“In preparing for battle I have always found that plans are useless, but planning is indispensable.” General Dwight D. Eisenhower. U.S. Army and Supreme Allied Commander
Dwight Eisenhower once said, “In preparing for battle I have always found that plans are useless, but planning is indispensable.” In simple terms, great investors, same as great leaders, are proactive in building wealth and they follow a plan.
Most retail investors don’t plan and just react to market volatility and events. Instead, investors should engage in long-term financial planning from the beginning with the intent to anticipate problems and come up with solutions.
“Nobody ever created a plan to be broke, bankrupt, behind in monthly payments, drowning in insurmountable credit card debt, or a financial failure. Those things are what happen when you don’t create or follow a plan.”
Planning helps you prepare for the potential challenges and keep you on track. And with an effective action plan, you can boost your productivity and keep yourself focused. The benefits of an action plan are:
- It gives you a clear direction. As an action plan highlights exactly what steps to be taken and when they should be completed, you will know exactly what you need to do.
- Having your goals written down and planned out in steps will give you a reason to stay motivated and committed throughout the project.
- With an action plan, you can track your progress toward your goal.
- Since you are listing down all the steps you need to complete in your action plan, it will help you prioritize your tasks based on effort and impact.
Failing to plan means planning to fail. That’s why you should create a action plan before making any financial or wealth building decisions, and then stick to the plan. Whether you are deciding on investing in cryptocurrencies or acquiring real estate for your business, it’s smart to do so with a list or plan of action that has your budget in mind.
“Our goals can only be reached through a vehicle of a plan, in which we must fervently believe, and upon which we must vigorously act. There is no other route to success.” – Pablo Picasso
A well-designed action plan can make it easier for you to track and realize your goals. For your personal goal, you can use an action plan to create a clear path to success.
An action plan is a document that lays out the tasks you need to complete in order to accomplish your goal. It also breaks up the process into actionable assignments based on a timeline. A good action plan will outline all the necessary steps to achieve your goal and help you reach your target efficiently by assigning a timeframe—a start and end date—to every step in the process.
Step 1: Define your end goal
If you are not clear about what you want to do and what you want to achieve, you are setting yourself up for failure. Start by defining where you are and where you want to be. Analyze the situation and explore possible solutions before prioritizing them.
Then write down your goal. And before you move on to the next step, run your goal through the SMART criteria. Or in other words, make sure that it is
- Specific – well-defined and clear
- Measurable – include measurable indicators to track progress
- Attainable – realistic and achievable within the resources, time, money, experience, etc. you have
- Relevant – align with your values and other wealth building goals
- Timely – has a finishing date or deadline
Step 2: List down the steps to be followed
Once the goals are clear, the next step is to list all the tasks that you must perform to realize your goals and due dates.
It’s important that you make sure that each task is clearly defined and is attainable. If you come across larger and more complex tasks, break them down to smaller ones that are easier to execute and manage.
Step 3: Prioritize your tasks and add deadlines
It’s time to reorganize the list by prioritizing the tasks. Some steps, you may need to prioritize as they can be blocking other sub-steps.
Add deadlines, and make sure that they are realistic. Consult with the person responsible for carrying it out to understand his or her capacity before deciding on deadlines.
Step 4: Set Milestones
Milestones can be considered mini goals leading up to the main goal at the end. The advantage of adding milestones is that they give you something to look forward to.
Start from the end goal and work your way back as you set milestones. Remember not to keep too little or too much time in between the milestone you set. It’s a best practice to space milestones two weeks apart.
Step 5: Identify the resources and time needed
Before you start working on your tasks, it’s crucial to ensure that you have all the necessary resources at hand to complete the tasks. And if they are not currently available, you need to first make a plan to acquire them.
This should also include your budget, any advisors and determine the cost of each task if there are any.
Step 6: Visualize your action plan
The point is to create something that you can understand. Make sure that your action plan clearly communicates the elements – tasks, deadlines, resources, etc. This should be a working document that is kept updated and adjustable.
Step 7: Monitor, evaluate and update
Allocate time to evaluate the progress you’ve made. You can mark tasks that are completed on the final action plan, bringing attention to how you’ve progressed toward the goal.
An action plan can also make it easier for you to monitor your progress toward your goals, allowing you to keep your projects on schedule and, if applicable, within budget.
“Have a bias towards action – let’s see something happen now. You can break that big plan into small steps and take the first step right away.” – Indira Gandhi
References:
- https://www.lifehack.org/900263/reactive-vs-proactive
- https://resources.franklincovey.com/blog/paradigms
- https://creately.com/blog/diagrams/how-to-write-an-action-plan/
- https://www.indeed.com/career-advice/career-development/how-to-write-an-action-plan