was so spectacular.  What about all of those companies that never make it, or sort of fizzle away?

I can’t name one company without a mission statement/long term plan.  However, 71% of companies fail within the first 10 years (a decade is the minimum for  BHAGs according to Jim Collins).

Maybe long term goals aren’t all they’re hyped up to be…

…or maybe they’re bad

The benefits of long term goals are oft discussed, not so much the disadvantages.  Well…with the exception of an article published by the Harvard Business School with the amazing title of: “Goals Gone Wild.”

Let’s shine a light into the long term goal pitfalls.

Locking it In

I recently ran across a fellow investors explicit, and aggressively public, goal of buying 100 rental properties by 2023.  Let’s take a moment to chat about that.

This investor has been investing for three years and has had great returns investing in rental properties.  However, that three year period has seen abnormally high rent/home price ratios.

His goal assumes that nothing will change in the next decade.

There is little I can say with certainty, but let’s just say I have a high degree of certainty this is not a valid assumption.

The problem is that in creating too specific of a goal, this investor is locking himself into one course of action.  If he follows Napolean Hill’s advice, he will immerse himself in this goal and make it an all consuming passion.

What if the market he’s investing in has a surge in home prices?  What if they drop precipitously in his area?  What if interest rates return to the 1980’s level of  15%?

Will he be able to change his approach?  Potentially.  But that will require him casting aside the image of himself he will have crafted over many years.  That’s not easy.

A typical person in that situation might just keep working towards the goal.  100 rental properties or bust!

I suspect this investor’s real aim is financial independence.

By setting this an overly specific goal he’s making it hard to be dynamic and I feel there’s a strong chance it will make it harder to reach his true desire.

Events outside of your control have a tendency to throw your plans into disarray.  Having incredibly specific goals which become your primary focus can hinder your vision and make it harder for you to adapt to situations as they unfold.

Unless of course you first suffer from…

Goal Fatigue

Most business experts argue that a long term goal should be at least 10 years.

Malcolm Gladwell, in his popular book “Outliers,” argues that to become world class at anything you need to practice it for 10,000 hours.

That number has no meaning to me, so let’s break it down to something I can digest.  There are 40 hours in an average work week and 50 work weeks in a year.  Thus 10,000 hours is the equivalent of 5 years of full time work (less if you put include overtime).

If we follow that logic, while you’re working on a 10 year plan, you’ll spend the first 5 years mastering the subject and the second 5 years doing…the same thing over and over again.

I, for one, can’t survive without a challenge.  Mihaly Csikszentmihalyi famously argues people are happiest when we are absorbed in a task at the edge of our current ability, an idea he calls “Flow.”

If I “mastered” a subject years ago, how excited am I going to be to wake up ever morning and keep doing the same thing?

Unless you’re a dedicated Japanese sushi maker, I think most of us will need to seek out new and regular challenges.

Now I recognize that long term goals can have many phases and in a company of 100 people this comparison breaks down, but the risk of goal fatigue is still large.

Serious Unintended Consequences

In a great, albeit dry, paper by Bargh, Green, and Fitzsimons titled “The Selfish Goal: Unintended Consequences of Intended Goal Pursuits” argues that once we set a goal, it consciously and subconsciously influences our decision making, in surprising ways.

Let’s say you are interviewing candidates for a position.  The first thing most people do is create a list of criteria on which to asses the interviewees.  Makes sense.

What doesn’t make sense is during the weeks or months of your employee search, you will subconsciously apply the same metric to everyone you meet.

Let’s say you’re in the process of interviewing computer scientists.  If you go to a party after work hours and meet an art student, you are statistically more likely to dislike them than if you weren’t looking for a programmer.

Does That Frighten Anyone Else?

It’s easiest to see the effect with money.  Let’s say your long term is to make 10 million bucks in a next 10 years.  For the entire 10 years you will automatically place a negative bias on any idea that doesn’t fit into your “make lots of money” goal.  Even if it’s something reasonable like “don’t crap on your shareholders.”

This idea helps explain the frequency of financial scandals in the monetarily driven country of America.

From this point of view, the thinking in books like “Think and Grow Rich” and “The Secret” is not only not realistic (and statistically flawed), it can be downright dangerous.

