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There are only two main ingredients for success. The first is to identify what is that you want and the second is to know the price you have to pay to get it.
Most of us, just keep dreaming about a good Job, a good home, good bank balance etc etc, but they just wdream and forget it, because they dream for so many things together, they never even recall them. More specifically we can say its a "fleeting thought". They never decide what is that they really want, and they never commit heartly to get it.
So the first ingredient is to decide what you want and your sincere commitment for it. Once you've decided what you want, then you have to think about the second ingredient, "Know the price you have to pay to get what you want", and then commit yourself to pay the price by defining your priorities and working towards it.
Many of us, who get past the first ingredient never proceed with the second one. They don't understand that you have to pay the price in full before you can claim your goods from a shopping mall. Same priciple applys with life. You have to pay the price, before you get what you want.
Goal setting can be taken as a process that helps you to decide exactly what is that you want, and then to pay the price in order to get it. It is a process that helps you put your efforts and energy on your targets through a systematic action planning.
Being said above, i hope you must have understoodwhy we need to set a Goal and how goal setting can be an effective approach for you to make your systematic action plans towards your Goal.