A Dollar Amount Cannot Be An End Goal

by golbguru on July 2, 2007

Yesterday, Pete @ My Financial Awareness posted an excellent article titled “Reasons Not to Set Your Goal to Become a Millionaire“. I have been brooding over similar (complementary) thoughts for some time, and now, in light of Pete’s article, I would like to share them with you. Instead of talking about just the “millionaire” goal, I will try to generalize the thinking to our tendency of setting goals of the type: “I want to save $ XYZ in the next 5 years“.

Before we start talking about money, let’s brush up some basics.

Milestones vs. Goals: In a very few words, a goal defines your purpose and milestones measure your progress towards that purpose. Although it’s a very straightforward concept, it can be a bit tricky to understand. To make it easy, let’s discuss some American football. In the football field, yard lines are analogous to milestones - they are not goals, they just measure your progress towards your goal - which in this case could be the end zone. Really? Is the end zone really the goal for a football team? No, it’s again just a milestone towards a greater purpose - winning the game. If you treat the yard lines as your “goals”, you run the risk of loosing focus of your real end goal - your aim is to win the game, not just cross yard lines.

Similarly, (in my opinion) dollar amounts are just milestones towards some greater, more profound goal. Your financial planning cannot stop at “I want to save $ XYZ in the next 5 years”, there has to be some purpose beyond that. You need to ask yourself some questions like - why do I want to save that amount of money? what do I intend to do with that money? how will saving that much money add value to my life? etc. This will help you understand what your real goal (or real purpose) is and it will put your monetary milestone into perspective with respect to that purpose. It’s this real purpose beyond the dollar amount that differentiates between “hoarding” and “saving”.

Let’s look at some specific examples to understand this better.

  • Happy retirement is a goal, and a million dollar target is just a milestone: This exactly what Pete has conveyed in his article that I linked to at the beginning of this post. You cannot ensure a “happy” retirement just by saving a million dollars - there are a lot more ingredients to your post-retirement happiness than just money. Here is a schematic that will save me a thousand words towards explaining this thought:

money is not your end goal

Similarly, we can try and understand a couple of other relevant aspects of life which are sometimes (unfortunately) tied to dollar amount “goals”.

  • Good education for your kids is a goal, saving for their college fees is a milestone: Just saving a few hundred thousand dollars for you kid’s educational expenses is not going to ensure good education for him/her. Go ahead and work hard at those 529 plans, but don’t think that your work is done as far as “good education” for your kids is concerned. Motivating your kid to study, making good educational decisions for him/her early on, encouraging good study habits, etc. are some of the issues you will need to handle beyond the money part towards that goal.
  • Being (and staying) debt free is a goal, saving a dollar amount to wipe out your credit card debt is just a milestone: If you saved enough money to pay off thousands of dollars on your credit card - congratulations, that’s commendable… but that’s just a milestone towards your debt free goal. Staying out of debt requires a proper mindset - no amount of money can do that for you. So while you are working towards reaching your dollar amount milestone, it is also important to work towards your bigger goal of staying debt free. This will include addressing your spending habits, addictions, consumerist tendencies, etc.

In summary, it is not enough to make a goal that says “earn $2 million by age 50″ - that $2 million is not your goal, that’s just a milestone. There is no problem with pursuing dollar amount milestones; in fact, they are essential measures of your progress. However, beware of the tendency to assign too much importance to these milestones - once you start doing that, you run the risk of losing focus of your real goals. Don’t let that happen - don’t let your dollar amount milestones distract you from your real end goals.

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{ 14 comments… read them below or add one }

1 Eric 07.02.07 at 7:05 am

Very nice article. This is something my wife and I have had to deal with lately. My problem tends to be that money is not a good motivator. If I am thinking, “I need to do [insert whatever to make more money] so that we can have more money”, I get distracted by other things (why do you do that to me World of Warcraft?!?!) However, when I can come up with a different motivation, like being able to have more time with friends and family or give more to those in need, I tend to fight through the distractions better.

In the end, money is just a tool. If you don’t know what you are using it for, it can be a worthless, if not destructive, one at that.