The same applies to non monetary goals.  You can get so caught up in what you’re attempting to accomplish that you ignore the negative consequences of your actions.

Wrap It Up: What Should We Do About Long Term Goals?

Long term goals can be useful…if you’re right.

If you set a goal that is wrong, too limiting, or has surprising consequences it can be devastating.

How do you set the correct goal?  If you don’t have a functioning crystal ball, keep them generic and open for interpretation.

Abandon Big Hairy Audacious Goals

As we briefly mentioned, in the book “Built to Last,” Jim Collins came up with what he calls Big Hairy Audacious Goals (BHAGS).  The theory being that by setting a very aggressive time-bounded goal it will provide invaluable focus and clarity at at any level (individual, team, or company).

That was in 1994.

Credit to Jim Collins because following the success of his book he cobbled together a research team and did a 5 year in depth comparison of good and great companies.  Because he didn’t just look at amazing companies (like Napolean Hill), he was able to avoid much of the selection bias we discussed earlier.

When the data was in, he quietly did something astounding…he changed his mind.

In his 2001 book “Good to Great” there is nothing about goal setting at all.  In its place is what he coins the flywheeel.  A company needs to continually try different strategies and run with the the good ones and cut short the bad.  Build inertia over time, like a flywheel.  In many ways, this is the opposite of setting one goal for 10 years down the line and doggedly pursuing it.

There are no shortage of examples of companies which started in one arena and switched to another because they felt the opportunity was greater.  Nintendo originally sold playing cards.  3M was a mining company.  Where would they be if they had started with a 10 year plan?

Instead, focus on short term goals.  Personally, I think three to six months is about right, but I’ve no data to support that.

Make these goals SMART, develop a detailed plan, and then put your full effort into accomplishing said plan.

Some of these goals you’ll achieve, some you’ll abandon.  Either way, set a new goal.

However, before setting your next goal take a step back and ask if you should continue down this path.  Has the market changed?  Do you still enjoy what you’re doing?  Is this affecting another aspect of your life (or a loved one’s life) in a way you had not forseen?

This isn’t easy.  You have to be honest with yourself and attempt to not get caught up in any inertia you have created.

By all means, have a vague idea of where you’re going.  However, go to great lengths to keep it generic.  Don’t make it a SMART. goal.  Design it so you can easily change direction and not have to strip away part of your identity.

Our current approximate destination is: grow a cash flow focused real estate company until it’s large enough that we can IPO, without sacrificing returns.

Short term goals are a different story…

Photo Credit: fleno.de

About Author

Kenneth Estes

During Kenny's decade in finance he bought many single family rentals in rural areas, as a hobby. Along the way, he talked some brave souls into joining him as investors and recently retired from finance to take his hobby to the next level. Find more by and about Kenny on his personal blog and his recently created twitter account!

51 Comments

  1. Very interesting and well written Kenny. As an investor one has to have a doable plan like a road map in order to arrive at a predetermine designation. Learn a long time ago a simple spread sheet help me a lot. Every day I would look at it and try to increase my assets by 30% a year either by property value or cash flow. One needs short and long term goals that are flexible in order to grow. There are many paths one can take to reach their goals, design one that inspires you and go for it.

    • Kenneth Estes

      Thanks for the kind words Jim.

      I think we agree with one another. The thing for me is a flexible long term goal is going to be by definition abstract and vague.

      I doubt anyone will come up with a goal like “I’m going to own 100 rental properties by January 1st, 2023” with the expectation of having a flexible mind. Same goes with “I’m going to make my net worth $20,000,000.”

      Short term goals should be hard and fast. You either hit ’em or you don’t. As long as you keep the long term “general destination” vague, you avoid many of the negative consequences here.

      Cheers,

      Kenny

  2. Any goal needs to be measurable, so you can evaluate it later.

    How do you measure “grow a cash flow focused real estate company?” How do you know you’ve achieved your goal? How do you measure your “growth?” May be you don’t grow, may be you regress? :), ;).

    • Kenneth Estes

      Thanks for the comment Gayla.

      We shouldn’t confuse metrics and goals.

      An example of a metric is “Assets under management” or “Return on investment.”

