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Are Systems Better Than Goals?


Creating Systems to Accomplish Your GoalsThis week, I’m reading Tim Ferriss’ new book – Tools of Titans: The Tactics, Routines, and Habits of Billionaires, Icons, and World-Class Performers. Tim Ferriss basically compiled the best bits from his podcasts and put them in a huge tome. Luckily, you don’t have to read every line of the 660 page book. It’s best to just scan through and find the best nuggets of wisdom that apply to your life. The book is divided into 3 sections – healthy, wealthy, and wise. Unfortunately, the first section on health is a bit too extreme for me so I skipped most of that section. The section on wealth is pretty good, though. One particular chapter really stood out to me – “systems” versus “goals.”

This section is the interview with Scott Adams, the creator of the Dilbert comic strip. Basically, he postulates that setting up “systems” is better than setting goals. Setting up a good system will position you for success even if you don’t have a goal in mind. While a goal is just a short term project, a system can develop many useful skills that let you build on your success over time. Once you accomplish a goal, it’s done, whereas you can branch off from a system. Wow, that’s an interesting way to look at it.

Here is Scott Adams on blogging.

When I first started blogging, my future wife often asked about what my goal was. The blogging seemed to double my workload while promising a 5% higher income that didn’t make any real difference in my life. It seemed a silly use of time. I tried explaining that blogging was a system, not a goal. But I never did a good job of it. I’ll try again here.

Writing is a skill that requires practice. So the first part of my system involves practicing on a regular basis. I didn’t know what I was practicing for, exactly, and that’s what makes it a system and not a goal. I was moving from a place with low odds (being an out-of-practice writer) to a place of good odds (a well-practiced writer with higher visibility).

The second part of my blogging system is a sort of R&D for writing. I write on a variety of topics and see which ones get the best response. I also write in different “voices”. I have my humorously self-deprecating voice, my angry voice, my thoughtful voice, my analytical voice, my half-crazy voice, my offensive voice, and so on. You readers do a good job of telling me what works and what doesn’t.

When the Wall Street Journal took notice of my blog posts, they asked me to write some guest features. Thanks to all of my writing practice here, and my knowledge of which topics got the best response, the guest articles were highly popular. Those articles weren’t big money-makers either, but it all fit within my system of public practice.

My writing for the Wall Street Journal, along with my public practice on this blog, attracted the attention of book publishers, and that attention turned into a book deal. And the book deal generated speaking requests that are embarrassingly lucrative. So the payday for blogging eventually arrived, but I didn’t know in advance what path it would take. My blogging has kicked up dozens of business opportunities over the past years, so it could have taken any direction.

Goals vs. System

This is the best bit, but you can read the whole thing on Scott Adams’ blog post – Goals vs. System. Starting a blog is a lot of work, but it can really expand your horizon. Almost nobody makes much money from their blogs in the first year. You have to write consistently and build some readership first. Even if you don’t make any money, you will improve your writing skill and expand your network. Scott has an advantage because he’s already famous, but a lot of famous bloggers started from scratch. Blogging can create many opportunities and it’s up to you to take advantage of them. Check out my guide on How to Start Blogging if you need some help getting started.

Back to Scott’s system, the main issue I have with this is the “vs.” part. I love setting goals and it has worked extremely well for me. Life has improved dramatically since I started setting goals and accomplishing them. I’m not about to throw out my goals just on a cartoonist’s say so. (I’m just joking, I love Dilbert.) For me, it’s better to set a goal first and then create a system to accomplish that goal. When I started Retire by 40, I did have some goals. I wanted the blog to help me focus on my early retirement journey and also generate a little side income. My initial goal was to make $500/month from blogging, but our blog income has improved quite a bit since 2010.

Anyway, I don’t see why you shouldn’t have goals and systems. For me, it’s just easier to set some goals first. Let’s go through some of my 2017 goals and see what kind systems I am using to accomplish them.

Save $50,000 in our tax-advantaged accounts

We’ve had this goal for many years now and we have been able to accomplish it every year. The system here is pretty easy.

  • Mrs. RB40 maxes out her 401k every paycheck. That’s $18,000.
  • I contribute $1,500 per month to my individual 401k. That’s another $18,000.
  • We contribute $400 per month to RB40Jr’s educational 529 plan. That’s $4,800.
  • We contribute to our Roth IRA when we have money. That’s $5,500 times 2 = $11,000.

At the end of the year, we’d saved and invested $51,800. Most of this saving is automated so it’s easy and we never miss the money.

Increase dividend income to $11,500

There is a system for this one, too.

