Setting a strategy, goals, and plans

I’m going to be unpopular for a few minutes. You’re not installing systems in your business when you get organized. You’re defining and developing processes. Systems involve automation like computation, analysis, or decision-making. Is it a big deal? No, but words matter as they shape our mindset.  Similarly, plans are not strategy, a strategy is not a vision, and yes the difference matters.  A strategy is an overarching path or series of plans towards a larger, overall aim…a vision.

If you understand what your future end state is (vision) you can build a path towards it (strategy) that has multiple ways to get there (plans), which along the way can have milestones (goals). Recognizing the difference will help you truly decide your future and progress toward greater success.

I’ve seen some people post their goals of “XXX units” or “$xx million” in property. I appreciate that people have taken the time to define something, but those type goals always left me wondering why that amount, why not $1 more or 1 more door? Sure they have plans to tackle those vast amounts, but what is the vision? Perhaps they have those as goals to support a good retirement or financial freedom – how are they defining that? If you’re solely focused on achieving the goal of “XXX units” do you really know when or why you’ll stop or will you buy a deal poorly in pursuit of the larger quantity?

If all you have is a plan or list of goals that is great and you’re working towards something with focus. Consider this however: often our plans are focused on the near-term and not on the underlying, driving force. Currently, the a leader in this thought pattern is Simon Sinek and with his book, Start with Why. The premise is to find and use the driving force (why) before focusing on the output or function (what) or process to accomplish it (how).

You should also consider how your goals may be inter-related and remain relevant to your vision. Ensuring goals tie into your larger strategy helps you define their importance and relative priority. Additionally, laying out your goals can enable sequential planning, especially if goals are achieved faster than outlined. Defining an end state in the long-term enables efforts to be focused. Outlining a strategy to achieve that end state can help you break down the overarching goal that may seem unachievable into a series of tasks that are simpler.

This post is a bit lofty, so I’ll attempt to illustrate with our example.

End State: Retired, working at my leisure, financially free with an annual budget of $150K passive income while leaving an estate worth in excess of $2M to heirs.

Our Why: We desire to be able to spend more time outside working on and enjoying personal endeavors than inside, tied to a desk.

Strategy: Acquire means via business ventures, retirement investing, insurance, credit, and saving to achieve end state

Plans: Main lines of effort with some definition

• Invest in real estate
  • Personal property – until they change tax law its in the benefit of the buyer to own property
  • Investment properties as rentals
    • Commercial
    • Multi-purpose (commercial first floor, apartments above)
    • Multi-family (large buildings/communities)
    • Single-family homes
    • Multi-family (small)
• Contribute to tax sheltered retirement accounts – hold off as long as possible before tapping into these sources
  • IRA
    • ROTH – as available due to income thresholds
    • Traditional – should ROTH be unavailable, look to re-characterize later
  • 401K, TSP, etc.
• Insurance – seek to balance risk with proper allocation of insurance
• Credit – a tool to be used prudently, look for programs that offer benefits (hotel, travel, etc.) that we prefer to reduce future bills via rewards programs
  • If you weren’t getting a discount by paying with cash then why wouldn’t you get some type of benefit?
• Saving – even more as interest rates climb, used to plan for future purchases to enable use of credit for benefits to maximum
  • Taxes - what changes can we make (tax-sheltering) that can increase our ability to save

• Second career
  • Own a franchise?
  • Work for a corporation
  • Hobbies - can I find a way to get someone to pay me for what I enjoy doing?
• Pension – while it can be taken away we’re currently using it for planning purposes

To paraphrase John P. Kotter, from his book Leading Change, your vision needs to be feasible, focused, flexible, and ultimately communicable.  While the plans may change or additional goals come to fruition, the desired end state for us most likely won’t change. We’ll continue to analyze our “Why” to ensure it still applies and defines what we’re seeking. We’ll refine our efforts to ensure focus remains on the end state and not only a milestone on the path.

In the end, does it matter how you define these terms? Perhaps not, though regardless of title, you need to define something and then reflect on why you chose that goal, plan, or strategy.