A lot of people put off investing and saving because it can be so frustrating to just get started. Let’s face it. If you earn 10% on $1,000 that took you a year to save, you only gain $100 extra dollars for all that hard work to save up $1,000. If you can focus on small goals or set milestones for yourself though, it will make investing a lot easier. Instead of focusing on the end goal it may be easier and more productive to try to save the first $1,000, then $5,000, then $10,000, etc… Eventually you can make monthly or yearly income goals.
Let us say that your dream goal is to retire with $1 million dollars hypothetically. If you started off focusing on that then it will seem as if you are moving at a turtle’s pace towards your goal. What I do is set mini goals or milestone markers. This helps with satisfying my expectations. When I reach a goal I feel accomplished! You will never have satisfied expectations along the road to $1 million if you do not set milestone markers for yourself. Like I said, set your goal to save $1,000 then keep moving the bar up. Once you reach $100,000+ you can start to make monthly or annual income goals such as $1,000/month and eventually $10,000/month. I remember the first time I had 12 consecutive months of $1,000+ in income thrown off from my portfolio. It happened without me even noticing. I was so focused on my other mini goals that before I knew it I had a self-sustaining stream of income. When a person reaches this point, it is extremely satisfying! The point when your portfolio starts producing meaningful income to you is a great moment. No longer are you earning $100 from your 10% return on $1,000; you are now earning $25,000 from your 10% return on $250,000. Before you know it your portfolio may end up churning out $10,000+/month, and at this point most people could retire comfortably.
Investment goals shouldn’t be viewed as one towering endpoint that is astronomically far away. Make goals that are reachable within a year. Keep moving the bar up, keep challenging yourself. If you don’t reach a goal, you can sit down and figure out why not. This gives you insight as to what you may be doing wrong whereas if you didn’t set mini goals you may not have noticed any flaws in your investment approach. The endpoint and ultimate goal of investing for every individual is important no doubt, but the journey to get there can be a lot more satisfying if you continuously challenge yourself to meet mini goals. It will also positively reinforce your investor mindset and keep you on track. It is what I have always done, and it has helped me tremendously.