New Year’s Resolutions or Just Good Intentions
Posted on January 5, 2007
As each year ends and a new one begins, millions of people promise, pledge, vow, swear, declare, assert or whatever else you want to call it that they will do better in the coming year than they did in the last. Unfortunately, most New Year’s resolutions quickly fall by the wayside, firm goals become good intentions and even these are soon lost as old habits return and with them more of the same behavior that prompted the resolution in the first place. Why? Why are New Year’s resolutions so hard to follow?
Could it be that most people focus on the goal or outcome they desire and not on the behavior required to reach it. I received an email from a young man named Jeremy who wanted me to know that his New Year’s resolution was to buy one investment property each month during the coming year. I wrote back and asked him how many properties he currently owned – a bit of experience would be helpful. Here’s a verbatim quote I pulled from his reply. “I don’t own any yet, but I read your real estate investing book and it seems so easy I don’t think I’ll have any problem accomplishing the goal. My only concern is being able to get financing since I just graduated college this past spring and I’m working temporarily as a waiter until I can find a job in my field.”
Wanting to encourage him without dampening his enthusiasm, I emailed him back and pointed out that most people work 40 hours a week, 50 weeks a year for 40 years and end up with little more to show for it than a monthly Social Security check. I explained that if he only bought one good investment property in the coming year, in 15 years just that one property could very possibly pay him as much or more per month than Social Security for which he would have to work his whole life. I told him not to let a few rejections get him down and to think about what it would mean to his future if he could buy just one property per year for the next 15 years.
The more I thought about Jeremy’s eagerness, the more I wondered how many other people will start the coming year with that same initial passion and zeal that comes with unrealistic goals. Would they become disillusioned later as they learn that most success, financial or otherwise requires a lot of patience and old fashioned common sense? Most people would agree that while Jeremy’s goal of buying 12 properties in a year when he has no experience and is without permanent employment may be possible, but it is highly unlikely.
I received Jeremy’s first email a little over three years ago and we have since corresponded several times. I’m happy to say that after urging him to be patient and develop a plan for success, he decided his time during that first year would be more productive if he used it to find steady employment, build up his bank account and learn more about real estate investing. After rethinking his options, he came to the realization that his whole adult life was still ahead and rushing into investments before getting himself established might jeopardize his future more than enhance it.
During that first year he got an entry level position in marketing, which was his field of study and before the year was out he had received a nice promotion and a large pay increase. This enabled him to substantially increase the deposits he was making into the savings account he had started when he was first hired. Within 18 months, he had saved over $10,000 and was ready to start investing. Today, Jeremy owns the small home where he lives plus two rental houses and he is well on his way to building a healthy stream of rental income. He has learned a lot about investing and today he looks back at that New Year’s resolution to buy 12 houses in 12 months as a goal that would have frustrated and discouraged him had he attempted it. Three years have passed and today his goal is very realistic. He wants to add three more rentals to his growing portfolio next year, one of which may be the house in which he is now living providing he can find a good deal on a bigger home.
Here’s a tip! The New Year is a great time to set goals, but unrealistic goals are just good intentions and as the saying goes, the road to Hell is paved with good intentions. The problem with most New Year’s resolutions isn’t usually goals that are too big; it’s more often time frames that are too short. When you try to accomplish too much in an unrealistic amount of time, it often results in frustration and depression. Then it becomes easier to ditch the goal than to admit failure or extend the time.
Jeremy started with a large goal, but after thinking it through, he decided to set a series of smaller ones that each brought him closer to achieving the large one. Sure, he had to extend the time, but he didn’t give up on his goal. He found it motivating to achieve the small goals because they let him measure his progress toward the big one. No doubt he would have found it depressing to reach for the large goal and keep coming up short.
When you make your New Year’s resolutions, think of small goals as the stepping stones that let you cross a river without getting your feet wet rather than trying to jump the entire stream in one leap, coming up short and getting soaked. By setting and reaching realistic goals, the coming year can start you down the road to financial freedom.
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