  • We buy stocks that have a track record of increasing their dividend payout.
  • The dividend is reinvested into our dividend portfolio.
  • We add new money occasionally.

Our dividend income is slowly increasing every year and it will help fund our early retirement. When Mrs. RB40 retires, we probably won’t be able to add new money or reinvest as much.

Increase passive income to cover 78% of our living expenses

This one is broader in scope, but it has a system too. Basically, we need to minimize lifestyle inflation and increase our passive income as much as we can.

  • Minimizing lifestyle inflation really isn’t that difficult. We already live a pretty comfortable lifestyle and we just need to stay the course. This means no big ramp up in purchases like buying a luxury car or a huge house.
  • Increase passive income is tougher because it is so slow. We need to keep saving and investing every year until we meet our goal. It will probably take 3-5 more years to reach 100% FI ratio. (That’s having enough passive income to cover 100% of our living expenses.)

This one actually works well with Scott Adams’ point. We lived modestly and saved as much as we could long before financial independence became our goal. This way of living gave me the opportunity to switch gears and work toward early retirement. If we saved only 10% of our income like the financial advisor suggested, I’d never have been able to retire early. Living modestly is a system that will give you more choices in the future.


My fitness goals for 2017 are to average 7,000 steps per day and do 15 consecutive pull ups. These are tough for me because I’m not very active by nature. I prefer stay home and read than go out in the cold to exercise. The first few weeks of 2017 didn’t go well, but eventually I settled into a routine.

Now, I walk to the gym and exercise after RB40Jr goes to school. This takes care of both the steps and the pull ups. Yes, I can do 15 pull ups now! Accomplishing that goal made me feel great. For the rest of 2017, I just need to work on my form and try to do even more pull ups. I’ve seem to hit a plateau so I’m going to take a week off during spring break next week to rest up.

This fitness system won’t work for everyone, though. It seems a lot of people hate the gym and they just can’t consistently go. In that case, you should try to be more active by doing activities you enjoy like biking and hiking. You have to come up with a system that works for you.

Other goals

My other 2017 goals are more limited in scope.

  • Move RB40Jr’s 529 plan to Vanguard
  • Move Mrs. RB40’s traditional IRA to Vanguard
  • Start a new site
  • Join Toastmasters
  • See the 2017 total solar eclipse

These are things that can be accomplished relatively easily, but they tend to get put off until later. Having them on my 2017 goals list really helps because it means I will get them done sometime this year. These goals don’t need a system. I just need to do them.

Goals and system

Setting goals and accomplishing them has worked wonders for me. Personally, I think the journey is more motivating if you have goals to work forward to and have that feeling of accomplishment. It would be much harder for me to put faith in a system without having a goal. They both work well together so why not use both goals and systems?

What do you think? Do you like having systems and/or goals? I guess it is similar to the chicken and egg problem. What comes first, the system or the goal?

Image credit: Zak Suhar

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Joe started Retire by 40 in 2010 to figure out how to retire early. He spent 16 years working in computer design and enjoyed the technical work immensely. However, he hated the corporate BS. He left his engineering career behind to become a stay-at-home dad/blogger at 38. At Retire by 40, Joe focuses on financial independence, early retirement, investing, saving, and passive income.

For 2018, Joe plans to diversify his passive income by investing in US heartland real estate through RealtyShares. He has 3 rental units in Portland and he believes the local market is getting overpriced.

Joe highly recommends Personal Capital for DIY investors. He logs on to Personal Capital almost daily to check his cash flow and net worth. They have many useful tools that will help every investor analyze their portfolio and plan for retirement.
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{ 39 comments… add one }
  • Make Wealth Simple March 23, 2017, 4:54 am

    Never looked at it in that way…

    Financially I am moving ahead quite well, because I put up the right “systems”.
    I’m doing less than I should on the health front, because I haven’t managed to set up a sustainable system tor reach my health goals. I need to take a look at that.

    TOT is on my shelf currently. I have two other books i want to read first, but looking forward to discovering Tim ferriss’ latest opus.

    • retirebyforty March 23, 2017, 9:15 am

      I hope you can put a system together for health. Money doesn’t mean much if you’re not healthy. This book is a bit on the fringe in the health section, though. Most people won’t identify with those elite aesthetes. Good luck!

  • Matt @ Optimize Your Life March 23, 2017, 5:01 am

    Tools of Titans was great. I got way more out of it than I expected I would. Also, if you are interested in Scott Adams’ approach there, I highly recommend his book How to Fail at Almost Everything and Still Win Big: Kind of the Story of My Life. It gives more explanation behind his approach and discusses what he feels has led to his success in various fields.

