What would you advise Richie McCaw regarding his career and finances if he was your son?
After rugby, he will have to make some big decisions - here is a man with all the attributes and all the options: bright, personable, leadership ability, great network, experienced in the media, etc. Presumably he has plenty of money (he could retire to fly his glider and play music for the rest of his life), or he could join top commercial boards, be a film star, farm or in a couple of years if he wanted, he could be Prime Minister (just joking, John). At 32, the world is his oyster: he could do anything or be anyone he likes.
Most of us do not have the options and choices of Richie McCaw, but we all do have the ability to do three important things: first, we have the ability to decide what it is that we want and to set goals for that. Second, we have the ability to act and to concentrate our efforts on the goals that we have set. Third, we have the time for our goals and actions to bring us what we want. Whatever your situation, you can use these three things for your success.
I have always been very clear that the establishment of goals is the first and most important step for success. Having a goal - whether it is saving the deposit for your first house, repayment of debt, investing or the development of a business or career - gives you the focus and commitment that are necessary to achieve what you want.
Your goals should be numeric and have a time limit on them: e.g. "We will have $50,000 for a house deposit by December 2015". A goal like this gives focus and it is very obvious whether or not you achieve it. You cannot fib or fudge this goal, and if it is put in writing, it becomes a very powerful psychological spur for you to do whatever is necessary to achieve what you want.
However, a goal by itself is not enough. Although there is research to show that goals like this are much more likely to be achieved, there is nothing magical about them - you still have to act.
Until you start to allocate resources in the form of time, effort, and money to the achievement of your goal, dreams remain dreams. Setting a goal narrows down the many options that you have and forces you to focus, but it achieves nothing until you put your resources into it.
In effect, your time, effort and money have to follow your choices - otherwise your goal remains intent and nothing more.
This means that if your goal is to own your first house, you may have to forgo going out to party every Friday and Saturday night; if your goal is to have a career or business, you have to sign up for some courses; if you want to repay your mortgage more quickly, you may have to switch and negotiate hard with lenders. Simply saying what you want but then doing nothing about it means that you were never really serious.
Finally, good things take time and require patience, persistence and perseverance. Some of us have more time than others, of course but most of us have decades rather than years. Remember: we all tend to over-estimate what we can achieve in the short-term but under-estimate what we can do in the long-term.
You can do a lot in a decade or two. When it comes to finance, time is the most powerful agent that you have. Look back a decade to where you were and marvel at the change over that time. The next decade could see double that: double the salary, double the investments, double the debt reduction.
No-one ever said that achieving an important goal would be easy (winning a World Cup on a broken foot probably wasn't easy either). To be honest, it would be difficult to advise Richie McCaw - he has so many options and it might be difficult to identify the one where he has the most potential and give the most satisfaction. However, the recipe for success would be the same for him as it would be for the rest of us: identify the most important goal, act on it by allocating all of the resources that you have and be persistent over time.
Martin Hawes is an Authorised Financial Adviser and a disclosure statement is available on request and free of charge, or can be found at www.martinhawes.com. This article is of a general nature and is not personalised financial advice.
- Sunday Star Times