Have you ever wondered how people out there are able to accomplish these massive goals?
Well, wonder no more. I'm going to discuss how to set goals and reverse engineer your way to accomplishing them.
To start, you will need to set a clear and ‘trackable’ goal. And, by ‘trackable, I mean something that you can attach a number to. For example, instead of setting a goal of “losing weight'', declare rather that you want to lose 12 pounds.
Or, in terms of real estate investing, instead of stating that your goal is to build a rental portfolio, say rather that you want to buy 12 houses. With those numbers involved, the 12 pounds and 12 houses, that's what makes the goal trackable.
The next thing you want to do is put a timeframe to that specific goal. For example, I want to lose 12 pounds in 12 months, or I want to buy 12 houses in 12 months.
Those are the first two key things that you need for a goal. You need something that is trackable and it should come with a timeframe.
Next, let’s talk about KPIs or Key Performance Indicators. Key Performance Indicators come in two forms. There are lead indicators or lead measures and lag indicators or lag measures.
Lead and lag indicators or measures are means to measure your goals.
When you set a goal to lose 12 pounds of weight, lead indicators refer to you going to the gym and making healthy food choices, and any activity you take to reach your set goals.
On the other hand, lag indicators refer to the weight you have lost, in this case, 12 pounds or any result from the actions you have taken towards a set goal.
In terms of building a real estate portfolio, lead measures would be your lead generation strategies, the number of leads you’re getting and analyzing, appointments you are going into, and offers you’re making.
While, the lag measures would be the 12 houses you purchased or the number of contracts you converted from the leads, appointments, and offers.
In line with that, our next step in goal setting is to work backward and figure out what the lag measure targets should be.
I usually set things up on a quarterly basis. So, if I have the annual or yearly goal, I will break my annual goal down to quarterly lag measure goals.
For example, if over the next year I want to lose 12 pounds, then every quarter, I will set to lose three pounds, or one pound every month.
In terms of the rental portfolio, if I set out to buy 12 houses in a year, I would need to get three houses a quarter or one house a month.
Finally, you need to figure out what lead measures are important to obtain these goals, and then you need to keep track of them either daily or at the very minimum on a weekly basis.
For losing weight, I have three lead measures that I keep track of on a daily basis. I want to walk 10,000 steps, go to the gym, do a workout of at least 30 minutes, and then eat less than 2,500 calories every single day.
All I do is create a checklist and put a little checkmark, or an O. If it's a check it means I did it, if it's an O that means I didn't do it. I keep track of that every single day. So if I look back in three months, and I only lost one pound where my goal was losing three pounds, I can look at my chart and would probably see a lot of O’s instead of checks when reviewing my lead measures.
When it comes to building that rental portfolio, my lead measures are leads I’ve acquired and analyzed, appointments attended, and offers made. And the number of offers made is a big deal, which is what I really keep track of.
Basically, if I can make two offers a week, eight offers a month on average, I should be able to buy one house a month or at least get one house under contract. And, only a certain amount of contracts actually turn into buys.
Regardless of what your goal is, It’s necessary that we religiously keep track of these lead measures, whether it’s monthly, quarterly or weekly. You will also need to track your lag measures to determine if you are aligned with the lead measures you’ve set and been successful in accomplishing the goals.
Like in losing weight, I keep track of the measurement around my belly, and how much I weigh. And for the rental portfolio, for buying 12 houses, I keep track of how many contracts and how many purchase closings I get.
Being able to keep track of your lead measures and your lag measures enables you to diagnose issues when you're not able to meet your goals.
Finally, you are ready to set your goal. With this framework, you should be able to track them, diagnose any issues, and ultimately, accomplish them.