Setting financial goals and mapping a pathway to achieving them is an important tool used by successful investors to create wealth safely and achieve financial security.
According to inSynergy’s head of investment finance, Raj Sarin, the company’s property investment education and strategy workshop is specifically structured around proven goal-setting methodology to help clients understand what they want to achieve and the steps they need to take achieve it.
In this article, Raj talks about inSynergy’s six-step goal-setting process:
Step 1: Decide what you want:
The first step in goal setting is deciding what you want in the short, medium and long term.
To get started, Raj suggests asking where you see yourself in 15 to 20 years.
“Where are you living? What is your income? What does your retirement look like?”
Visualisation is an important and powerful step in goalsetting. How does that picture you just created in your mind make you feel?
The key is to make your goals specific and measurable so you can stay focused, motivated and confident you are on the right track, Raj says. Don’t be afraid though, to have goals that scare you, in fact I encourage myself to not be limited by my mind. Having goals that scare you might work for you if you are a driven sort of individual. We often refer to these types of goals as a BHAG (big hairy audacious goal)!
Step 2: Set a deadline:
Setting deadlines can help you stay motivated and give structure to your goals.
Raj says “timelines are essential for keeping your property and investment goals on track”.
He also suggests reviewing your portfolio at least once a year to ensure your property’s value and capital growth are in line with your goals and timelines.
Do note however that property is a mid to long-term strategy. Do not panic sell! In fact, have measures in place that allow you the flexibility to hold property through its seven to 10 year cycle. At inSynergy we have various risk mitigation strategies we deploy to enable our clients this flexibility.
Step 3: Identify Milestones:
Milestones are described by Raj as the important stages in life that will either bring your goal closer or push it out a little bit.
“These might include having kids, getting married or changes in income or outgoings such as the beginning or end of private schooling for children,” Raj says, adding that it’s essential to plan for these significant events.
Step 4: Create an action plan:
Now that you’ve written your goals and timelines down, it’s time to plan how you’re going to achieve them.
“Here, you might decide when, where and how you will purchase a property, as well as whose name to put it in to minimise tax & improve cashflow,” Raj says.
He also suggests considering micro goals which will help you achieve your main goals, such as learning about specific property markets or investment finance methodology.
“By writing down individual steps, you’ll be able to visually track your progress and enjoy crossing them off as you complete them.”
Step 5: Identify obstacles and how to overcome them:
According to Raj, identifying potential obstacles and ways to overcome them is one of the most important elements of goal setting.
“At inSynergy, we conduct a risk analysis to figure out what is or could be preventing you from achieving your goals.”
Raj says that nine out of ten people inSynergy speak with are in a position to invest (but probably don’t know it), while the remainder have opportunities to increase their taxable income or partner with family or friends to get a foot in the market.
“For most people a true obstacle will be the things we haven’t been able to foresee – such as injury or illness,” he says.
However, risk also comes in the form of rising interest rates. If you aren’t planning for an increase in interest rates, or the eventuality that your interest only loans will revert to principle and interest at some point, you are making a scary mistake.
“We model investments on interest rates of up to nine per cent through the next eight years. It’s unrealistic but we want to make sure the client can still afford their investment if interest rates were to more than double,” Sarin explains.
“We also work closely with client’s financial planners, solicitors and accountants to help you plan for almost any scenario.”
Step 6: Take action:
Once you’ve digested all this information, had all your questions answered and are confident in your plan, it’s time to act.
Cognitive scientist and expert institutional investor, Stephen Duneier, has shown that even small adjustments to your behaviour can help push outcomes significantly in your favour.
In his Ted talk, seen below, he encourages people to take the first steps to achieving your goals – no matter how small.
Ready to take the first step?
To find out what you can achieve through goal setting in inSynergy’s Property Investment Workshop, contact us for a complimentary 60-minute consultation.
Important Note and Warning: This information is general in nature and should not be considered personal tax advice. We highly recommend you discuss these concepts with your accountant, property investment adviser and investment finance mortgage broker jointly to ensure any considered concepts are suitable for your personal financial situation, as one effect of the concept may negatively impact another part of your plan.