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Have Your Financial Goals Lost the Plot?

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Summary

In this article, Katie Gatti Tassin explains how focusing on "inputs" rather than "outcomes" can help people achieve their financial goals. She gives the example of a reading goal, noting that while reading 40 or 50 books is great, it's more important to consider why the goal is being set in the first place. Gatti Tassin also notes that our unconscious brains are programmed to value prestige over our own happiness, and warns that financial goals may require a lifestyle that makes people miserable. She suggests that instead of focusing on money, it's better to focus on habits that will lead to a sense of prosperity.

Q&As

What is the difference between focusing on inputs instead of outcomes when setting financial goals?
Focusing on inputs instead of outcomes when setting financial goals means focusing on the habits and actions that will lead to the desired outcome, rather than just the outcome itself.

What are the potential pitfalls in focusing too intently on financial goals?
The potential pitfalls in focusing too intently on financial goals are that the goals may require a lifestyle that makes you miserable, or that reaching the goal may not lead to permanently positive results.

How can reframing financial goals lead to an enduring sense of prosperity?
Reframing financial goals to focus on inputs rather than outcomes can lead to an enduring sense of prosperity because it creates habits that will lead to the desired outcome, rather than just a sugar rush that will quickly fade.

What is hedonic adaptation and why is it important to consider when setting financial goals?
Hedonic adaptation is the process by which the initial experience of acquiring more money is exhilarating, but the adrenaline rush fades as it becomes the status quo.

How can focusing on inputs rather than outcomes lead to achieving desired outcomes?
Focusing on inputs rather than outcomes can lead to achieving desired outcomes because creating input-based financial habits usually ends up inadvertently generating the desired outcome as a byproduct.

AI Comments

👍 This article is full of great advice on how to set financial goals that lead to long-term success and satisfaction. Katie Gatti Tassin provides an insightful and inspiring perspective on how to focus on inputs rather than outcomes.

👎 This article fails to address the importance of setting achievable goals. It also fails to provide clear steps on how to achieve financial goals in an effective and realistic way.

AI Discussion

Me: It's about how focusing on inputs, not outcomes, can help reach our financial goals. The author talks about how focusing too much on a financial goal like becoming a millionaire can lead to an unsatisfactory lifestyle, and how it's better to focus on inputs like setting a budget or taking time off to work on a side project.

Friend: That's really interesting! It definitely puts a different spin on how to think about financial goals. It's important to remember that the money is just a proxy for the underlying emotion associated with achieving the goal. It's easy to get wrapped up in the idea of making a lot of money, but that doesn't always guarantee happiness.

Me: Exactly! We should be focusing on inputs that will help us achieve our ultimate goals, rather than just the outcomes. It's important to figure out what emotion we're really trying to achieve and how to best go about reaching it.

Action items

Make a list of your financial goals for 2023 and the underlying emotion you want to feel when you achieve them.
Brainstorm input-based financial habits that will help you reach your goals.
Set aside time each week to review your progress and make adjustments as needed.

Technical terms

Early Retirement: Refers to the process of retiring from work before the traditional retirement age.
Financial Psychology: The study of how psychological factors influence financial decisions and behavior.
Haidt, 2006: Refers to the book The Happiness Hypothesis by Jonathan Haidt, published in 2006.
Breiter, Aharon, Kahneman, Dale, and Shizgal, 2001: Refers to the paper "Functional Imaging of Neural Responses to Expectancy and Experience of Monetary Gains and Losses" by Hans C. Breiter, Itzhak Aharon, Daniel Kahneman, Anthony J.W.C. Dale, and Paul R. Shizgal, published in 2001.