    I’m more of a systems guy than a goals guy, but I think that some situations are better for one than the other and that both are needed. If your goal is to become the CEO of your company, then that goal will prevent you from noticing and taking advantage of promotion opportunities by jumping to other companies. In some instances goals can cause you to tunnel on a path that may not be the best fit.

    You’re right, though, that having systems without goals can be frustrating. I’ve adopted a mix of weakly-held goals and short-term goals to address this in places where systems are appropriate. With a weakly-held goal I will set a long-term goal, but give myself permission to bail if a new path appears, and with short-term goals I can re-evaluate my goals over shorter time periods to constantly adjust my path based on what opportunities or outcomes the system produces.

    • retirebyforty March 23, 2017, 9:18 am

      Scott Adams’ book on my reading list. It sounds interesting and unconventional.
      Thanks for the feedback. Your approach is very methodical. I think it’s great that you give yourself the option to bail on a goal if something better come along. That’s a good approach.

  • Ste ve D Poling March 23, 2017, 5:04 am

    have i told you my simple 23,000 step weight loss plan? it starts with the “trigger” of my alarm going off at 4:57am each morning, then walking for a few hours on my treadmill. the reward of losing 100+ pounds doing this creates a keystone habit. so far i’ve lost 104 pounds. simple. not easy.

    • retirebyforty March 23, 2017, 9:19 am

      Wow, that’s a lot of steps. I think it’s awesome. I really need to change my lifestyle if I want to get that many steps in. Right now, 7,000 is pretty good for me. 🙂

      • Steve D Poling March 23, 2017, 10:26 am

        i started obese (and in denial about it) and just tried to hit the fitbit 10k recommendation. then it built from there. i created a system with a vague notion of “losing a few pounds” and didn’t even refine the weight loss goal until I’d created a habit. while considering how to set up systems you want to institute, I suggest the book by Charles Duhigg, The Power of Habit. its pretty easy for me to spend my online surfing, programming, and writing time walking on my treadmill. (I built a treadmill desk. $100 materials + a weekend.)

        • Len March 23, 2017, 1:30 pm

          Um… 104 pounds? Incredible. Way to go. I have about that much to lose and the idea of that goal seems very daunting but focusing more on the system seems more approachable.

          • Steve D Poling March 24, 2017, 7:40 am

            of course it is daunting. i didn’t plan on getting down to my grad school weight and maintaining it. I wanted it, but didn’t seriously believe i could do it. Hence the lack of before/after pictures. I didn’t believe i could do it “before.” Outcomes are best seen in the rear view mirror, b/c if you look at how distant they are and how slowly you are approaching them, you’ll despair. better to create systems and habits that focus on the moment and doing the right thing now. and a tracking system to measure whether you’re moving in the desired direction.

  • Apathy Ends March 23, 2017, 5:07 am

    I have always started with goals and then put thought into how we are going to achieve them. The system is usually automatic investments increased at some interval or when we get raises.

    Will have to add this book to my ever growing list.

    • retirebyforty March 23, 2017, 9:20 am

      I’d get it from the library. There are some great nuggets, but a lot of it wasn’t useful to me.

  • The Tepid Tamale March 23, 2017, 5:59 am

    Wow, this post hits home with me, hits really hard. While I have goals, many seem either impossible, or achievable only in the distant future. This has caused me to lose my drive, and I cannot ‘motivate myself’ to work toward them. I just reflected on this last night and realized I need to change my environment (Thanks James Clear), which is part of the ‘system’ that I need to set up. For me, I need the ‘goal’ to know what to work toward, but I need the ‘system’ to carry along during my current struggles. The timing on this is perfect for me, thanks, as I was just pondering through my ‘system’, this morning. Thanks Joe!

    – The Tepid Tamale

    • retirebyforty March 23, 2017, 9:23 am

      I’m glad this post helps. It’s really gratifying to see that I’m having a positive impact on someone’s life.
      Yes, you need to come up with some sustainable system that will help you toward your goals. Also, have some short term goals so you can tick those off and feel some sense of accomplishment. 🙂 Good luck!

  • Dividend Growth Investor March 23, 2017, 6:56 am


    Great article on creating systems for accomplishing goals. A system helps you stay the course in the initial grinding phase, when results are not very inspiring.

    For example, the first dividend payment I received was less than $1 from a Real Estate Investment Trust. I kept working at it however, saving money, investing it wisely, and now I am close to covering my expenses from investments. It is easy to get discouraged when you only earn $1 in monthly dividend income. By creating a system however, you can easily scale up. I believe that the skillset of investing is the same whether you invest $100 or $10 million. The skillset includes looking for companies, evaluating companies, buying them at attractive valuations, and then patiently waiting for the power of compounding to do its heavy lifting.

