When it comes to Goal setting think of setting goals like an athlete. Let us take the case of a runner…he could set goals for a Personal Best, a meet record, a meet win, running the whole season without injury, managing health and weight within some parameters….this helps.

Let us say the meet record of a Marathon in India is at 2:00:10 – and you set a target of winning the marathon – you do 2:00:09 but you are ranked 4th…..

If you had set a goal of WINNING the marathon, yes you would be disappointed at the result! However if you had set multiple goals like winning the marathon, achieving a personal best, doing sub 2:00:10, running injury free for the whole season, etc. you would not be so disappointed!

Similarly in your financial goals too you could keep multiple goals – this reduces disappointment, helps you focus on multiple targets, …etc.

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  1. We like it or not, we alays have multiple goals.
    It is just that you may not have all of them on your radar.
    Moreover the way Subra has explained, I would say there are multiple parameters of measuring success. But there has to be one goal. That of winning. Too many Goals take away focus. And it is focus that helps you achive. Not balance or diversification. Balance or diversification of goals is a defensive strategy to reduce disappointment of not being able to achieve it. You need to employ that when you are not confident about your capability to achieve the goal. When you are not confident and committed, any number of goals do not help.

  2. But In the Financial world there is only one goal and that is to maximise your return by reducing the risk and you need diverfication to reduce that risk.You can not bet on a single share because that is very risky for a normal investor like you and me.If people still doing that either they need a strong luck or its your own company. Even today people who run their own business try to diversify that to minimise the risk.
    See the case of satyam..Investor bet on that share still try to come out of that..and see Raju he diversify Stayam money somwhere still using that money.

  3. Sarang,

    Too many diversified goals may lead to reduction of focus…Its worth read what subra has written more than once….all the sub goals are pretty much in support of the ultimate goal…we dont set a goal and try achieve it at ANY COST…do you? You point on many goals will not help only if each of them does not support each other….Subra has given a classic example to support his topic..I am completely with subra, its important how we set the goals and work towards them!!!

  4. Today I had been the first to comment and that was contrary to what Subra had said. Looks like our loyal reader friends of this blog did not like it. What I am sure of is that Subra must have liked it. The purpose of his writing as I see is to create questions and make readers think.

    @Pankaj
    I wish to differentiate between risk management and achieving goal. We buy insurance and employ other defensive strategies for risk management. For goal achievement it is essential to have focus. I am not sure if you are aware of dis-advantages of over-diversification. Even Raju focused on Satyam business for making money. Once he had made money, he diversified in order to preserve it.
    @Charan
    Quite often it is the case that anything less than 100% achievement of goal is as good as 0% achievement. If you are designing a bullet proof jacket, it is not acceptable even if 1 out of 100 bullets passes through. The breakdown of goals that Subra has given, may comfort you even if you fail to achieve the last bit. But the fact remains that you have not achieved final goal. It is good in academics where it does not matter much whether you pass an exam by 45% or by 85% as long as you pass. In reality say for a salesman what matters is converted sale. It makes no sense that the salesman was able to convince customer 75%.

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