      A long term goal would be: “We’re going to have $200,000,000 under management with a 12% return on investment in 10 years”

      The latter implies intent, the former is just tracking where you are.

      As the article said, I’m all about short term goals; they’re a great way to keep improving. However, setting a 10 year target can incur the negative side effects this article talks about: not accounting for catastrophic events, blinded vision, goal fatigue, and unintended consequences.

      Cheers,

      Kenny

  3. If a company doesn’t have any long term goals, how would they know if what they are trying is working? One obvious answer is “if they are making money”… but that would be a goal! One thing to draw from this is to make your long term goals be destinations, and have your short term goals as mileposts to reach along that destination. One should constantly be re-evaluating these mileposts to see if they are SMART (as you said) and if they are moving one closer to their destination (long term goals).

    • Kenneth Estes

      Cheers for the comment James.

      I’m all for short term, SMART goals and more abstract long term “general destinations.”

      It’s when you create incredibly specific long term goals that a host of negative consequences crop up. Especially if they become your driving ambition like the most business literature advocates.

      Cheers,

      Kenny

  4. Kenny – the post is excellent. But, when you were kind enough to pop into Lima to see me we had too little time and I didn’t get to tell you something you need to hear, so listen up:

    Our strengths in life are usually also our weak links – the only question is which one takes hold, how and when. Your propensity for cold logic and reason is most certainly your strength. But, there are times in life when logic doesn’t work – we have to believe. If this has not been brought into focus for you yet, it will be some day.

    Mark’s 100 properties is not about logic – it’s about heart, and to analyze as anything other is silly in my opinion. His success will likely look very different from the 100 houses he imagined, but he will achieve success because he believes – that’s Mark; that’s Brandon Turner; that’s Ben Leybovich, and I do believe it’s YOU as well…

    Kenny – love the article, love your style, and really quite respect your intellect. But, you missed the money on this one…Thoughts?

    • Kenneth Estes

      Hey Ben,

      Thanks for the comment.

      While I can respect where you’re coming from, lord knows I’m not the most emotional person in the world, this isn’t the best place to apply that argument.

      Saying 100 homes within the next 10 years is certainly a good way to motivate yourself. Is it any more valuable than saying, I want to devote myself to real estate? Or perhaps, I want to grow my real estate investment as aggressively as possible? Or even a more realistic, I’ll always be looking for higher returns? Those goals all give you something to stand behind without triggering the negative consequences this article discusses.

      How many of the recent greats got where they were by setting themselves a long term goal? Do you think Bill Gates had a “x number of copies of windows in y years?” Edison had a “z light bulbs before the end of the decade?” They found something they were passionate about and did the most they could, with a relatively short term focus.

      I strongly believe great results are a consequences of working hard on your passions, not setting overly specific predetermined goal post. Half the fun is figuring out exactly where you want to go!

      Cheers,

      Kenny

      • I’m going to do a full article on this, but here are my thoughts for now.

        1. Buying 100 properties is not my only goal or biggest goal. It is one of over 100
        Goals I have long and short.

        2. I strongly disagree with making goals like I want get high returns or I want buy houses aggressively. The reason is there is no way to measure progress or success. If I say I want to buy some houses for a goal that can mean 1 to one person or 100 to another. If I buy 1 I could consider that a success based on the wording of the goal. Even if I had bought 100 the year before and had planned on Buyjng 100 again. The purpose of a goal is to motivate and push you to achieve more than if you had no goals. If your goals are so short sided and unspecific that you can’t measure progress or success then they are no better than having no goals.

        3. Goals can be changed amended and forgotten at any time. Goals are meant to push you farther and motivate you, not rule your life. My full article and comments fully disclose the idea that I may not get to 100, something may come along bigger and better that distracts me. It may not even be real estate related!

        FYI , gates and Edison had extremely similar attitudes as my self. Talk about not giving up, Edison learned how not to create a lightbulb 10,000 times before he finally got it right. Goals can be made in many different ways and different types work better for different people. If you don’t accomplish a goal and it makes you feel bad or dejected you’ve got much more serious attitude problems that need adjusted. Not accomplishing a goal is lot a failure, it is a learning experience. Most likely that big goal got you farther than if you had a small unspecific goal.

