go on without a goal, but for how long ?

One of the weird concepts presented by this site is that you don't have to have a goal in your personal finance. It would be like an anti good finance practice, as guilty as Rich Dad asking us NOT to save in his Conspiracy publication.

Lets get straight to the point then. If I really don't know what I want in life or always fail to stick to the same goal, does that help if I keep on searching my goals and therefore should do nothing about my personal finance until I find the right goal ?

I think the hint should be clear. There is really nothing wrong or as a matter of fact, much better if you also start saving and save automatically while you are looking for your goal.

You may not understand exactly what Warren Buffet is doing but if you were to just follow exactly what he has been doing, what do you think you will end up with? Well, Berkshire Hathaway investors can tell you that they are very happy with exactly that situation ( at least historically ).

If you have found your goal, congratulation and good for you! Unfortunately due to the way our education system is set up, most of us might just spent our whole lives looking for what truly meant to us. At the same time our lives go on as usual and as real as it could hit us hard. So even if you haven't found your goal, go ahead and ;

• Start saving,
• Save Automatically,
• Save in Fix Deposit,
• Invest in Bond Funds,
• Invest in Mutual Fund using Dollar Cost Averaging.

and if you have dependents, you care about someones or your own future, then buy some insurances too.

MalPF doesn't say you don't need a goal. It says having one goal is better than not having any. And don't procrastinate while you haven't found your goal yet, start some actions. And if you don't know what actions to take before having your own goal, stick to what MalPF gives you, the wealth pyramid.

But there is always a line to draw, differentiate those with goals and those without. If you do not subscribe to Dollar Cost Averaging, stay within Bond Fund and Fix Deposit. If you do not follow some of the stock market investment principals, do not invest in stocks if you don't have a clear goal yet.

So you don't have to have a goal to start something, but eventually you will need a good goal to end great.

A method how to find your life goal

One Goal is better than No Goal

Strategy Cost ?

"Cost" is the money you paid in order to get something you want in return.

"Strategy" can be simplified as the methods you use in achieving a goal.

Strategy cost is the money you MAY have to pay if you use certain methods but NOT necessary ... depends on how it turns out. For example,

When buying shares in stock market, you will have to pay some broker fees, stamp duty and clearing fee etc. Those are the real cost incurred. The way to calculate cost is usually fix, pre-arranged and agreed up front. Putting these fees aside, right after you bought a share at $1.00 the immediate buy back price is usually lower i.e. $0.99. The difference between this buy and sell price can be seen as strategy cost.

You don't really pay this 1 cent. If the price goes up and you earn money, you earn 1 cent less. If the price goes down and you lose money, you lose 1 cent more. So strategically you are 1 cent disadvantage to the market.

Some may say this is future costing. You actually pay this 1 cent but only deducted from your withdrawal at a later date. Although there is nothing wrong to think of it this way especially account wise, but it could be more beneficial to use strategy cost to access which strategy is better in your investment.

Strategy cost shares parallel direction as your investment movement. When you buy a share, you want its price to go up so that you can earn money. The 1 cent difference affects your ability to do that.

Strategy cost may not be fix and is usually depends on situation. If the demand for the share you bought is low, the buy back price could be $0.98 or even $0.95. So buying a low demand share is strategically more disadvantaged to buying a high volume stock. In this case its a comparisons among 1, 2 and 5 cents. No long just a general concept but a measurable comparison.

Since you don't really PAY strategy cost, it is rather vague to talk about it. But strategy cost becomes more useful when you are comparing different investment methods or different situation.

The very recent comparison is between buying something with CASH vs getting a LOAN.

Stock market : Tick Size is a strategy cost ?

Gold Pawning - strategically disadvantaged but not the worst

30% profit is less than 30% lost

How to Buy Low Sell High in all Market Condition

Dollar Cost Average - The easiest way to Buy Low Sell High

Goal ? Just set one ... its better than None

Sometimes back I mentioned one should start saving even without a goal  (old post).  

However, having a goal is still better than having none.

Because the journey is easier

when you think you know

where you are going.

If you really cann't find yourself a compelling goal to pursue for, just set a generic one.  Like you are aiming for $1 million and that could get you ...

1) a good lengthy trip to Mount Himalaya ...

2) build your own winery farm ...

3) shop all over Asia ...

4) etc ...

if you still don't know

just pretend you do

(its called the NLP method)

so you don't have a GOAL ?

I mentioned before even if you don't have a goal, you should still do step 1 and 2 which are compulsory in Personal Finance.  All other steps are optional and subject to discussion, debate and negotiation ... The compulsory steps are;

1.  Earn an Income

2.  Setup an Automatic Saving Mechanism ( ie. Standing Instruction )

That will at least make you a millionaire when you retire. ( millionaire by the time you retire is not as much as what you think know )  Or that will help you 'lost less' by cutting the inflation effect by half !

If you want to move on to 'save more', you will have to have goals.  Else not only you may not 'earn more', you may even lose the firm fundamental ground you have built from step 1 and 2.

However, I am still not going to talk about goal yet.  Let's talk about Life instead ...

First draw a circle to represend your life ...

Then write down all the big events that Should Happen in your life ...  It doesn't matter what they are.  Just write down whatever that comes to your mind now.  They don't have to be correct and you can change later.  But you must write something down !

There you go !  You have a picutre representation of your life !

So next start think about what you like to do with your life.  What you love to do now !  Will you still do it in future ?  What are the things that you wish to do but you are not doing now ?  Start putting them into your Life Line too !

So what's next ?  Good question !  But don't ask me, ask yourself !  What do you want to get out of your own Life Line that you have just drawn.  I started this but YOU WILL HAVE TO ANSWER THIS LAST QUESTION NOW ...

...

Those who don't like circle can also draw life line in a straight line.  It doesn't matter how you draw the line, as long as you write down the big events and what you love to do now and future.

So what does your Life Line looks like and what did you get out of it ?