What are mid-term goals and why is it so important to define them? We all have short term and long term goals, but many of us neglect the crucial mid-term goals. We need to set mid-term goals because focusing on those long term goals can be extremely difficult. It’s hard to stay motivated when the payoff is so far off. Here is how I define these different types of goals.
Short term goals are things you can accomplish in less than one year. These are the type of goals I set every New Year. Short term goals should be achievable, measurable, and you should make progress on them every month.
Long term goals are things that take 10+ years to accomplish and we won’t see much progress from year to year. These are things like saving for retirement or being completely debt free. We don’t make quick progress on these goals and it’s easy to get discouraged. For example, it’s practically impossible to focus on saving for retirement when you’re 25. You have so much time left until retirement and you won’t see the end result for decades. Also, long term goals usually are moving goals. We don’t know how much money we need for retirement until we get closer to retirement. That’s why we need mid-term goals to bridge the gap between short term and long term goals.
Mid-term goals are things that you can accomplish in 3 to 5 years. Everyone has these mid-term goals but most of us don’t keep track of them. That’s a mistake because they usually get derailed if we don’t pay attention to them. Here are some examples of mid-term goals at various stages of life.
- Graduate from college
- Pay off the auto loan
- Buy a house
- Have a baby
- Become a VP in your organization
- Make it in the music/acting/art scene
- Become a millionaire or accumulate whatever amount that fits your current financial situation.
You should be able to make noticeable progress on these goals every few months or so. That makes them much easier to track than long term goals. Also, your mid-term goals should align with your long term goals. Every time you accomplish a mid-term goal, you should be one step closer to your long term goals and it’s an occasion to celebrate.
Set Big Mid-term Goals
Personally, I like to set just one big mid-term goal so I can focus on it. When I started Retire by 40 in 2010, my big mid-term goal was to retire from working full time in 5 years. The stars lined up and I was able to accomplish that a little earlier than I expected. It’s important to note that we had been saving and investing for a long time before I made that mid-term goal. We were almost there and just needed the final push to get over the finish line. If I just started saving for retirement in 2010, then it would have taken much longer to retire early.
Our next big mid-term goal is for Mrs. RB40 to retire by the end of 2020. It will be more difficult this time around because we don’t have as much income and the stock market seems to be taking a dive. We probably will need the full 5 years to accomplish this.
Recently, I’ve been dreaming a bit and I’m making this goal more complicated. We’ll focus on Mrs. RB40’s early retirement first, but 2020 is also a good time to get some other things done.
- Take a year off to travel. RB40Jr will finish 4th grade in 2021 and I’m thinking about taking a year off to travel. We could home/road school him for 5th grade. Then enroll him in middle school in 2022. It seems like perfect timing to me. He’s going to change schools anyway so let’s take advantage of it. It will get more and more difficult to home/road school as he gets older. This might be the only chance we get to travel extensively before he graduates high school.
- Simplify our real estate holding. We’re planning to move into our rental home, but that’s getting complicated by the school boundary redistricting. At this point, it would be best to stay put in our condo until he finishes grade school. We could sell off everything in 2021 and then move into our rental home when we get back. Not being a landlord would simplify my life quite a bit.
- Refocus blog. I think it would be great to take this blog on the road for a year. We could explore some retirement destinations and see if any of them is a good fit for us. By 2021, I probably would need a little time off from blogging about personal finance.
What do you think about my mid-term goal? This goal is very motivating for us and we’re working hard to accomplish it. I would love to travel for a year and see the world. We will still be in our 40s and should be able to rough it a little bit. Travel gets more difficult as you get older so I really don’t want to wait until we’re in our 60s. Also, I’d love to see if we can maintain our cost of living budget while traveling. It might even be cheaper to travel than to live in Portland. I guess it depends on how you travel. In any case, it would be a very interesting experiment to share with everyone.
To wrap it up, I think mid-term goals are very important. They are big goals that can change your life. That’s why everyone should set some big mid-term goals and work hard on them.
Do you set mid-term goals? Can you share some of your mid-term goals with us?
Image by Adam Kubalica
Passive income is the key to early retirement. This year, Joe is investing in commercial real estate with CrowdStreet. They have many projects across the USA so check them out!
Joe also highly recommends Personal Capital for DIY investors. They have many useful tools that will help you reach financial independence.