Skip header Skip to main content
A woman sits on a couch, thinking about her investing goals.

Move Beyond Positive Thinking and Make Your Investing Goals Realistic

Written by Samantha Lamas, Morningstar | Published on March 23, 2023

Investing Academy.  Knowledge Supports Success. Visit now.

This Morningstar‡ report was first published on March 10, 2023.

Our goals represent the manifestation of our dreams, whether that be saving enough money to have a well-stocked emergency savings fund, having enough for a down payment on your dream home, or even just finally going on that expensive vacation. However, no matter how passionate we are about our dreams, too often they get pushed to the wayside or thrown into the gutter. What can we do to persevere? Well, for starters, we can look to psychology.

The negative impact of positive thinking

Research has pointed to two key procedures to help increase goal commitment and performance:

  • mental contrasting
  • implementation intentions

Mental contrasting is the process of imagining your desired future and then identifying obstacles in your present reality that block the realization of that goal. In other words, this process prompts you to reap the benefits of achieving your goal but then forces you to face reality. This may sound cruel, but this process can activate your desire to attain that goal, prompting cognitive, emotional, and behavioral changes. In comparison, just letting yourself daydream about reaching your goal allows you to feel like you've already attained it, prompting low energy, effort, and success.

Implementation intentions are a natural next step to mental contrasting. To put it simply, implementation intentions are if-then plans. For example, “If I face obstacle X when striving toward my goal, then I will do Y to mitigate any negative impact toward my progress." Once a person has identified the obstacles they face, they can create a plan to prevent those obstacles from derailing their progress when they inevitably arise.

A research-based strategy to help you stick to your goals

Combining these two procedures, experts in the field have developed a four-step strategy to help increase goal commitment and performance via nonconscious cognitive and motivational processes — Wish, Outcome, Obstacle, and Plan, or WOOP:

1) Wish: To start, imagine your wish. This should be a goal that is challenging but still within reach.

2) Outcome: Next, imagine accomplishing that goal. In a few words, write down a few good outcomes of achieving this goal.

3) Obstacle: Now, it's time to bring things back to reality. Identify a few obstacles that are blocking you from fulfilling that wish.

4) Plan: With those obstacles in mind, create a series of if-then statements to help you prepare for those obstacles before they happen.

As an example of this process in action, consider the following:

1) My wish is to save enough for a sizable down payment for a car in a year.

2) My best possible outcome is driving around in a 2023 Range Rover SE by next winter.

3) My obstacle is, naturally, overspending. Here are a few if-then statements I can use:

  • If I overspend one month, then I'll save extra funds the next month by immediately putting money directly into my savings account when I get paid.
  • If I overspend on dining out one month, then I'll suggest planning potluck nights to help cut costs.
  • If an emergency pops up one month, then I'll increase my saving amount for the following months and, if necessary, consider shifting my timeline out by one month. (Having some flexibility is good!)

Dreams into reality

To sum up, dreaming about achieving your goals is fun, but it can actually hurt your progress unless you proceed by acknowledging present-day obstacles. Following a guiding process, such as WOOP, can help you move past your dreams and make them a reality.

RBC Direct Investing Inc. and Royal Bank of Canada are separate corporate entities which are affiliated. RBC Direct Investing Inc. is a wholly owned subsidiary of Royal Bank of Canada and is a Member of the Investment Industry Regulatory Organization of Canada and the Canadian Investor Protection Fund. Royal Bank of Canada and certain of its issuers are related to RBC Direct Investing Inc. RBC Direct Investing Inc. does not provide investment advice or recommendations regarding the purchase or sale of any securities. Investors are responsible for their own investment decisions. RBC Direct Investing is a business name used by RBC Direct Investing Inc. ® / ™ Trademark(s) of Royal Bank of Canada. RBC and Royal Bank are registered trademarks of Royal Bank of Canada. Used under licence.
© Royal Bank of Canada 2023.

‡ All other trademarks are the property of their respective owner(s).

Any information, opinions or views provided in this document, including hyperlinks to the RBC Direct Investing Inc. website or the websites of its affiliates or third parties, are for your general information only, and are not intended to provide legal, investment, financial, accounting, tax or other professional advice. While information presented is believed to be factual and current, its accuracy is not guaranteed and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the author(s) as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by RBC Direct Investing Inc. or its affiliates. You should consult with your advisor before taking any action based upon the information contained in this document.

Furthermore, the products, services and securities referred to in this publication are only available in Canada and other jurisdictions where they may be legally offered for sale. If you are not currently resident of Canada, you should not access the information available on the RBC Direct Investing Inc. website.

Electric vehicles on a background of trees.

Where is the Electric Vehicle Market Headed?

Decoding the Electric Vehicle market for investors.

Man surrounded by bills looking through telescope

How Travel Can Affect Your Investing Strategy

Here’s why time spent away can open your eyes to emerging trends, industries and markets.

How To Ask for a Raise in This Economy

How To Ask for a Raise in This Economy

Asking for a raise in times like these may seem like a tough proposition, but you have more going for you than you think.

You Know More Than You Think

A guide to investing in stocks.
Find out more