The Rule
Successful people are people who plan. The duration of planning to be successful might not be quick. It could take 1 year, 5 years, 15 years and even 30 years. No matter how long it takes for the plan to be successful, if by the end of the planning period you achieve your target, then all the hard work put into the planning is worth it.
What is this rule?
This rule stresses on the importance of planning to achieve your target. Be it a 5-year plan or a 10-year plan or even a 30-year plan. Having a plan is much much better than not having a plan at all. Planning is also a great way to reduce your expenses. As explained by the great businessman Jean Paul Getty, he bought the strawhats during the fall, when they are low in demand and inexpensive and used it during the summer, when they are high in demand and expensive. The same idea can be applied by us. Why not list down all the things that you need in the current year and buy them during the sale season when they are cheap? You could even buy the things that you need for the next year during the festive season of this year when all the shops are offering special discount.
How to implement this rule?
First, you must have a target. Your target might be a simple target such as ‘I want to be financially independent by the age of 45”. Next, you need to have a plan on how to achieve your target. You can always break the long term target into smaller short term targets. Once a plan has been established, you need self-discipline to follow-through your plan and change your plan accordingly if necessary to achieve your target.
I propose that you set up a yearly target for yourself whether physically, financially, intellectually or socially. The target has to be attainable and within a reasonable time frame. From the target, then you can chart out the plan of work to achieve the target.
So, I presume that the things on the readers mind right now is what kind of target that you can set? Well, I could suggest a few targets that the readers could consider. For example physically, the target could be to achieve the ideal Body Mass Index (BMI ) weight by the end of the year. From this target, a plan should be set up in terms of the number of exercises required per week or a diet plan. Financially, perhaps you could target to have your net worth to increase by 20%, or you could target to have extra income through a business venture by the end of the year. Intellectually, how about reading a book every month for this year? Socially, how about getting to know one important person in that year? These are just examples on the target that you can set. As long as you set a target that will improve yourself in whichever field, then you are on the right track.
A target is not necessarily set within a year’s time frame. You could even set a weekly target and a daily target for that matter. Example of daily target that can be set is you want to spend one hour reading a book everyday. The hardest part of planning is not in setting up a target or setting the plan to achieve your target. The hardest part is in having the discipline to follow through with your target. One of the ways to keep your determination in following through with your plan is to think on the result rather than the work. If your target is to reduce your weight, think how attractive you will look with the extra weight gone and don’t think on the hard work of exercising and dieting to achieve your target. Perhaps the most difficult part with a plan is to enforce you to actually follow through with it. You need self discipline in order to do it and without any direct pressure on us it might be difficult to follow through with your plan. You need to find that one important reason why you want to achieve your target. If your target is important for you, how about making it your mission in life? You need to look deep inside yourself and find that key reason why you want to achieve that target.
The other method in following through with your target is to write it down. Write it big on a piece of paper and put it up where you can see it everyday. Read it daily until your mind and body is convinced to achieve that target. Read it daily until it burns in your subconscious mind, then your body will automatically work to achieve that target. I also used this technique when I started to feel difficult to continue writing this book. I write my target in big letter on a piece of A4 and I stick it on the wall in my living room. You can also motivate yourself to achieve a target by listing all the benefits that you can get if you achieve that target. Print the list and read it everyday until your mind is convinced the reward of achieving your target far outweighs the hard work in accomplishing your target. When that happens, your body will automatically geared to work and achieve your target.
As a suggestion on the long term target, consider this fact extracted from the News Straits Time dated 12-March-2007:
‘HOW much does one need for a life of comfort in retirement? Financial planners differ on this, coming up with figures ranging between RM1.4 million and RM2.8 million "This may seem big by today’s standards but people underestimate the effects of inflation over the next 25 years. "RM1.4 million in 2026 is RM639,000 today," says Thechinamoorthy. Malaysian Association of Chartered Financial Consultants president Lim Yan Chang said there was no hard and fast rule about it. "But I should say that RM1.5 million would be the sum an average Malaysian would need to live comfortably in retirement," he said. Citibank Berhad vice-president and head of investment business Danny Chang put it at nearly RM1.6 million. "A person needs RM1,591,979 when he is 55 to last him the next 20 years," he said. U Chen Hock, HSBC Bank general manager for personal financial services, said a person needed RM2.06 million to achieve a comfortable lifestyle in retirement. He said the 35-year-old earning RM4,000 today would have RM500,000 in EPF savings by 55 but would still need to raise another RM1.6 million. "The key for a retirement plan is to analyse when one wants to retire, the kind of lifestyle one wants and how many years are left to retirement," he said. Prudential marketing and communications director Paul Khoo felt that one would need RM2.8 million to receive RM4,000 monthly for 25 years after retirement.’
According to the extract above, we need between RM1.4 million to RM2.8 million to maintain our lifestyle for 20-25 years after retirement. If you take this fact seriously, I suggest you set this figure as your long term target to achieve at the time of your retirement.
The benefit of this rule
A plan will guide you on your way to achieve your target. Without a plan, you are most likely will not achieve your target.
More about this rule
My target is to be financially independent. I have planned this since I started working in the year 2000. This book is part of my plan to be financially independent. Apart from this book, I have other plans up my sleeves. Some were already implemented while some are being implemented and some are still under planning. The truth is if you fail to plan, then you are planning to fail.
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