Setting Goals: Lessons from My Nine-Year-Old

My son, Ty, has saved up about $500 – mainly from birthday gifts and, more recently, from helping with projects around the house. He keeps his savings in a kid-friendly financial app that teaches about spending, saving, giving, and even compound interest.

Recently, he shared an ambitious goal with me: To save $1,000 before he turns twelve. To him, this felt massive – doubling his savings in just over two and a half years!

As we discussed his goal, a light bulb went off in my mind. Ty established this goal based on what he has earned and achieved in the past, not considering his newly acquired skills or future earning potential.

When we broke down the goal, Ty began to see that his new skills in reading, writing, math, and his ability to take on more complex tasks (like cleaning trash cans or mowing lawns) could help him achieve his goal much faster than he initially thought. It was clear to me that his short life and limited earning potential were far from a linear path.

Self-reflection hit hard. How many of my own goals have been set based on my past achievements and experiences? The answer was startling: nearly all of them.

I went for a run and started thinking about setting goals based on future skills, resources or situations. It felt different.

This concept might seem basic, but here’s the notes that came out of trying to set goals based on future circumstances (not past circumstances):

• Aim higher and then work backwards: Don’t work from the past, but start from a nearly impossible high point in the future… and then work backwards. This helps in creating a clear roadmap, unbiased or hindered by past experiences.

• Identify areas where you can go all in: Evaluate the aspects of the goal where taking significant risks could yield insanely high rewards. The internet seems to be all about the concept of making asymmetrical bets, or wagers in which the downside is small but the upside could be enormous. Make a lot of these bets.

• Identify who has done it: Ask. In my experience, people who have done it love to help those who are hungry and ambitious. Talk to them and firm up what it is you want to achieve. 

That’s it.

Pete

//

Follow Pete online at @peteyboardman