Rich Dad Education Blog

“The size of your success is measured by the strength of your desire; the size of your dream; and how you handle disappointment along the way.” ~ Robert Kiyosaki.

Whether you are a real estate investor, a trader in the financial markets, or an entrepreneur, you have dreams. These dreams may be to retire at a certain age, to make a certain amount of money, or to achieve financial freedom so you can quit your job and work for yourself. If someone asked you what your dream was, little reflection would likely be needed as you know what motivates you to head down your chosen path.

When these dreams are put into goal form, they are usually described in the form of macro goals. For a more complete discussion on macro goals, please read the first few paragraphs in the accompanying article, Goal Setting. There is nothing wrong with macro goals as they are the foundation of your dreams. However, it is a long journey from where you are now to the achievement of your macro goal. In order to accomplish any macro goal in real estate that you desire, numerous micro goals will need to be achieved in order to maximize your chance of success.

In the quote from Robert Kiyosaki at the beginning of this article, he references the disappointment you will encounter in your pursuit of your dreams. The plain and simple fact is the journey to achieve your dreams will likely include many pitfalls and setbacks along the way. Achieving real estate micro goals along your journey can go a long way to maintaining your motivation and, ultimately, to achieving your dreams.

For this coming year, below are some areas to concentrate on when setting your goals for the coming year. There is nothing wrong with setting larger macro goals, but the achievement of these micro goals will help you tremendously.

Power Team – The power team you develop is one of the most important things you will do as a real estate investor, as it is critical to the long-term success and growth of your real estate investment business. Each competent and professional member you add simplifies the real estate equation. Some examples of power team members are: appraisers, contractors, escrow companies, insurance agents, mortgage brokers, private-money lenders, Realtors, and title companies.

Creating a fully operational power team is not something that happens overnight. A good micro goal for this area would be to add one power team member every month. For the more ambitious, you could decrease the amount of time for the adding of a member, but if you accomplished this goal for the coming year, then 12 months from now, you would have an impressive-looking power team.

Analyzing Properties – There is no way around it—to become a successful real estate investor, one must master the art of determining property values. Whether you specialize in rehabbing, wholesaling, foreclosures, or any of the other numerous real estate strategies at your disposal, determining property values is a fundamental skill that must be learned.

The rate in which you can practically apply this skill increases dramatically when you start off with a manageable area to start your evaluations. If you set a goal that states, “I am going to learn how to analyze properties,” then you might not have the focus needed to achieve it. For this goal, set several different milestones to hit in the terms of areas that you will learn.

Your first goal should be a manageable area, often called a farm area, and is likely to be a section of the city you live in. You should then set different milestones that expand this area once you feel you have achieved your first goal. As the year progresses, your knowledge of properties in your area will increase as will your ability to find good deals.

Making Offers – Oftentimes, real estate is a simple numbers game. It is the rare experience for someone to have their first offer accepted. You can scout properties, make fifty offers, and have none of them accepted. The only offer that is accepted in any given time period can come of the first, fiftieth, or fifty first.

Making offers works well with micro goals. You can set a goal that you are going to make 10 offers this week, 100 offers this month, five offers a day, etc. The goal you set in this area is often determined by when you spend your time in pursuit of real estate dreams. For those that spend time every day working on goals, daily goals might work best; for those that work weekends, then weekly or monthly goals may work for them. The key is to be relentless in making your offers.

Education – There are numerous strategies that are used in real estate. Naturally, not every strategy fits every situation or every deal. The more versed you are in real estate strategies, the more likely you are to find a deal that works with your circumstances.

Micro goals that work in this area deal with expanding the amount of strategies you feel comfortable with and the amount of time you dedicate to learning these strategies. If you are not comfortable with the wholesaling strategy, you could set a goal to learn wholesaling in the first three months of the year (perhaps four different strategies is your yearly goal). Then, you could set a goal for thirty minutes to an hour each day that you will focus on studying and learning the strategy.

Learning can be a time-consuming process, but it is amazing the knowledge you can acquire if you do your daily diligence. Take the time to invest in yourself and it will pay dividends down the road.

