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Want to Make Your First Million? Don’t Save Every Penny! You Should Spend Money Wisely Instead

Want to Make Your First Million? Don’t Save Every Penny! You Should Spend Money Wisely Instead

Have you ever heard the saying, “You have to spend money to make it?” I have. In fact, I’ve given that cliche statement as advice half a dozen times. While I tell entrepreneurs to spend money on the right team, I never use that advice myself. After all, I’m in my twenties still! I don’t have the luxury of spending money as if I’m made of it!

But these excuses are detrimental. In fact, the idea of spending money to make money is not as dangerous or risky as it may sound. Sure, it seems counterintuitive, but bear with me. I promise it will make more sense soon.

Saving Every Penny You Earn Can’t Bring You to Your Desired Destination

So many people think the only way to save money is to give up their social lives in order to minimize all those “unnecessary” expenses.

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What’s problematic with this approach, aside from how miserable you will be ignoring your friends’ invitations, is that it’s only a short-term way to save money. Think about it: are you really going to stay at home and never come out forever? The goal is to be future-focused; saving every penny and dollar you can is not exactly effective. What’s more important is spending on the investments that can bring returns.

I know what you’re thinking, “But Heather, I don’t know how to invest in general! How will I know how to invest in order to double my dividends? That’s for business-savvy people and those really good at math!”

Not true.

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While knowledge of those things can be helpful, anyone can be an expert investor and spender. You just need a little insight. Plus, we aren’t talking about becoming an investment banker. We’re talking about knowing when to invest your money into something and when to withhold. And it’s easier than you think.

Spending Money in the Right Way Can Help You Generate More Money

Enrich your mind through lifelong learning

This is one of those long-term money-making methods. While some people may find it unfair, the more educated you are via school system, the more desirable you are to companies who are hiring. This comes in handy when discussing salary, because the more experience college or university gave you (even in the form of unpaid internships) the better chance you have at requesting more than you might otherwise feel comfortable.

Even if you’ve left the formal education system, taking classes after work to expand your skill set can make you more popular and competent in the job market in the long-term.

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Prevention is better than cure

Listen, as an American, I know how frustrating health insurance can be. Even now with more access to it than ever, if you are paying out of pocket for insurance it’s a big sum of money! But here’s the thing: if you don’t get insurance because of the price tag, when you find yourself needing to go to the emergency room or even to a doctor’s appointment, you will be paying much more. And that expense will leave you with nothing left over to invest and grow.

When you feel more attractive, you can attract more opportunities

This one is so important, no matter how old-fashioned it may seem. Invest in your appearance. I make a lot of jokes about how much money I spend on quality makeup, complexion/skin products and getting my hair and nails done, but at the end of the day, it’s an investment I feel good about. When I look healthy and feel attractive, I approach people with more outer confidence.

As a disclaimer, this is not me telling you that in order to make money you have to be attractive. No way. What I am saying is that you should feel attractive – whatever that word means to you. If you come off as insecure and weak, it can be difficult to ask for that raise you absolutely deserve, or even get a loan you know you’re capable of paying off. There are (semi-depressing) studies out there that prove this, but if you don’t want to get wrapped up in them, just take my word on this one.

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As a quick example to help put it into perspective, I work for a very casual company (I’m talking yoga pants and blue jeans on the daily!) but when I first interviewed, I wore a suit. I knew the atmosphere was super casual, but I wanted to ensure they knew I was serious and professional. The way you look is the way you brand yourself as an individual. So who are you marketing to, and what is your message?

Set up a website to promote your expertise

Sites like LinkedIn, or even websites boasting your personal domain, can be a great way to up your income. Having a professional image and resume helps people see you as a trustworthy, knowledgable individual they would gladly hire. So if you’re a photographer, make your own website! If you’re a Freelancer, do it too! If you’re passionate enough to make it your career, then prove that to the world through a portfolio they can access 24/7. Learn how to maintain mailing lists, become an expert marketer. We live in a technology age; anything you could need to know is at your fingertips!

When you can’t do everything yourself, spend money to get help

When it comes to investing, and to your life in general, it’s essential to know what you need.[1] For instance, if you are trying to start your own company, your numbers will be in the red within a month if you don’t have the right team. Invest in a brilliant accountant. Invest in the perfect assistant. Have the right marketing team and IT guru. Yes, at first you will feel like you’re bleeding money, but when that team starts working with you and you see the spike in clients and income, you won’t remember any of that initial stress. The same is true when it comes to investing your money. What is it you need? A retirement fund, or a mansion? What is your goal? Once you have the intention set, you can begin to achieve it.