        • Agree totally. I would elaborate that not achieving a goal is a positive experience too. You re-evaluate your goal and either find another way to achieve it, if it’s still your goal, or you can just find a better goal, that you like even more. In any case, not achieving a goal exercises your mind more than when you predictably achieve your goal year after a year. And if the goals are too easy to achieve they definitely need to be re-evaluated and changed into something more challenging.

  5. William Shaffer on

    Deep thoughts. I know there is truth there.
    Not sure how passion and energy get wrapped into a general approach for long term. I do see the blinders of very specific long term goals. I also have personally benefited from specific long term goals. I have to chew on this a bit.

  6. Last night I met an older gentleman who has achieved the goal of a large portfolio of rental properties. They all cash flow and he is well off with some paid off and equity in the rest. Careful, methodical and diligent since the 70’s. Rode the waves and is still standing, high and dry today reaping the profits, paying down principal and collecting retirement. Clearly an example of a rigid, but successful buy and hold strategy. Why wasn’t I inspired?

    • Kenneth Estes

      It’s because some of the other points I make. Real estate investing isn’t glamorous. It’s hard work. It’s dealing with tenants. It’s going slowly and not overextending yourself.

      Money easily made is easily lost.

      Do you want excitement or a steady financial income which will let you quit your day job? Turns out it’s hard to have both.

  7. I have the better part of a Ph.D. in psychology (stopped 1 year away) where one of my main focuses was goal setting theory. I now work in a changing industry (healthcare) where I facilitate the process of annual and long-term goal setting – primarily facilitating the discussion between management and the Board. This is a 6+ month process each year, and is especially fun this year with a new strategic plan.

    I highlight this to simply make the point that I’m well versed in this area. So when I say you rock – you really do rock!

    • Kenneth Estes

      Thanks for the kind words Jeremiah.

      That’s brutal; spending 6 months a year figuring out what you’re going to do for the next one year?

      What company are you at again? I’ve got to go short some stock… 🙂

      Cheers,

      Kenny

  8. Everything you need to know about life you can learn on the farm. “Make hay while the sun shines”. As long as there are foreclosures in the pipeline, I’ll be flipping houses. Once they’re gone, I’ll be happy I have some rentals for long-term cash flow.

  9. A few more things to add.

    I looked up some stats and 80% of the wealthy are focussed on at least one goal compared to 12% of the poor. I think to assume poor or unsuccessful people are using goals as well is not accurate.

    Also your example of the rich wearing underwear is a little misleading. Not only do Napolean and many others study the rich, they asked the rich what they did different. Many studies compared the rich to the not so rich like Locke’s psychology studies on goal setting which showed specific, difficult goals produced better results. When you ask a rich person why they became rich, I am listening. They lived their live and know better than anyone. Maybe it was luck, but when they say over and over the same things I take notice. Be positive, have specific goals and never give up.

    Part of your article seems to be on personal goals and the other part on companies goals. I think they are completely different beasts. You mention failed companies, but those companies leaders and founders are all stinking rich! Maybe they aren’t failures so. much.

    • Kenneth Estes

      Cheers for the comment Mark!

      I gather from the fact that you don’t address a single negative consequence caused by specific long term goals, that you agree with me? You can see that setting long term goals can create serious negative consequences and put blinders on you (unless you “change them frequently,” at which point, what’s the point of making them uber specific? It becomes nothing more than a psychological hurdle to overcome).

      I don’t think we’re going to be able to come to terms on this, but I’ll make a couple of high level points.

      Let’s not confuse long term and short term goals.

      Setting aggressive SMART short term goals helps keep you driven and engaged. Specific long term goals are where you get into trouble. From what I can read, all of your arguments (including Lock’s goal setting theories) are about goals in general, not about their duration. (At couple of points you even say I’m arguing for unspecific short goals, which is just confusing).

      I suspect this 80%/20% study you’re referencing is about goals in general, not long term goals. Correct?

      It’s only in the last century that we’ve gotten the two confused. There was some data that came out saying goals were beneficial, and gurus and leadership consultants latched onto it. They extended to an extreme that is not supported by any data, and is downright impractical and dangerous.

      Discipline and long term goals aren’t the same thing

      Edison and Gates got where they were because of discipline, not a specific long term goal. Bill Gates loved programming and had a general idea of what he wanted to create.

