Better decisions result in more success. Better decisions help with better solutions to problems, improvements in performance, and the ability to achieve the goals you set.
A common goal is to become wealthy, to be a millionaire or to earn $200,000 a year. I want to tell you why you should avoid this trap based on two reasons:
Driven by Performance
Money is an outcome measure, not a performance measure. If you love to bake, then some performance measures are the number and quality of the loaves of bread you produce. By focusing on performance you are motivated to tweak your process, improve your ingredients and find ways to supply your delicious bread to hungry consumers. Performance measures are action-oriented.
If you charge money for your delicious bread, then one outcome of your performance will be the money you receive. This outcome measure can be helpful, it can be used to benchmark if your bread is more or less delicious than the bakery next door. Regardless, the outcome does not drive performance but rather is a lagging indicator of relative success. I say relative, because it is only a comparison to other bakers.
Static vs. Dynamic Measurements
When you set a goal to lose 20 lbs. that outcome is static. There will never be a time when a pound of oranges ceases to be a pound of oranges. If you bake bread, a 20 lb. bag of flour will forever remain a fixed measure. On the other hand, money is not fixed but dynamic.
If you set a goal to earn $1,000,000 this outcome is constantly fluctuating. Each day the value of currencies rise and fall. Sometimes currencies crash or are devalued. If you are baking bread and the price of grain skyrockets it is a factor out of your control, yet it impacts your goal, right?
While an admittedly extreme example, in 1922 a loaf of bread in Germany cost 163 marks. By November of 1923 that same loaf cost 200 billion marks! Just think about anyone living in Germany who set a goal in 1921 to earn 200 million marks within two years. How would it feel to achieve your goal and not be able to afford a loaf of bread?
The Bottom Line
I recommend you never set money as a goal. Instead, focus on your performance and results will come. Try to use fixed outcomes, not outcomes that will fluctuate. I’m not saying that money as an outcome measure has no value, just be careful not to fall into the money trap.
Richard Feenstra is an educational psychologist, with a focus on judgment and decision making.
Bobby Hoffman is the author of "Hack Your Motivation" and a professor of educational psychology at the University of Central Florida.