2 KMC 07.02.07 at 9:01 am

Great article. The money-as-tool idea is something I lose from time-to-time. You’re absolutely right that confusing goal and milestone can be pretty easy.

3 AFinanceBlog 07.02.07 at 9:41 am

Many people do confuse milestones as goals, and this often slows people down from reaching the next milestone of their goal.

4 Steve Miller 07.02.07 at 12:46 pm

Excellent points made in this article especially as it relates to debt reduction. Making the sacrifices neccessary to eliminate debt won’t seem worthwhile if your goal is just 0 debt.

You need to have a clear picture as to what benefits the sacrifice will bring down the road and the joy it will give you to stay the course until the debt has been eliminated.

5 Super Saver 07.02.07 at 3:23 pm


To me a goal should be specfic and measurable. To use your American football analogy, the endzone is a goal - specifically crossing a certain line and is worth 6 points.

For me the higher level purpose is the “mission.” The mission of the football team is to win games, including the Super Bowl.

6 golbguru 07.02.07 at 9:25 pm

Super Saver: I knew some one would bring this up - the S.M.A.R.T. approach (Specific, Measurable, Attainable, Realistic, Timely). I learned it in my project management classes - however, real-life goals are not as black and white as corporate objectives.

In the American football analogy, it’s not just the end zone goal that will win you the game - it requires a good defense, a good kicking team, a smart team manager who shuffles players wisely, and other field strategies that will help you win the game. Of course getting touchdowns is a necessary milestone, but that alone is just a part of the whole scheme.

You can still use them to track your progress on short time basis - but then, in my opinion, they become SMART milestones - guiding you to bigger goals in life (which in all probability are beyond the SMART guidelines). For me, “mission” means everything from start to end - it includes the milestones and the goals and your efforts to achieve them.

: “In the end, money is just a tool. If you don’t know what you are using it for, it can be a worthless, if not destructive, one at that.” - Amen brother. :)

7 mapgirl 07.03.07 at 8:26 am

Great post. It’s true, “The Number” is only part of it. I know what I plan to do during my retirement and how I will enjoy the extra time. A lot of retirees kind of freak out with all the idle time. My folks tell me they will work till they die because they don’t love golf THAT much.

That being said, I am working on my long-term health, emergency plans, and putting a little more emphasis on my dollar goal. It’s funny, but all of that is contributing to my current happiness too. It’s a huge stress relief knowing that I have a plan, even if I deviate from it. It’s a lot better than wandering through life aimlessly.

8 rhbee 07.04.07 at 6:12 am

Funny, how one thing leads to another. I was reading Trent’s Simple Dollar post about the “evil” of money and still thinking about it when I scrolled down to his link to you. And here you are discussing “money is a tool” and football. In logic we discover that it is a mistake to argue with the example,but just for arguement’s sake, is there anything more evil than the money that is made on the sport of football?

9 Efrain 07.04.07 at 8:31 am

This had to one of the best Personal Finance / Money posts I’ve read in a long time.

Thank you.

10 MoneyNing 07.04.07 at 9:54 pm

Thank you for putting this into perspective! We sometimes try too hard to reach a certain dollar amount goal that we end up sacrificing what we really want which is happiness.

11 Andy 07.08.07 at 10:32 am

Is money the root of all evil if it’s the goal? Yes, I agree with that. But think about it this way: the goal is being able to live a decent life in the future without having to spend most of your time at a job — oh, and pay for your health insurance. For me and my wife that is $12,000 a year. With that kind of “living expense” waiting for you, your milestone (money accumulation goal) better be sizable, regardless of how you feel about all the other finer things in life.

12 Au Pair Australia 12.04.12 at 10:54 pm

You are right Become a millionaire is not our goal Of life.

Our goal is that end of life you have no any dissatisfaction from your life.

13 3 Star Hotels at Delhi 06.02.13 at 8:52 pm

Thank you for your comments. Though it was not clear, the economic growth data I cited were in real terms, adjusted for inflation or deflation as the case may have been.

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