      Thomas Edison didn’t invent the light bulb (working models had been around for 50 years before he came on the scene), he found a filament that let it run for a long time and become commercially viable. His approach is similar to approach in all of his inventions: throw it at the wall and see what fits. Carbon? Nope. Iron? Nope. Magnesium? Nope. Platinum? Nope. Maybe we should try carbon again? Success!

      Menlo Park is a great example of a throw it at the wall and see what sticks. Did that work? No? Next! Did that work? Yes? Ok, let’s roll with it! Long term specific goals? Not so much.

      That’s discipline and being able to continue when things don’t work out, it has nothing to do with setting a long term goal.

      Would you ask a bird how it flies?

      People are really good at creating stories of their lives. Picking and choosing formative moments to adapt to how they and society expect things to happen. We’re irrational creatures, and more often than not these stories are wrong.

      Let’s argue this in reverse. Let’s assume you’re right and we are rational and able to understand what got us into a particular situation.

      Then we should be able to ask someone why they failed. Would you believe why they said? No, of course not. The answer will always externalize the difficulties (it wasn’t me, it was the market!). If you ask someone why they will succeed it will always be for an internal reason (here’s why I’m so much better than everyone else).

      The point is not that either one is more right than the other, the point is it’s as useful to ask someone why they are the way they are as it is to ask a bird how it can fly. You need to look at data.

      There was a famous study done at Yale which showed that people with long term goals were significantly more successful than their classmates without. Trouble is that study never happened, it was made up by someone attempting to sell a point. People wanted to believe the idea, so they ran with it.

      • Alright, I have been thinking about this and here are my thoughts. First off I think different goals and goal strategies work better for different people so it is hard to classify these goals are good and these are bad.

        I will say if someone had a specific long term goal like my 100 properties by such and such and that was there only goal, then it could be harmful especially if they didn’t really love real estate or the process of buying properties.

        There are many variables that go Into goal setting and your attitude in general. If that same person like myself had many other goals and that 100 property goal was just one part of the big picture of many goals bigger and smaller I think it is a good thing.

        I also think some of the people with the greatest accomplishments of all time had extremely specific, one minded long term goals. Nicolas tesla thought about electricity his entire life since he was a kid, he was consumed by it and that was his long term goal. Create as much with electricity as he could. His main goal was to build a powerful electric motor. We was incredibly successful as an inventor and changed our world, but he was not a happy man and spent his later years a little crazy. He was a success for mankind, but was he a successful person? Who knows how to judge that? With Edison he had many many goals long and short. He didn’t have value short term goals that said I want to invent something in the next 6 months. He had very specific items that took many many years of work and experimentation. If he don’t have goals of investing those thins, he wouldn’t have been neary as specific because he might have given up.

        My personal philosophy is to have many long, medium and short term goals. Value, specific and somewhere inbetween. I think you have to have some specificity in your goals. I was a little confused at the end of your article because you mention using SMART goals which are specific and difficult, but then say to use vaque easy to reach goals. I think your short term goals have to be specific so you can measure them and have something to shot for and break down.

        As for long term goals specifically I think you have to have them whether they are specific or vague. You have to have something to aim for to guide your subconscious to help you. It can be vague like be as happy as possible or make enough money to retire in 10 years. Make enough money to be able to spend your life giving to charity. Etc. these long term goals leave plenty of leeway for adjustments in the direction you want to take to reach these goals. I would say you used a goal yourself when you said you want to create a company capable of an IPO. That is a pretty specific and difficult goal.

        I think it is too hard to classify success and failure, because many extremely successful people failed before they succeeded. You say many people used long term goals and failed to succeed. How do you know they just didn’t get tere yet. Next year they could break through and be incredibly successful. One of the traits of the successful is they didn’t give up, they kept trying after failures and when every told them to stop.

        You mention the rich taking credit and the poor blaming others. That is also a trait that the rich embrace and poor reject. In both failures and successes the rich tend to take responsibility. The poor tend to take responsibility for the successes and blame for the failures.

        • Kenneth Estes

          I think we pretty much agree.

          Use specific short term goals and be happy with vague, or very flexible long term goals.

