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Lesson 11. How to Pick Stocks > Determining Your Objectives - Pg. 59

How to Pick Stocks 59 needed to work a little harder, when I could take a little more risk in my investments, and when I could take a little break. In addition, that measurable $10,000 goal affected my day-to-day life in that I knew when I needed to clip coupons, when I could afford a vacation, and how much of my annual bonus I could spend as opposed to how much I needed to save. Having that benchmark of $10,000 is what got me, if a little late, to my goal. It is very difficult, if not impossible, to reach a goal without having one. Think of it this way: You are a professional baseball player. You want to improve your batting average to .300, so you stand at the plate and keep swing- ing the bat ... without a ball to hit. In theory, you would certainly improve your swing and therefore your batting average, but without a ball to hit you really have no idea whether you are getting better or, more importantly, whether you are getting closer to your goal of batting .300. Without the ball, it's all guesswork. Investing works on the same principle. You've got to have balls. Benchmarking Your Goals That $10,000 goal is only one goal on the road to a larger goal of mine, owning a townhouse in Manhattan. When determining your goals, often the end goal is a big one. That is fine, but if your sole goal is one that is going to take some time to achieve, you may get too discouraged and quit before you reach it. Setting up markers along the way in the form of smaller goals will help you measure your progress. In addition, as humans, we often need a little pat on the back for all our hard work, and these more-minor goals will provide frequent pats, rather than having to wait many years for one big pat on the back. Tip Determine at what points and by what methods you will chart your progress toward your goal. This often entails dividing your final goal into smaller, more easily achieved goals.