These are just a few areas where micro goals could be set for the coming year. Take this time before the new year to focus on where you are, where you want to be, and the steps you need to take to get there. Set your dreams high, but also set many of the goals you make this year around the smaller goals needed to achieve those big dreams.

Posted 04:10 PM | Permalink

I recently asked five different traders what their goals for the coming year were, and here are the responses:

• Trader One: Goal was to make $200,000 in the coming year
• Trader Two: Goal was to make $50,000 in the coming year
• Trader Three: Goal was to make $125,000 in the coming year
• Trader Four: Goal was to make $20,000 in the coming year
• Trader Five: Goal was to turn a profit in trading this year.

Each of these trader’s goals for the coming year revolved around how much money they wanted to make. This is hardly a surprising revelation as success in the financial markets is determined almost exclusively on the amount of money you make trading. The amount of money you make in the course of year can be defined as a yearly macro goal, and while there are benefits to this type of goal setting, there are certainly drawbacks as well.

The benefits to large financial macro goals relate to the accompanying article on goal setting. Making money for the financial markets trader is the dream that provides the motivation to do the necessary work each day. Few people would spend the countless hours of research and methodically following a trading plan if it weren’t for the goal of acquiring money. This dream in a real way provides the fuel necessary to do the required work.

However, perhaps unlike any other field of investing, macro goals in financial market trading have their drawbacks. Let’s say a trader has the goal of making $120,000 this year, or $10,000 a month. Because traders are numerically inclined, they usually know where they sit in relation to their financial goals. If they fall behind in their goal projections, there can be an inclination to try and catch up. If the year or month starts slow, there may be the temptation to enter trades that do not fit their trading rules, and that is when a trader enters a gambler’s mindset. Anyone that has ever sat at a blackjack table knows the feeling of trying to get back to even, or saying that they will leave when they are $100 ahead. The mindset traders have is very similar to this when they chase monetary goals. This can easily avoided if the trader applies the proper discipline, and follows the trading rules that he or she has set up.

Along this line of thought, when setting your micro goals for the coming year, absolutely do not quantify the amount of money you want to make each day. It is far too common for traders to say they want to make $100, $300, $500 a day. This is perhaps the worst type of goal you can set for the coming year. Macro goals can serve as motivation, but quantifying daily micro goals can too easily put you in a dangerous gamblers mindset.

Instead of monetarily quantifying your financial market micro goals, focus on areas that can productively help you in achieving your larger macro goals. Here are a couple of micro goals you can set for the coming year:

Discipline. If you don’t have it, acquiring it should be the top goal you set for the coming year. Simply setting a goal of acquiring discipline is far too abstract to be useful, so break it down into a couple of areas. First, if you have not written down your trading rules, do so. If nothing else, this will serve as a valuable review, and give you something to contemplate. If acquiring discipline is a priority, then make a goal of reviewing your trading rules on a daily basis. Set aside ten to fifteen minutes before each trading session to review the rules that you have set for yourself. This will be time well spent.

Keep a Trading Journal. Set, as a goal, to develop a trading journal that will track all trades you enter. Write down not only the parameters that went into make the trade (entry price, exit price, etc.), but also a quick note on your thoughts about the trade before you enter it. This can be valuable information later on.

Expand Your Trading Network. Too often, traders sit isolated from the world in their virtual world of numbers. Finding other traders can be a valuable source of information and someone to talk shop with. A simple goal could be to add five people to your network this year.

Review Each Losing Trade. A goal for the coming year could be to set up a methodical process for reviewing any losing trades you make. Set aside time each day or week to review your losers to see if all rules were followed, and if there was anything that you might have missed that you can learn from.

These are a few micro goals that you can set as a trader for the coming year. Traders come in all degrees of desire, but making money is the ultimate goal. Don’t forget about the process of making money, and don’t set goals that can lead to the gambler’s mindset. Structure your trading, and success is far more likely. My personal macro goal for the coming year is to not make a single trade that does not follow the rules I have set. I am pretty sure if I accomplish that goal, then the monetary goals will follow.