          This article is pointing out that this view is opposed to much of the current “wisdom,” especially Napolean Hill (who I only bring up as he’s referenced quite a bit on your web site).

          Hill has no concept of vague goals or flexibility. He advocates setting super specific goals and making it a part of every breath you take, make it your identity. This thinking is so prevalent today, but is rarely questioned.

          Cheers,

          Kenny

  10. Good article, Kenny. I couldn’t agree more. In my opinion, it is pointless to make specific goals for more than a couple years. Have direction? Most certainly. Set specific goals? Waste of time imo.

    I bet if most people were asked to look back at the last 5-10-20 years and say whether or not they could see themselves in the position they are in today, along with all the events that transpired in between, the vast majority would say they couldn’t imagine it. I know I certainly couldn’t. The point is life changes fast, especially when you’re young.

    I believe what you should do is educate yourself and put yourself in position to take advantage of opportunities that come up along the way. As the famous saying goes, “preparation + opportunity = success.”

  11. Kenny,
    I have read two of your articles. I won’t say anything about the first. But, this article is well thought out and documented. It is organized and just makes a lot of sense. you took the reader from one point (several well know authors) to a completely different point utilizing all the excellence of “change theroy.” I am totally impressed and really have something to think about as I begin writing my 2014 goals (done every nov and dec). Hmmm.

    Well done!!!
    bb

  12. Mark,
    I’ve been reading your articles and goals for several months now. Your articles are inspiring and are an encouragement to me. So, if someone disagrees with your goals just say something like, “Thank you for your input, I’ll give that some consideration.” I don’t think I would necessairly spend time defending them. They are your goals and if they do not work for someone else then so be it. I will always have written short and long terms goals. Anyone and everyone can tell me they have no value and I’ll be good with their opinion. But. . . I will still keep writing my short AND long term goals down. Anyway, keep doing what you are doing because it is working.

    Further, much of what we discuss is sematics. It is very difficult, impossible to accurately describe love or give an exact desscription of a sunset. Likewise it is difficult, no impossible to give the exact reason having a long term goal is valuable. Is it? I think so. I think what Kenny provided is excellent. But, I also think your marketing and articles about your goals and the day to day are excellent. Who is right? Both. Who is wrong? Neither.
    Keep it up.
    bb

    • Mark Ferguson

      Hi Bob, Thank you and I agree it is very difficult to measure success in itself, let alone success related to goals.

      I hope I didn’t come off as argumentative as I love having these discussions with people, may be my overly competitive nature. I think Kenny had some great points and I tried to concede my specific long term goal may not be best for everyone. A lot of my comments and articles are about education and that is my main goal. If I ever cross the line or get too argumentative let me know! Or maybe you just did. 🙂

  13. The cause of failure is rarely the long term goal in of itself, but often the poor planning, rigidity of approach, and/or lack of accurate feedback in the path by which some aim to achieve it.

  14. Hector Trevino on

    This is one of my favorite posts. I’ve always naturally balked at long-term goals, never knew why, and as a result thought I might be short-selling myself or maybe even lazy. I am, however, extremely flexible and adaptable to almost any situation, and I believe that is why I never bought into long-term goals. Things change, and adaptation is key for anything.

  15. For fun, consider elite athletes for a moment. Let’s just use an Olympic weightlifter or Bobsled. Both of these athletes come from track and field backgrounds and during the progression of athletics can be pulled many directions. Football, rugby and such. Without the long term goal of the gold medal, semi pro ball might seem great. Heck, US athletes are not paid to represent their country. Yes, at 24 they peak so the long term is shorter, but China, Russia and heck most countries pool these kids from age 4-6. People today set records that most people cant even grasp, with zero public support. It’s done for a self serving cause, ands it’s accompanied by will alone. Every article here seems to look only to same field for wisdom, consider everyone on top who was not given the position does have one thing in common. Hard damn work, repeated relentlessly until one day they proven all thought is reality.
    I understand this is very out there, but this is the background I come from so I find much joy in the path they share.

    • Kenneth Estes

      Hey Eric, cheers for the comment.

      I couldn’t agree more that success all comes down to “hard damn work.” Make your own luck.

      To be honest, I don’t know much about Olympic athletes, and how they reach their goals. So maybe I can just ask a couple of questions?

