♪ California's top casino and entertainment destination is now your California to Vegas connection. Play at Yamaha Resort and Casino at San Manuel to earn points, rewards, and complimentary experiences for the iconic Palms Casino Resort in Las Vegas. ♪ Two destinations, one loyalty card. Visit yamaha.com/palms to discover more. Hey radicals, before we start the episode, quick reminder that I am running a flash sale for Cyber Monday at radicalpersonalfinance.com/store.

Use the coupon code cyber50 to receive 50% off all of my premium courses available at radicalpersonalfinance.com/store. Coupon code cyber50, cyber50. In addition, all consulting work that is booked by the end of the day Monday, midnight Monday, by emailing me joshua@radicalpersonalfinance.com, I'll give you a 30% discount. My hourly rate, I'll discount it from $300 per hour to $200 per hour for personal coaching and personal consulting work.

Email me joshua@radicalpersonalfinance.com before midnight on Monday. Welcome to Radical Personal Finance, a show dedicated to providing you with the knowledge, skills, insight, and encouragement you need to live a rich and meaningful life now, while building a plan for financial freedom in 10 years or less. Today on the show, we continue our series on how to set financial goals.

I introduced this series yesterday, gave you some fairly big picture ideas, encouraged you to dream, not to be scared of dreaming, no matter what, to pay attention to your goals, your dreams, so that you can get more clarity on the things that are actually important to you, talk to you about how important it is that you follow your goals, 'cause you don't have to pay the price in advance, and I ended with a point where I said that the clearer the goal, the easier the plan.

And today I wanna home in a little bit more on the importance of clear goals, especially as it relates to finances, because the process of setting financial goals is in some ways similar to other goals, but in other ways, it's very different. And the reason is, money doesn't actually matter.

What matters is what the money is used for. And frequently I find that people have financial goals that they have simply not considered. They've set a goal, but they haven't considered why they actually need a certain goal. If you were to go way, way back in the archives of Radical Personal Finance, back to Tuesday, August 26, 2014, and listen to episode 48 of the show, you would be listening to a podcast titled "Why You Should Probably Lower Your Financial Goals." It was one of the more popular episodes of Radical Personal Finance at the time, and one of those episodes that I received a lot of feedback from listeners on, who shared with me how impactful it was on them.

And in that episode, I talked about why so many people set big financial goals without actually stopping and figuring out what those goals would mean, what they would represent. The examples I use, people said, "I wanna save $5 million." And they don't actually know what $5 million means. They just simply know that it sounds nice, it's a nice round number.

And I talked about how important it might be for some people to lower their financial goals. Because the higher you set your financial goals, the bigger the price tag of those goals. If you set a target net worth number of $5 million, "My goal is to save and accumulate $5 million," there's going to be a significant price to pay for that, and that price might be too high for you.

Additionally, when you set very high goals, you may need to, in order to accomplish those goals, develop very aggressive plans, and those aggressive plans can wind up costing you. The higher your goals, the more risk you're gonna need to take on with your plan, and it may be that taking on additional risk is unwise.

And so I talked about the importance of actually charting out your goals. Well, today's show is different on that theme, but I encourage you, go back and listen to this. Episode 48, what I'm talking about is not new. I've been talking about this ever since I started the show.

2014, at this point, was when that episode came out. But financial goals are different because money doesn't actually matter. It's what the money can do for you. Money has no value. And so thus, setting financial goals is kind of stupid. Who cares if you pile up stacks of cash?

Who cares about those digits on the computer? You don't actually care about those digits on the computer. You don't care about those little pieces of paper, except to the extent that you care about what those pieces of paper can buy. You know, I keep a collection. I did a show on how the Venezuelan crisis that I've done quite a bit of work in over the last year and has affected me.

I keep a stack of Venezuelan currency. My kids play with Venezuelan currency. Church meeting on Sunday, my son's got a big wad of money in his pocket. I had to lean over and ask him, "Is that Venezuelan money in your pocket or local money?" And he said, "It's from Venezuela." It's just totally worthless.