Posted 04:03 PM | Permalink

“I am successful because I am driven by my dream instead of my circumstances. Focusing on my goals helps me overcome disappointment and enables me to accomplish what I set out to do” ~ Robert Kiyosaki

Dreams are perhaps the most powerful force in the world. They provide us the image of what we can be, and what we can accomplish in this life. No matter how dire the circumstances we find ourselves in, dreams allow us to escape the moment, and project our future self and our future surroundings. This is what I believe Robert Kiyosaki is talking about when he refers to being driven by his dream rather than his circumstances. No matter what negative forces may be occurring on any given day, a person's dream provides the force and motivation to work through the setbacks that may be occurring.

When dreams are put into quantifiable terms, they usually are described in macro terms. Some examples of these dreams include becoming a millionaire, retiring by 50, becoming a powerful member of industry, or becoming famous. These are all examples of dreams that many people have that serve as the foundation of their motivation. These dreams are why we put in the extra time, and why we skip out on many pleasures others partake in.

While these dreams may serve as our proverbial coffee each day we wake up, they provide little direction on our day-to-day activities. Our dream may be to make $10 million or retire by 50, but this macro goal will be little more than a dream if the necessary action does not accompany it. During the course of our daily, weekly, and monthly activities, smaller micro goals are needed in order to accomplish the tasks necessary to reach our dreams.

Thus, when setting goals, two sets are needed. Your large macro goals, retiring early or making money for example, require little initial thought as they are likely innate. You know what motivates you and what you want in life. If you have not set large macro goals then you should take the time to do so. Write down where you want to be in 5, 10, and 20 years, and what you want to accomplish. Take a few minutes at the start of each day to look over or think about these goals, as this will provide the passion and energy to excel every day.

After you have set your large macro goals, turn your sights toward the smaller micro goals that will allow you to succeed on a daily, weekly, and monthly basis. Most of your goal setting for the coming year should revolve around these micro goals. This process of goal setting can be much more tedious than macro goal setting. It is enjoyable to think about being retired on a beach one day, and far less enjoyable to think about the methodical tasks that are often required to achieve that goal. Yet, success in achieving your micro goals is often the difference between success and failure in your macro goals.

Micro goals come in many forms, and many of them revolve around the business activity that you are involved in. Real estate, the financial markets, and other entrepreneurial activities will all have various goals that you can set that will increase your chance of production and success. In setting your goals for the coming year, take an ample amount of time to identify the areas that will lead to success in your given field. Much like setting your dreams big, do not be afraid to make lofty goals in your objectives. Anyone can make one offer in real estate or put one stock on your watch list each month. Dream bigger, and require more out of yourself.

It is important to avoid goals that are too abstract. A common goal, and problem, that many people have is organization. If your goal is to become organized in the coming year, what does that entail? How can you measure that goal to see progress and success? A better way to approach this particular goal would be to identify the areas you are unorganized (i.e., an unorganized and messy desk). Then, state as a goal that you will spend X amount of time each day working toward your goal, or set a specific and achievable goal each day, such as clearing off your desk before you go to bed each night. Make the goal a quantifiable goal so you can chart your success.

Here are a few more examples of general micro goals for you to consider in the coming year. The list is far from inclusive, but should give you an idea of what areas you may want to consider in setting goals for the coming year.

Time Management – This is a common and serious problem for many. In order to maximize your time, it might be useful to set your goals in this area around blocks of time used. For example, one goal might be to set a morning routine in things you accomplish the first thirty minutes or hour of each day. This allows for a productive start to the day, and sets the right tone for the remainder. Another goal might be to set aside a certain amount of time each day (or weekend) that you devote exclusively to the area or projects you are working on.

People Skills – Communication skills and remembering names and birthdays are just a few topics in this area. Set a goal to send birthday cards to every person on your list. If your work involves dealing with people, then set aside a certain amount of time each day to work on developing your people skills. Don’t be afraid to look in the mirror—literally—during this time in order to practice the art of communication. The difference in many business deals can often hinge on what they think of your personally, so 10-15 minutes each day may be time well spent.

Knowledge – Information is power in today’s society so there is nothing wrong with acquiring more of it. Dedicate a certain amount of time each day to learning more about your business area, and the factors that will lead to success.

These are just a few of the many micro goals you could focus on in the coming year. If you spend the time to think about what you want to accomplish in the coming year, and then work each day to achieve them, your larger macro goals have a much higher chance of becoming reality.

Posted 03:56 PM | Permalink