    As or blogging – I have a system that has allowed me to post 3 articles per week on average for over 9 years. It is all about having a system where I come up with ideas at random times, which I write down. I usually have a ton of posts in progress at various stages, and a ton of ideas which may never even make it to posts ( I have a limited number of years). To come up with ideas, I read a lot. So while I do not have a goal to write so much every day, I have a system to come up with ideas, think about it, and write them down.

    The nice thing about a systematic approach to reading is that you get to learn new ideas, and improve existing systems.

    Thank you again for this post that inspired me to think a little deeper.


    • retirebyforty March 23, 2017, 9:28 am

      Great comment! You’re right about the initial grind. Having a system will really help with getting through the first few tough months or years. It’s good to have intermediate goals too so you can take a break and celebrate.
      I like your blogging system. My system is almost the same. I write down ideas as they come up. I’d never do this if I don’t blog. It’s a great way to dive deeper into interesting topics.

  • FinancePatriot March 23, 2017, 7:09 am

    I completely agree with the author. I like the system of saving for financial independence, even if you don’t have an immediate desire. The hard part of retiring early is you not only have to save a lot, but you have to do it early enough so your investments have lots of time to grow. My wife and I didn’t get to a seven figure investment net worth overnight, it happenned as I turned 40 and she’s 39. Now I am looking at joining her as a two parent stay at home partnership, or early retirement 🙂

    Blogging is my next system. I figure even though I am not making any money today, as long as I write long, meaningful quality articles that people want to read, I can later promote the blog when I am retired. In the meantime I am going to continue to network and learn about it. One day, the blog will take off, but I think building an inventory of relevant and interesting articles is even more important than gaining readers at this point. I want my store to have plenty of inventory to consume when people visit my blog.

    On a side note, you have a typo above, Minimizig lifestyle inflation. Thanks FP

    • retirebyforty March 23, 2017, 9:30 am

      Exactly! I started blogging about early retirement in 2010 and quit my job in 2012. However, it didn’t take just 2 years to accomplish my goal. I was saving and investing for many years before that. Having a system that increase your wealth will give you a lot more options later.
      Good luck with your blog. You’ll also improve a lot as you keep writing. I’m still not a great writer, but I’ve improved a lot since I started. Thanks for the note. I fixed it.

  • Mr. All Things Money March 23, 2017, 8:59 am

    Having a system is essential to be successful in reaching ones goals and beyond. For my investments, I have an elaborate system of tools and guidelines to track and evaluate companies and my dividend growth income. This system has helped me stay focused and on-track and helped me become successful in my earlier goals of becoming FI and retire early.

    One thing that I’ve learned over many years while working at Intel and in my personal life is to put in the most effort where there is potential of highest future returns. It’s very much like investing, you have to evaluate your future returns and then use it to determine how much you should invest now. Effort has to be targeted and not aimless, at least that’s my opinion.

  • Mrs. Picky Pincher March 23, 2017, 9:12 am

    Great point! The systems you put in place actually help you GET the goals, instead of thinking about them. For me I like to make to-do lists and add things to my phone’s alarm clock.

  • Mr Crazy Kicks March 23, 2017, 9:13 am

    Interesting stuff. I’ve been listening to some Tim Ferris podcast recently, and was thinking of checking out that book. The bit from Scott Adams about blogging resonates with me. I’m not making any money now with most of my hobbies, but I figure if I keep practicing maybe one of them will become profitable.

    For now, it helps that I don’t necessarily need to make money, and have the time to practice 🙂

    • retirebyforty March 23, 2017, 12:58 pm

      That part about blogging is great for new bloggers. It’s hard to keep blogging when you don’t see much concrete reward. It just takes time for most people to become successful.

  • Mr. Tako @ Mr. Tako Escapes March 23, 2017, 9:22 am

    Perhaps systems work better when the end-goal isn’t a known quantity (at least at the outset). Systems get things moving in a general direction, but don’t direct the end destination.

    Like hopping in your car and heading north, even when you don’t yet know the exact address where you’re going.

    When I think about my own life — in areas where I don’t have hard goals but expect things to improve, I’ve put systems in place. Mainly, these are financial in nature.

    Great set of 2017 goals Joe!

    • retirebyforty March 23, 2017, 12:59 pm

      I think you got it right. Sometime, you just have to start the journey and make course corrections along the way. That’s life.

