Continuing on flexibility and adapting to situations, I’d like to add one more chapter. Setting long-term goals is a very good thing. But getting there takes a lot of time, and a lot in your life can change. Say you’ve planned that your income next year will be $30,000. Fine if you’re absolutely sure of that income and can say with high confidence: “In a year I’ll have this money in my pocket” — so you can plan around it. But what if the chance that this or that sum will be in your pocket next year is barely 50–60%?
For that we need several plans for the year. You can have anywhere from two to five. You might call them pessimistic, optimal and optimistic, or something else. I think three is enough, though in my own plan for 2025 I have four from the start. For the pessimistic plan you need to allow for a case where you don’t get the amount you want from current income sources, but you still need it. Then you should spell out additional income sources — where you can get that money. That might be some temporary side work, your own small business, or switching to a more stable job. The optimistic plan can assume an ideal situation where current income sources — whether your job or passive income — keep bringing in money and you get the amount you need for the year. Intermediate plans, of which there can be one or several, should be based on a more average, realistic situation. There you might describe cases where, for example, you won’t have that income for the first couple of months of the year but then reach your target earnings. Or the opposite: if in the first couple of months you get the needed amount on average, but then there’s a strong chance that income or salary will drop a lot. In those cases you should allow for looking for a new job, side work, and other legitimate income sources.
It’s important to remember that by taking a second job or temporary side work to keep to your financial goals, you partly give up “time” goals — ones that need not so much money as personal time. I will cover what kinds of goals there are and how to set and plan them for the year in the second book.
So with several plans for the year you’ll be better prepared for different moves and situations than if you just wait for some unpleasant surprise to pay you a visit. That said, if you’re fully confident in your income and your time, a single plan for the year is more than enough.