      – What percentage of Olympians setting a long term goal of getting the gold don’t succeed? 99%? Maybe the long term goal isn’t the deciding factor?
      – How many stores can you point to of Olympians destroying the rest of their lives (injuries, driving apart families, etc)? Chinese and Russian Olympians being forced by the state comes to mind. Do you think this has any impact on this discussion?

      Cheers,

      Kenny

      • I think if you want to be the very best at something you have to have a long term goal that is wry specific and go for it all out until there is no hope whatsoever. Like Kenny said this may not make te test of yor life great or may even make a person miserable but it alsoay be worth it to them to know they are it their all. That is why different goals are great for different people.

        I will add many many athletes are extremely successful in business because they learn a tremendous work ethic. That work ethic comes from long term goals and never swaying from that path.

  16. Kenny,
    You are now my favorite blogger on here. After the “4 reasons why you shouldn’t buy real estate” post, which was brilliant (and I say that as someone that owns lots of real estate and is acquiring more), and now this article, I had to say something.

    I know you’ll get a lot of * for this article and the last one from people who are quite brainwashed in the standard way of thinking, but I personally love your contrarian thinking. So much of the real estate and business world is regurgitating the same stuff. It’s refreshing to hear a different alternative perspective, and the post mentioned above and this one especially made me think.

    Thank you, and keep up the awesome work challenging that status quo thinking!

    • Kenneth Estes

      Thanks for the kind words Joe. In my experience, the best way to be successful is by figuring out what everyone else is doing and then do the exact opposite.

      That’s why I like rap music. So many good examples of what not to do. 🙂

  17. Cool post! Have you studied formal logic, or are you just a natural? 🙂
    Anyway, in my world, both of these things are true: 1)You MUST have a goal. 2) Goals are waste of time.
    yup.

    • Kenneth Estes

      Lol, I like your thinking:

      “The test of a first rate intelligence is the ability to hold two opposed ideas in the mind at the same time, and still retain the ability to function.” – F. Scott Fitzgerald

      To your question, most of my life I’ve studied one logic driven discipline or another (debate, computer science, math, statistics, philosophy, etc).

      Cheers,

      Kenny

  18. Logic and intelligence are no more of a necessity than will and desire. They are in fact low level qualities of very successful people. The greats in any fashion, be it khan,Jordan or Neil deGrasse Tyson, it is the desire to be great at your passion. To go back to my example of an Olympic athlete, let’s consider the ultimate goal. Gold medal. A very very small percentage reach this point as Kenny pointed out. But this point is the highest level of mastery in that arena. Long term planning, or in the context of athletics is periodization. Long term goals broken down into accumulation phases to keep it simple build said athlete to reach point B as predicted. Or very close they hope. By falling short however this athlete does not try to serve two masters by losing sight if his dream. To a genuine badass, it only fuels them more. This is drive, will and passion. Not logic. Logic days odds are against you big dog, better chase an easier path hombre. No thank you. Set great goals and disregard the silent voices who have never stood at the top. How can they speak of that which they have not fought for. You cannot, so stop to everyone who feels the urge to open their mouth about setting unattainable goals. Your opinions are not welcomed on society, this is a huge problem. To Mark, is100 houses even great? Shoot even higher sir, love your blog and your dead on rights correct with big goals. Are there any other goals really. If I wanna lose 2 pounds that’s not a goal, it’s nothing. Now 100 pounds, and I’m rooting for you all the way. To Kenny, thank you for your writings, you have made me reconsider my retirement plan, to be honest it is you along with Jeff Brown. Great company to he in. I hope this rant can be taking as it’s intended, wake up people. The greats we aspire to be all have the same qualities we do, they just give it there life, literally sometimes, to make the unattainable a story to be read. Later.

  19. Kenny,

    Of course to be driven at the highest levels has a negative effect on most other area of your life. That’s the discipline. To assume the other paths of mediocrity or failed pursuits doesn’t also would be ill advised. Heck , I work in a machine shop on night shift with a baby girl at home and second on the way. My failures have cost me greatly, I would have rather failed chasing greatness. It’s always in the eye of the beholder, and speaking for myself I’m at a place were all that is forgotten when I come home. So yes, Olympic athletes give up lots sometimes, but that’s the cost. That is not sacrifice, that’s selfish. To give up your dream to have more time at home is sacrifice. To bad most don’t know the difference. Have a great day, and again thank you Kenny for your awesome viewpoint.