  • Mike Drak March 23, 2017, 10:03 am

    Joe , I agree with you about setting goals and then putting the systems (routines) in place to get you there. Sometimes as you are working towards a specific goal a better opportunity might spring up and that is what makes life exciting. The key is to do things that will open up new doors for you. Don’t put off joining Toastmasters it’s a real door opener!

  • Go Finance Yourself March 23, 2017, 10:42 am

    I’m right with you RB40. I’m big on setting goals. But for any goal you have to have a plan or system in place to get you there. I set several goes for 2017 that I discussed on my blog and for each of them I have a detailed plan to achieve it. As you said, I don’t think you chose one or the other. Put them together for the best results.

  • FullTimeFinance March 23, 2017, 5:35 pm

    Count me with you as well. The goal is where I want to go. The system is the day to day of how I get there. Without the goal why would I stay with the system and how would I know it’s effective? In Scotts case in the article there still is an unstated goal, make money from the action of creating a blog. The how to do that is the system which can be refined. But without knowing you wanted to make money from the blog or had some other reason for doing so, why would you keep doing it when the going got tough? Even enjoyment of producing a blog is a goal of sorts.

  • [email protected] Turtle March 23, 2017, 6:56 pm

    The story of Scott Adams blogging for practice without really knowing why and then down the road it enabled him to get paid for speaking kinda reminds me of Steve Jobs commencement address where he talks about taking a calligraphy class for fun because it interested him. Then later on in life takes what he learned from that class and creates the first computer with different typography.

    You just never know how your current life is going to impact your future self.

  • Adriana @MoneyJourney March 24, 2017, 12:24 am

    This totally makes sense. Also, the chicken and egg comparison is funny. You can’t achieve a goal without a system, just like a system won’t work unless it has a purpose.

    I guess we all create systems, without even being aware. I usually think of a big goal as a series of small ones, because they’re easier to achieve and having a good baby-step plan in place always helps!

  • carolyn March 24, 2017, 3:34 am

    I wish I had what it takes to retire at 40, but I am already a few years over the dreaded milestone. So, it’s all systems go for me to see if I can really accomplish my goals and retire by 50 perhaps

  • SMM March 24, 2017, 8:40 am

    “For me, it’s better to set a goal first and then create a system to accomplish that goal”

    Part of my system is to create little milestones along the way to accomplish a specific goal. That way you know if you’re on the right path or not or if adjustments need to be made (e.g., save more, workout a bit less if it a fitness goal or have the option to have a cheat meal).

  • gfaseed March 24, 2017, 1:00 pm

    I do think that having goals is absolutely crucially. But it’s really hard to achieve them if you don’t have a good system. Also it’s important to adapt the system as you go.

  • Travis March 25, 2017, 11:00 am

    Just a heads up, his last name is spelled FERRISS.

    After hearing Scott Adams on a couple different podcasts, and now reading this, I’m very much looking forward to reading his books

  • carolyn March 25, 2017, 11:43 pm

    I certainly agree that money is nothing if you don’t have your health with you. I am experiencing that at first hand at the moment

  • That Charles Life March 28, 2017, 9:31 pm

    Great article, I wasn’t aware Ferriss had a new book out. He is known for his outside the box thinking, looks like he hasn’t disappointed yet!

    I feel like I’ve subconsciously moved towards implementing systems rather than just goals. Seems more flexible, and like you mention the opportunities are endless.

    I hope you follow through with Toastmasters, I spent some time with them. It’s a great investment of time. You learn lots! Sounds like a system that could end you up in some of those ’embarrasingly lucrative’ speaking opportunties 😉

    Take care!

    • retirebyforty March 29, 2017, 9:19 am

      I really need to join toastmasters and improve my speaking skill. I’m getting worse and worse because I don’t talk to other people that much. Interviews are bad…

  • lyn March 28, 2017, 11:12 pm

    I think goal are important to achieve the unimaginable big things like becoming the top 1% richest but one don’t need that if the aim is to retire early. A good system can guarantee early retirement, same goes to fitness in general.

  • Alinda April 2, 2017, 6:48 am

    TOT is on my shelf currently.

  • Millennial Savings April 4, 2017, 2:59 pm

    I am a huge Tim Ferris proponent, but I tend to agree with you that it’s not “vs.”, but rather, how do systems help us achieve goals.

    I think goals are what drive us. Goals are something to look forward to achieving, the psychological thrill of “checking the box”…

    Systems are the means to achieve goals. Systems are tunnel vision, goals are the light at the end.

    Great post, love your stuff! As a new blogger, I have a lot to learn from you and will continue reading your posts!

    -Conor, Founder of Millennial Savings

    • retirebyforty April 5, 2017, 9:02 am

      Thanks for the encouragement. Good luck and keep blogging!

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