First of all, take stock of where you want to go in life. Are you happy with your current house, job, living conditions, furniture, clothing, etc.? If so, it will make the process much easier. If you are dissatisfied, make a list of the things you want to achieve and goals professionally. Without writing it down, you won't know if you got there, or even where to go. Make 1 year, 5 year, and lifelong goals so you will have different levels to work toward. A good 1 year goal would be to get out of debt (read my article), a 5 year goal to buy a pedigree English Springer spaniel, and a lifelong goal to become owner of your own profitable Whataburger franchise, just for instance.

Next, take stock of what you already have. It is important to figure out what you have you need and what is just clutter in your life. If something isn't making you money, it is costing you money. Are there things you own you could sell to help you meet your goals? Are there talents you have that could be put to use? Have you thought about selling your homemade pasta sauce that everyone loves that you give away to family? Do I really need 500 channels of HBO?

There may be a lot of clutter you already have that you can turn into cash to help you meet your goals, or consider bartering some of the junk you don't want for some stuff you do. What will you give up to get what you want? Take stock of your time as well. Do you watch 30 hours of T.V. a week? Think about using that time to get a second job if your dream is to earn more money, or go back to school to improve your chances at a better job. This has to be about you. Some people just want to lay on the beach and relax, well that can be a goal too. Just remember, you are going to need some retirement money to be a beach bum for the next 50 years.

Now that you have your overall goals and assessment of assets, get down to specifics. Look at how much money you owe and decide if you feel comfortable borrowing to achieve your goals. Almost all the self made people I have met (unless they are athletes or invent something) have used leverage to get where they are. They borrow other peoples’ money and invest at a higher rate of return, pocketing the difference. Again, this isn't right for everyone and you need to consider how much risk you are willing to take. There is nothing wrong with having no debt and a bunch of cash in a bank account, it's just unlikely that you will get rich this way. Now, being rich is not everyone's goal, so again, this is where you have to figure out what works for you.

If your goal is to get rich, research the top trends and industries for the future. Figure out how your talents can be used in those fields. Not everyone is an entrepreneur. If not, look at the careers that pay the most money. Fields like medicine and law are not going away and they pay very well. If you have the ability to start something from scratch, think about starting your own business. This is the most risky of all, as the majority of businesses fail in the first couple years, but can also be the most rewarding personally and professionally if successful. Again here, education is crucial. One must be able to see the future to know where business is headed.

Consider what talents and special abilities you already have. If your family has been in the flower business for the last 150 years, you might put that inside knowledge to good use. You may hate flowers, but they may make you rich. This is where you have to figure out what you are willing to give up in order to meet your dreams. Is your career more important, your time, or simply money? The majority of people can't have all three, and often not even two. What are you willing to live with, and without?

Think about who you know. Do you have a friend you can exploit, uh, I mean network with to find a better job? Is grandpa about to pass on? Better be nice to him for a while longer. Use your resources to get to your goals.

And here is where we tie this together. Decide if you are willing to borrow money to fund your education, business, or other goals. One can use a simple Texas Instruments financial calculator to figure out if the investment you are going to make is worth it. (see my article on present value) Consider your time and energy as well. Is 10 years of school really worth it to make a few extra bucks a year? For some yes, for others, no. What is your time worth? If your goal is to help others, are you willing to travel around the world on a shoestring and live in terrible conditions? If you are not willing to do what it takes, make other goals, because not being able to meet your goals will drive you nuts.

Now, you goals should not be so easy that you can meet them easily either. Goals should be moderately hard. You should be able to get there with some effort, but they shouldn't be so hard you feel like a failure or so easy you never feel a sense of accomplishment.

As you work toward your goals, cross off one goal when you get there and make another. If you paid off your debts, next you may want to save $5000 in the next year. That would be the new goal. Even if you reach all your goals, you could still make a new goal of staying where you are. Realize that things happen, and it is good to reassess every now and again to make sure you really are where you think you are and not going backwards.

Preparation is the key to any goal setting and life plan. Always measure twice and cut once. Then, take stock as often as you feel necessary to make sure you are going in the right direction to meet your goals.