The kids play with it, they crumple it up. And it's so kind of weird for me to see just money floating around, but yet it drives home the point of how worthless currency is if it loses its value as a means of exchange. You know, we all know that with paper currency.

The only value that paper currency has is simply if people are willing to accept it in exchange for goods and services. The value is all entirely subjective. It's in your head. That's why the Venezuelan money is worthless and the Euro is not. If you saw a pile of, you know, I didn't even bother to stoop down to pick up the money floating around my floor 'cause I knew it was worthless Venezuelan money, but you can bet your Euro that if I would look down and saw a stack of Euros just fluttering around down there, I would be scooping those things up.

So the money itself doesn't matter. And so when you set financial goals, if you're actually gonna achieve something, the only way to put power behind your financial goals is to know what that goal represents. And as with any goal, if you can know what a goal represents to you, you know your why.

And if your why is powerful enough, it'll pull you through to the goal achievement. Best example I've ever heard of this comes from years ago. I mean, years ago, I taught Dave Ramsey's Financial Peace University. And at the time, I don't know if he still does it, he used the example of paying off debt.

So he used the example of paying off debt or saving money. And he was talking about the importance of why on your financial goals. And the question that he asked, and this is so deeply powerful to me, I've asked it to hundreds and hundreds of people. But the question that he would ask to people is he would say, could you say people who are broke, in debt, no money, and say, could you save 10,000 bucks this year?

People say, no, I can't save $10,000, I'm broke, I'm a dad, don't make much money, I can't save $10,000. And you say, well, tell you what, what if your son was diagnosed with a serious illness? And that serious illness was guaranteed to kill him one year from today. But the amazing thing is that there's actually a miracle cure that is available for this illness.

There's an injection that you can buy. And if he receives this injection, he'll be saved from this illness no matter what, guaranteed. Problem is this injection costs $10,000 for a single injection. And the company that makes it doesn't accept health insurance, they don't give loans, you gotta make sure that you actually pay for this thing.

So the question is, could you in the next year, save $10,000 in order to buy this life-saving medicine for your son? And of course, when you frame the situation like that, every single time, you're gonna say yes. And we could make it any price tag, we could make it $10,000, we could make it $100,000, we could make it a million dollars.

Getting to the million dollar realm, it's harder for some people to save that money, but they could steal it, they could borrow it, they could fundraise it, they could come up with the money some way. But when the why is powerful enough and there's enough emotional energy, then the how quickly presents itself.

And in fact, you don't even have to solve the how. If I gave you that as an intellectual exercise, I said, how would you come up with an extra $10,000 this year to save life of your son? You'd have dozens of plans and you'd have backup plans in case the first few dozen plans didn't work because it's that important.

And so that's the key with setting financial goals is you have to understand the why. If there's a big enough why behind a goal, you'll make it happen, you'll figure it out. But financial goals in and of themselves don't have any emotion, they don't have any why, which is why they're often not reached.

I'd like to save $1,000 this month, why? I don't know, sounds good, I know I kind of feel guilty 'cause all these crazy personal finance podcast people say, gotta save money. Well, if you don't actually care about saving money, you're not gonna do it. Why is it that the average American, that half the American population can't put their hands on $1,000 cash?

Why? It's not 'cause they don't have the money, it's 'cause they don't care. It's 'cause it's not important to them. Nobody has either ever made the image of what it means to have $1,000 saved so attractive to them that they really want it and build up that desire as to what it would mean for them, or no one has ever ramped up the pain sufficiently to the point where they feel like they need to bother.

So they don't bother. (silence) And as the numbers get bigger and the goals get different, the concept stays exactly the same. So accumulating money for its own purposes is dumb. There's no point to it, there's no benefit to it. If you're a miser and you're a miser who has 20 gold coins buried in mason jars around your house versus a miser who has 40 gold coins buried in mason jars around your house, nothing about your life changes.

You just have double the amount of gold coins. The gold's gonna sit in the ground, the jars are gonna get rusty and it's just gonna sit there. Doesn't do anything for you. Money that's still, that's static, no matter the form. Gold coins in your backyard, pieces of paper in your wallet, digits on your computer, tracking software.

