Introduction Long-term goals will obviously be centered around careers and the amount of money that we need as a corpus at the time of retirement. The acquisition of assets has to go along with such a long-term goal, but the amounts to be saved in terms of cash should be separate and should not be confused with the acquisition of assets.
The setting of any long-term goal will be centered around a) The greatest amount of clarity on each goal b) Plan B and Plan C for attaining each goal c) Having clear short-term goals d) Reviewing each goal once in three years and e) Never giving up on the acquisition of long-term goals.
The greatest amount of clarity on each goal Any goal should be realistic, even if it extends to three decades. For instance, if someone has a net income after taxes of one lakh and forty thousand rupees, as a family, having a long-term goal of a corpus of four crore rupees at the end of thirty years, can be a realistic goal. Implicit in this long-term goal are two vital assumptions. One, the man and his wife would aim to professionally equip themselves for all the challenges and their incomes will also increase over a period of time, to offset the money required for other expenses. For the corpus, in an instrument like the Public Provident Fund, at current rates, and assuming just a 6.5 percent return, one would have to save something like thirty thousand rupees. This quantum cannot change as this is the bare minimum. Somewhere down the line, due to a foreign posting or a job in some advanced country, the earnings will be much more and hence the goal itself can change to a higher amount.
Similarly, having a goal of becoming Vice-President(Finance) at the age of 34, can be a realistic long-term goal for a chartered accountant who is a deputy manager with a big conglomerate at the age of 24. Since his academic record is too good, he has been promoted twice within three years. This is the current reality. How he plans his next moves will determine whether he can reach there.
Plan B and Plan C for attaining each goal Let us take the aforesaid example. He is just 25 and gets married to another chartered accountant, now employed as an Asst. Manager with a leading private sector bank. His next move should be to jump to a senior manager position in another organization, within the next eighteen months, in the same city, if he thinks that he cannot move fast. For better exposure at the Corporate office and also experience in handling Initial public offers and the like, and also vital experience related to maximizing the company's income under the "other income" head, he would need to take on the new challenge. This is called Plan B.
Now take the next reality Yes, his responsibilities have improved and his experience is also good. However, he has a selfish boss whose intent was to pull him down. Plan C would mean that he would have to jump again, to another safe organization with greater role clarity. It should be noted that Plan B and Plan C mentioned here, are not fictional. These are current trends of cut-throat competition and the realities of modern corporate careers would mean that such strategic moves would become vital in the attainment of the long-term goal.
Having clear short-term goals There is no free lunch anymore. The acquisition of new skills and competencies are no more choices. They are imperatives. This clarity should be there in the mind of each individual, whatever be his background. This is relevant for even school teachers. For instance, in the next ten years, it would become imperative that those who aspire to become Principals of CBSE schools should become doctorates.
Closely aligned to such clarity, is also the clarity that should accompany any short-term goal. The contingency plans are part of this exercise. For example, in the aforesaid example, let us assume that the conglomerate acquires a plant in Nigeria and transfers the chartered accountant to the new location. When we talk about clarity, it goes without saying that emotional issues or family issues never come in the way and the man accepts the challenge and migrates to the new country, even leaving his family behind.
Such clarities should be part and parcel of any short-term goals. In any case, the sudden turn of events should always be accepted as "givens". One really does not have any choice, either.
Reviewing each goal once in three years Let us take another real example. In this case, the wife was an expert in investment management. She had invested three lakh rupees in a good stock, recommended by an expert. However, Post-COVID-19, given the uncertainties in the main export market of Europe, the stock has gone down by 48%. The choice is clear. If she were to sell her stock now, she would be left with a small profit, as the acquisition was made for a price slightly lesser than current levels.
A leading chartered accountant, who was also in the same business, advised her to sell. That is exactly what she did. Actions such as these have big implications for the main long-term goal, of say, the four crore rupees within a span of thirty years. And then as far as careers are concerned, it is quite likely that the new imperative competencies need to be acquired, even during the mid-term periods, when the man is around 36 years old. For example, if the man works as a senior manager with an FMCG company, to go ahead and become a VP at the age of 44, he may have to spend his own money and go abroad to say, Germany, to acquire a Master's in Innovation Management, the qualification that would fetch him more global opportunities. The examples are exactly the examples of the review that we are talking about. If necessary, these reviews need to happen even once in a year.
Never giving up on the acquisition of long term goals Life is full of glorious uncertainties. Having to deal with the COVID-19 virus is just one example. There could be a recession and changing jobs might never be easy. Yet, we need to focus on the achievement of long-term goals and savings is one issue on which there should never be any compromise.
The wisest option to make mid-term corrections comes from experience. Take this real-life example of a relative of mine. With just 24 lakhs, this gentleman was advised by me and his own maternal uncle to buy a good three-bedroom house in a decent locality, in one suburb of Coimbatore city. He had lost his job in the wake of the 2008 global crisis. He had joined a BPO company, with a much lesser salary. He found it so difficult to service his EMI of Rs.34,000 towards his flat in a decent locality in Chennai. His own cousin, based in the USA, offered to buy it from him for a price that was around 15% lesser than actual market price. But prices were crashing day after day. He sold out and then purchased the Coimbatore property.
His wife had just then completed her M.Ed course and got an appointment in a good school as a senior teacher. Since this school had a big reputation, her salary was also good. He liquidated his debts and also saved a bit. This mechanical engineer got into a core IT job at Mumbai when the good times were back. He took a big risk and went to the USA to take up an advanced SAP course, funded through a bank loan. This worked and he landed in a good job with an IT organization. His wife and three-year-old child joined him later. However, the entire lot of relatives were sort of afraid with his moves, then turned as "too adventurous". Today, that family has property worth ten crore rupees in the posh locality of Mylapore and also earn decent rental income. At the moment, they are sitting pretty, only because the man did not bunch an inch. His management of ambiguity was a big eye-opener for all his friends and relatives.
Conclusion Given the present realities of Corporate life, long-term goals on careers and financial security, would need to factor in a number of assumptions. Some details of such assumptions and actions that would give shape to short-term plans in the pursuit of effective long-term goals have been discussed in some detail in the aforesaid paragraphs.
Long term goals will be there for almost all the employed persons. To have a decent house without any loan by the time of his retirement may be one of such long term goal. He has to plan early and have the house at least by the time he reaches his 40 years so that he will have 20 years of time to repay the loan.
When I took up a job after my PhD, I was very clear in my mind and the goal I set myself was to become a Director of a company by the time I am 45 years. I used to review my performance every year and used to amend and improve myself so that every three years I get a promotion that would help me to get to the desired level. I maintained my efforts and exactly at my 44th year I became the Director of a Limited Company and I continued there for about 16 years. Why I have mentioned about me is to tell the others that review at regular intervals is important.
During the course of trying to getting the goal attained, we may feel we are not doing as required and in such case, we have to thoroughly analyse our work and if necessary we have to try other routes or plans and see that the gaps are filled.
As mentioned by the author. we should have some short term goals which will support our long term goals. If you divide your long term goal into some 10 short term goals and give a time limit to each short term goal that will help you in fulfilling the long term goal.