Reference

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Heather Poole

Technical writer

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Last Updated on April 23, 2019

How to Set Stretch Goals and Keep Your Team Motivated

How to Set Stretch Goals and Keep Your Team Motivated

Stretch goals are a lot like physical fitness. When you adopt a physical sport such as running, continual practice leads to increased stamina, growth and progress.

While commitment to the sport improves performance, true growth happens when you are stretched beyond your comfort zone. I know this from personal experience.

For years, I was an avid runner. I ran with a variety of running groups in the Washington, D.C., area and in Columbus, Ohio, where I lived prior to moving to the nation’s capital in 2011.

While I was initially fearful about slacking off on my exercise habit when I moved to D.C., running enthusiasts in the area provided continual motivation, inspiring me to lace up my shoes day after day. Much to my surprise, many of the area’s running stores (including Pacers and Potomac River Running) boasted running groups that met in the mornings and evenings. So, it was relatively easy for a newcomer like me to connect with like-minded peers.

I was never a particularly fast runner, but I enjoyed the afterglow of the sport: being completely drained but feeling a sense of accomplishment; setting and reaching goals; buying and wearing out new tennis shoes. The sound of throngs of feet pounding the pavement in semi-unison is still enough to bring tears to my eyes. Yes, I sometimes tear up at the start of races.

Of all the groups I ran with, the Pacers Store group that met on Monday nights in Logan Circle boasted the fastest runners. I met up with the group week after week only to be the slowest runner. It was difficult to muster the courage to get up every week and meet the group knowing what was waiting for me: sweating and watching the backs of fellow runners.

Each time I joined the group, I was stretching myself without even realizing it. Instead of feeling like I was transitioning into a better running, for a long time I felt I was torturing myself.

Then something remarkable happened. I went for a run with a different set of runners and noticed my time had improved. I was running at a faster pace and doing so with ease. What was once uncomfortable for me I now handled with ease.

The reason I was becoming a better runner was because I was taking myself out of my comfort zone and challenging myself physically and mentally. This example illustrates the process of growth.

Fortunately, we can create situations that stretch us in our personal and professional lives.

What Is a Stretch Goal?

A stretch goal – as authors Sim B. Sitkin, C. Chet Miller and Kelly E. See detail an article “The Stretch Goal Paradox” in Harvard Business Review[1] – is something that is extremely difficult and novel. It is something that not everyone does, and it’s sometimes considered impossible.

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In general, you establish stretch goals by doing things that are difficult or temporarily challenging.

For instance, when I was first promoted to a senior communications management role, I knew I needed to beef up my relationships with media personalities. I set a goal to once a month book a day of media interviews in New York City – which is home to many media outlets, including SiriusXM radio, CNN, NBC News, HuffPost, VIBE.

This was a huge goal because it meant not only identifying the right people to meet with but convincing them to meet with me and my team. While I didn’t end up meeting the goal of doing a full day of media interviews in New York City, I met more people than I would have met had I not established the goal and instead stayed in the comfort of my D.C. office.

It is important to note that just because you establish a stretch goal doesn’t mean you’ll achieve the goal each time. However, the process of trying is guaranteed to provide some level of growth.

The Importance of Creating Stretch Goals

The beginning of the year is a perfect time to assess where you are excelling and where there is room for you to grow. I typically start the year by creating a yearlong strategic plan for myself.

I think about the things that are necessary to do and things that would be cool to do. I assess the people I should know and think through how to meet them. Then I ask myself if the goals are realistic and what would need to happen for me to achieve them.

Over time, I have learned that there are five things I can do to set stretch goals:

1. Get Outside of Your Head

If I exist within the confines of my imagination, I imperil my own growth and creativity.

If I examine my accomplishments and celebrate them in isolation of others’ accomplishments, my vantage point is limited.

I want to be comfortable with what I accomplish, but I also want to be motivated by watching others. In some respects, stretching is about expanding your network of friends, associates and mentors. These are the people who will propel or slow your growth and development.

Since two are better than one, I always value being able to share my progress with others, seek feedback and then map a plan for success.

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2. Focus on a Couple Areas at a Time

When setting goals, it is important to focus on a couple of areas at a time. Most of us are only able to focus on a few things at a time, and if you feel you are unable to tackle all that is before you, you may simply disengage.

I see this in so many areas of life:

When people get in debt, if they believe the debt is insurmountable, they refuse to look at incoming bills for fear of facing down the debt. Unfortunately, many businesses go awry when setting stretch goals.