Unless the money has a job, unless the money has a meaning, unless the money has an impact, it's pointless. So when you're setting financial goals, the magic secret to setting good ones is to focus on the why. What does this mean? Now in coaching, when you study how to be a good coach, one of the things you learn is to help people dig into why.

Why do you want this? And it can kind of be a fun game that my two-year-old plays with me constantly. Why, Daddy, why, why? We can go eight questions deep. But somehow we, most of us adults have lost that two-year-old why question. But yet it's really useful. I'd like to earn $100,000 this year.

Why? Well, 'cause it sounds good, not gonna be very powerful. Or because it'll allow me to start a business that I wanna do. Why, why do you wanna start a business? Because it'll give me freedom and control over my day. And if I wanna sit at home and eat pancakes with my family in the morning, instead of rushing off to the office to be there at the crack of seven, I can do that.

We can follow the train on. Why is this important? Why is this important? Why do you care? Why do you want this? Why do you wanna do that? Money goals should always be articulated in terms of what they mean for you, what they will allow you to accomplish. If I earn this certain amount of income, then I'll be able to accomplish this.

Or if I earn this certain amount of income, it will represent that I have accomplished this. If I save this amount of money, it will represent this. Here's why that's important to me. Here's why I care about that. Here's why I'm pursuing this goal. If you don't know the why behind your financial goals, you won't make progress.

But if you know the why, you might make progress very quickly. As we pivot to part two, because when you know the why, the how might change. When you are clear enough on your why, the how might change. One of my goals in speaking to you has been to talk about the why enough so that you can see how the how changes.

I was so gratified to see a comment from a listener I was talking about the FIRE movement. And I shared the comment on social media. I said, "If you hate your job, FIRE is not the solution. You're just gonna hate your job for longer while you live on nothing, meanwhile just hating everything.

So now you're not gonna have any fun of spending money on anything 'cause you just gotta quit, gotta save money and quit while you hate your job. The simpler solution is go find a better job and then go ahead and save money towards early retirement." For me, it's one of my, I guess, one of my cards that I wanna, drums that I'm gonna beat in this world of the FIRE movement, the current iteration of the financial independence movement.

Because as I see it, it's far more efficient instead of worrying about saving hundreds of thousands or millions of dollars, it's far more efficient to build a life that you're not desperate to retire from. And I was so gratified to see a comment on social media from someone who said that my question of, "What would you do if you knew you could never retire?" was life-changing for a listener who shared that with me.

And I love that because to me, that's the key. What would you do if you knew you could never retire? Start there. Because that how is a lot simpler. I'll use my own story. Back when I was a financial advisor, I couldn't do this podcast because of the fact that I was a financial advisor.

And you gotta deal with the teams of lawyers and the SEC and your marketing speak and FINRA and blah, blah, blah. So I couldn't do my podcast. Now, I had a choice to make. I said, "Well, I could either save a whole bunch of money, "make a lot of money, "do this business the way that I'm doing it, "and save a bunch of money, "become financially independent, and then quit.

"Or I could pursue a different plan." And when I laid out the different plan, I decided that it was far more efficient for me to just quit without having all the millions of dollars saved and go and build a new business than it was for me to spend years working on something that I didn't really care all that much about.

'Cause I didn't really care about having millions of dollars in the bank, except for what the millions of dollars in the bank would represent, which was freedom. But you can either achieve freedom with a high net worth or with an ongoing income, and you can just simply create the income by building a business.

And the only downside that I could come up with to doing what I've done was the fact that I'll never be able to say that I didn't build my wealth from teaching people how to build wealth, which is one of those things where it's not scamming necessarily, but it's always like, "Eh, I kinda wish I was rich before." But why waste years and years just for that?

So if you desire freedom, go and build freedom with some other plan that doesn't require years and years and years of savings. The how for me to achieve, to do what I wanted to do to fulfill my goals became simpler once I realized why I was pursuing a plan.