  20. Kenny,

    I must commend you for the boldness you employ as a writer. While controversial, your articles are always well thought-out and researched and your contrarian paradigm serves a necessary objective function in an environment filled with like-minded professionals.

    I like your comment about how a study of the successful must be done in conjunction with a study of their unsuccessful counterparts. It’s easy to get caught up in conclusions based on correlations even if there is little or no causal relationship between variables.

    Extremely specific long-term goals are overambitious; it’s like trying to predict the future. However, I do believe there must be long-term DIRECTION (not static), and if it can be measurable that is ideal. In order to achieve long-term direction, specific short-terms goals are essential, but they are limited by the systems they are built for and the discipline of the individual to meet them. Just my $0.02 🙂

    Keep ’em coming Kenny!

  21. No challenging comments. I just wanted to say that I find most real estate investing articles to be obvious, generic, and sometimes wrong. However, this article is very interesting and you backed it up well with your references and research. I’m impressed and hope to read more in the future. Keep up the good work.

  22. Great post! You should read “Why Smart Executives Fail” by Sydney Finkelstein. It outlines how executives who are really good at running established business are often really bad at running startups because they lack the ability to test and chase. Instead, they make a plan and throw gobs of resources at seeing it through. The don’t iterate to the best solution. I like the venture capital model: give good people with some innovative ideas some limited resources. Then see where that takes them, re-evaluate, and adjust. Repeat as needed. 🙂

  23. I think everyone needs to set short and long term goals and hold themselves accountable to them. Thats why it can be so successful to pin it to your mirror or roof or have it with you in the car. You need to be constantly reminded about what you set out to achieve and not fall into the trap of becoming complacent. I do agree though some of the most successful people have had to get knocked down a couple of times before ultimately becoming successful.

  24. I will admit that when I first saw the title and started reading I was thinking “What kind of BS is he going to come up with just to get people heated”. However after reading the piece I have to say I think you have some great points and agree with your overall points.

    Short term goals are great and pretty important to move you forward and help you improve. Specific long term goals can help clarify those short term goals, but I agree they also can hamper you if it keeps you from being flexible and adjusting as you learn new things and new opportunities you had not considered present themselves.

    I have longer term goals. Some are pretty specific and “SMART” but others are fairly vague and don’t have any specific time frames (Other than maybe “before I die”) but those actually are more meaningful to me then the SMART ones.
    I guess I can stop feeling bad about that. 🙂

  25. Very good post, Kenny. I had reached a somewhat similar conclusion some time ago (w/ respect to the
    “a posteriori” (after the fact) analysis that Collins and others do in their books about what is it that makes a company (or individual) very successful. (it is a form of “curve fitting”, used in other realms) One interesting aspect that you don’t mention in your article is that the results from the collection of 11 companies in the book “From Good to Great”, have been mediocre during the years after the book was published (some companies have had spectacular failures, during good portions of the subsequent years… they really didn’t showed to be “Great”). It is relatively easy to concoct stories about explaining the past, but much harder to predict the future. Isn’t your theory also (in a way) one that tries to predict the future? That is, you are saying that, keeping goals flexible (yet still having goals) is a way to outperform other strategies. That in itself is a theory/method of how to do better in the future. I think, a methodical analysis and follow up of a large number of individuals/companies following that method will prove that it will also have a similar behavior as the others from Collins et al (it will work for some, it will fail very bad for others). So, I think it is not a better predictor. I think a probably better advise is: during the present, study the past and your options, study multiple future scenarios for the future and potential outcomes (both positive and negative) and plain and simple, be aware, and try to maximize short term goals, in the context of that awareness. Constant study of the conditions of the present and possible conditions of the future, and reflection of those, is as good as you can do. Don’t try to predict the future and believe that there is a recipe or method for guaranteeing success. Analysis and study and deep thinking in the present, is the only thing that you can reasonably do. The other stuff is just wishful thinking (which drives some, but which is definitely not a predictor of future success)

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