In “The Stretch Goal Paradox,” Sitkin, Miller and See note:

“Our research suggests that though the use of stretch goals is quite common, successful use is not. And many executives set far too many stretch goals. In the past five years, for example, Tesla failed to meet more than 20 of founder Elon Musk’s ambitious projections and missed half of them by nearly a year, according to the Wall Street Journal.”

Goal-setting is like a marathon, not a sprint. It doesn’t all need to happen at the same time, and pacing is extremely important if you want to get to the finish line. It is better to focus on a couple goals at a time, master them and then move on to the next thing.

3. Set Aside Time Each Year to Focus on Goal-Setting

When I was a managing director for communications for the Advancement Project, I spent the first part of every year facilitating a communications planning meeting.

The planning meeting began with the team members assessing the goals the team had established in the preceding year, and whether those goals were realistic or not. If we failed to meet certain goals, we broke down why that happened. From there, we brainstormed about possibilities for the current year.

For instance, one year we set a goal of pitching and getting 24 opinion essays published. This was audacious because no one on the eight-person team had the luxury of focusing exclusively on editing and pitching opinion essays to publications around the world. We would need to focus on pitching in between the rest of our work.

We hit this goal within the first eight months of the year. Remarkably, in total, we ended up getting 40 opinion essays published that year, which was an indication that our original goal was too low. We upped the goal to 41 the next year, and amazingly, we hit 42 published opinion essays or guest columns.

From this experience, we not only learned what was feasible, we also learned the power of focus.

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When we focused as a team on getting the commentary on our issues out in the public domain, we were successful. The key in all of this is that there was a ton of discussion around which goal we’d pursue and why.

Equally important, as a manager, I didn’t set the goals alone; the team members and I established the goals collaboratively. This ensured buy-in from each individual.

4. Use the S.M.A.R.T. Goal Model to Set Realistic Goals

S.M.A.R.T.

is a synonym for specific, measurable, attainable, realistic and time-bound. For the sake of this article, the realistic portion of the acronym is most important.

While you want to set audacious goals, you want to ensure that they are realistic as well. No one is served by setting a goal that is impossible to accomplish.

Failing to meet goals can be demoralizing for teams, so it’s important to be sober-eyed about what is possible. Additionally, the purpose of setting goals is to advance and grow, not depress morale.

For instance, my team would have been discouraged had I begun the year asking it to pitch and place 40 opinion essays if we didn’t already have a track record of placing close to two dozen essays.

By using the S.M.A.R.T. formula, we were able to achieve all that we set out to do.

5. Break the Goal up into Small Digestible Parts

I am a recovering perfectionist. As a writer, being a perfectionist can be counterproductive because I can fail to start if I don’t see a clear pathway to victory.

The same is true with goal-setting. That’s why I join Lifehack’s fellow contributor Deb Knobelman, Ph.D., in noting that it is critically important to break goals into bite-sized chunks.

When I had a goal of doing daylong media meetings in New York City, I had to think through all the barriers to achieving that goal and all the steps required to meet the goal.

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One step was identifying which reporters, producers and hosts to engage. Another step was writing a pitch or meeting invitation that would capture their attention. Another step was thinking through the program areas I wanted to highlight and the new angles I could offer to different reporters.

Since reporters want to cover stories that no one else has written, I needed to come up with fresh angles for each of the reporters I was engaging. An additional step was thinking through who from my team I’d take with me to the various meetings.

I was clear that, as a talking head, as public relations reps are sometimes called, I needed the right spokesperson in order to land repeated meetings with different outlets.

A final step was thinking through what I needed to bring to each meeting and which reports, videos and testimonials would buttress our claims and be of interest to media figures.

As I walked through what was needed to bring my goal of doing daylong meetings to reality, I realized that not only was the idea within reach, but I was excited to tackle the challenge.

From that point until now, I have learned to break down goals into smaller parts and tackle the smaller parts on the path to knocking the goal out of the park.

The Bottom Line

These are my recommendations for setting stretch goals, and there are a ton of other resources to support you in the workplace and in your community.

For instance, LinkedIn’s Lynda.com platform has a wonderful suite of leadership development videos, including ones on establishing stretch goals. This is a paid resource but may be worth the investment if you lead a team or want to invest in tools for your own growth and development.

Featured photo credit: Avatar of user Isaac Smith Isaac Smith @isaacmsmith Isaac Smith via unsplash.com

Reference

[1] Harvard Business Review: The Stretch Goal Paradox

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