And there's so many examples that we could use. Once you're clear enough on what you want the money for, you might start to get creative with all kinds of ways that you can accomplish it. Let's use some smaller examples other than just not ultimate financial independence. Let's say you set a goal of saving an emergency fund.

It's a reasonable goal. It's a good goal. I think you should do it. Let's say you say, "I wanna save "three months worth of expenses, 10,000 bucks, right? "I wanna save $10,000 of an emergency fund." Why do I wanna save $10,000 of emergency fund? Well, I wanna have a plan in case I get sick or hurt, can't work.

I wanna have a plan in case I lose my job. What's your current savings rate? I save 500, that could save $300 a month. Well, if your goal is to save $10,000 and you're saving $300 a month, if my podcast math is anywhere correct, you're looking at almost three years of savings to reach that goal, 33 months.

It's a long time. So when you break it down, you say, "Why do I want this emergency fund? "What does this represent?" You may be able to get there far faster through some alternative approaches. Maybe you could minimize the need for higher expenses by clearing some debt. That's kind of obvious, but I talk about, for example, the value of buying the thing that the money would buy, maybe storing some food and water.

If you have three months of food stored in your house that you could live on an emergency, then you can very reliably lower the target amount of money that you need to save by the amount of food that you have saved. And you might be able to save that food from other means other than just in the financial system.

There may be various ways you could plan and say, "Well, I would cut these subscriptions," so you can minimize your need for savings there. The point is simply that there's more than one way to be prepared for an emergency that's not just an emergency fund. Or maybe you set a goal of buying a new car.

That's your financial goal. Well, what do you want the car for? What do you want it to represent? A lot of people buy cars just 'cause they're bored. So if you say, "I wanna buy a new car 'cause I'm bored "and I feel like it'll add a little spice to my life, "are there other ways that I can solve my need "for alleviating boredom?" Maybe instead of buying a new car, we'll take that money and we'll move to Ho Chi Minh City and enjoy Ho Chi Minh City and enjoy using all of the transportation options that are there and alleviate our boredom in a more efficient way, or perhaps a more pleasurable way, not saying it's cheaper.

And again, my big financial goal, I wanna retire. Why? Well, because I hate my job. Isn't it better to just substitute a career that you don't hate, change your job out? Because once you do that, all of the financial numbers can change. Yesterday I was doing coaching calls. I have a handful of private clients that I work with on an ongoing basis.

They're all entrepreneurs. So I do coaching calls on Monday morning. And I was working with clients and we were running the numbers on one guy's situation. And this client is in a decision point because he's running a very big business. It's extremely profitable, millions of dollars of income and value and extremely profitable.

But the question is, do I wanna get bigger? Doesn't need the money, already has more money and more income than he's ever gonna spend. Frugal guy, doesn't need the money. And so the question comes down to, should we keep building? Should I keep growing? I could pull back, put everything on to autopilot, just coast, make the money, save the money.

He's never gonna spend the money. The money is just gonna be given away when he's dead anyway. So should you just coast and live the good life or should you keep building? Should you go to tens of millions and hundreds of millions of dollars instead of just a few million?

The only way to answer that question would be why? The money itself becomes immaterial and it becomes a matter of what the money represents. And I find that really exciting because what money represents is some really exciting stuff. For example, I've got really big, I've got really big income goals personally.

I don't know how long it's gonna take me to hit them, but I'm really committed to them because of what it represents. First, of course, what I can do with the income and what that represents, but also what it represents for me, for my personal development, for my self-actualization, needn't abuse the hoity-toity term.

Right? For me to generate millions of dollars per year of income requires me to affect hundreds of thousands of lives positively. That's my goal. And one of the ways that I can measure that is through income. It's not the income that matters, it's just money. I'm not gonna spend it.

I'll save it, I'll spend it, save it, whatever. But the point is, it's just money. But what the money represents is world change. What the money represents is families changed, which is one of my most important things. And it's the same thing for you. What the money might represent is you conquering your laziness.

