Most individuals don’t think in terms of internal and external goals. Rather, they just focus on what they want, and more specifically, what they want right now that they think will make them happy. But there are major differences between internal goals and external goals and knowing the difference can lead to very significant differences in wealth over a lifetime.
“A goal is a dream with a deadline.”
– Napolean Hill
I slowly discovered over time that accomplishing my internal goals was far more important than accomplishing my external goals. As a result, I’m far more at peace with myself. It makes it easier to walk my own path and be independent rather than follow the herd once I learned to focus my spending goals.
Let’s first discuss the difference between external goals and internal goals. External goals are those that are pursued “outside of” our inner self or soul. External goals are often measured or in part based on physical properties or by what somebody else thinks (or what we think somebody else will think if we accomplish the goal).
Internal goals are those where success is measured “inside of” our inner self or soul. Internal goals are not measured by anybody else other than ourselves. Internal goals are free of the judgement of others. The only thing that matters in an internal goal is how we feel about ourselves.
A few examples to highlight and contrast the two types of goals;
- Buying a new house
- External goal – “Buy a house inside of a country club so I can network with potential clients and impress others.”
- Internal goal – “Buy a house that makes me feel secure and comfortable.”
- Buying a new car
- External goal – “Buy a sports car that will really make heads turn towards me.”
- Internal goal – “Buy a car that makes me feel safe, successful and fits my personal needs.”
We often think that by accomplishing an external goal, that we will automatically accomplish our internal goal. This is usually along the logic of, “If I can buy “X” (external goal), then I will be happy and feel great (internal goal).”
But what we often discover is that once the novelty of the new item (external goal) wears off, not only are we not happy, we can actually be less happy than when we started. The goal turned out to be completely empty.
Imagine how many people say, “If I buy a McMansion in this exclusive neighborhood, then everybody will see what a tremendous success I am and I will be the envy of all my peers.” That’s an external goal that is trying to service an internal goal (feel good/proud of oneself).
But then we discover that our lives are still not perfect. We are less happy than before because at least before we bought the new house we could dream about how owning the McMansion would make everybody know how great we are and how happy we would be. When we buy the McMansion we have to start paying the bills on it. We have to maintain it. We have to fix it. We still eat alone in it and don’t use the other 14 bedrooms in it. The house really wasn’t a home that fit our personal needs. Rather, it was a physical structure that costs enormous dollars. It was bought to impress others, not ourselves, and now we are stuck with it. It didn’t make us happy and diverted tremendous financial resources away from our overall wealth plan (or to things that would impress ourselves).
Happiness from wealth building is usually the result of accomplishing internal goals. Accumulating wealth will make you feel;
- safe,
- secure,
- peaceful,
- optimistic,
- and good about your future.
When we do things to impress others, we often find that we don’t end up happy. We often just waste a lot of money. Mostly because when it is all said and done, “other people just don’t care” and because we didn’t do it for ourselves based on our own sense of self.
I often recommend to people before they make a large purchase to ask themselves, “If nobody else ever ends up seeing this purchase, what would I buy for myself?” There are still plenty of people that would buy a beautiful home in the mountains or on the beach. There are still plenty of people that would buy a finely engineered car because they love the car for themselves. But it at least helps you get a sense of your motivations in buying something and whether it will really end up making you happy or not once the novelty is gone and the money is spent.
What would you spend money on even if nobody else would ever know what you owned? Share your answer on Facebook, Twitter, or LinkedIn.