What the money might represent is you conquering the bad start you got in life. What the money might represent is you conquering your self-discipline. Might represent any number of things. But once you understand what the money represents, then you have a goal that has power and it can pull you forward.

So let's close it out today with two words. Why do you care about the goals that you're setting? And then how can you accomplish what you care about in a really effective way? Simple example. And I use me because of course you're listening to me. I feel bad always using myself, but I know myself better and I figure you know me pretty well, and so if I use examples that you know, you'll understand those examples better than me just using anonymous people all the time.

Thank you to so many of you who participated, bought my courses, booked consulting with me, with the Black Friday, Cyber Monday, big sales I've been running the last few days. Thank you, thank you, it's been awesome. Response is outstanding. That money, that large influx of cash represents change. It represents change that I can help people accomplish.

This is why, so my goal, one of the reasons why I do this is because I want to see societies transformed. I wanna see families transformed, I wanna see lives transformed, and I wanna see societies transformed. I wanna see families stabilized, I wanna see people in stable situations so they can raise stable children so that our society grows and is better, et cetera.

That's one of my missions. And I believe that when you make wise financial decisions, that can overflow into other areas of your life. It has a ripple effect to other areas of your life. And so there are many ways to do that. But in order for me to grow my business, my impact, I have to invest in the tools and the people, et cetera, to grow that message.

And so the income is great. It's been a very profitable weekend, which is awesome. But what that profit represents is additional impact, additional change, additional products, additional services, additional insight, additional message that reaches more people, and they'll have a ripple effect because every person that I affect reaches out and that ripple effect goes on.

We're all people pebbles tossed into a pool. So every ripple I create in turn will ripple you. So in unison we ripple, a type of ripple rhythm, but we need to ripple in a way that benefits our living. And so the money funds that expansion of the ripples. That's why I care so much.

This year, this coming year for me, 2020, I am dedicated. You are gonna hear me sell so much stuff to you in the next month and this year, again and again and again. Because the conclusion I came to was I will fail at my goal of impacting more people if I cannot build the infrastructure needed to do that.

And because I've been so lazy about sales and so half-hearted about sales and I've tilted at all these windmills of wanting to do things without conflicts of interest and whatnot from all years in the financial advice business, I've wasted time. So the money represents for me. So whatever your financial goals, think about them, write them down, clarify them, and then ask yourself why, why do I want this?

And then the how, lots of ways to do the how. And there's lots of efficient ways to do the how. More examples in days to come. Thank you for listening. Thank you for your business this past weekend. Be back with you soon. Thank you so much for listening to today's episode.

I hope I helped you with some ideas and some encouragement and inspiration to help you achieve your goals faster, living a rich and meaningful life now while building a plan for financial freedom in 10 years or less. As we go, three things. Number one, I teach a number of premium courses found at radicalpersonalfinance.com/store, courses that I have designed and written to help you solve some specific problems.

Go and check those out at radicalpersonalfinance.com/store. Those courses contain ideas and strategies not otherwise released here in the free podcast, and you can find those at radicalpersonalfinance.com/store. Number two, I offer a limited amount of private consulting and coaching work. If you'd like details on how to talk to me privately regarding the details of your specific situation, email me joshua@radicalpersonalfinance.com, and you will be able to get in touch.

I'll share all those details. Joshua@radicalpersonalfinance.com. Number three, catch up with me around the web, Facebook and YouTube, I'm at Radical Personal Finance, Twitter and Instagram @JoshuaSheets, S-H-E-A-T-S. Follow me on those platforms if you are active there for some additional content not found here in the podcast. Thank you so much.

- Sweet Hop is an online marketplace curating the best in premium seating at stadiums, arenas, and amphitheaters nationwide. With Sweet Hop's 100% ticket guarantee, no hidden fees, and the personal high-level service you expect with a premium purchase, you can relax knowing you'll receive the luxury experience you deserve. Visit sweethop.com today to book your premium tickets to your favorite teams, artists, and all the must-see live events to Sweet Hop around LA.

S-U-I-T-E-H-O-P.com. It's more than just a ticket.