Wednesday, 30 April 2008

Dr Demartini's F.A.S.T. Savings Plan Will Make Millionaires

It is undeniable that in order to build up your wealth and maintain it, you need to have some sort savings plan in place. In Dr. Demartini's Secrets to Financial Mastery seminar on April 29, he introduced a powerful savings strategy that can potentially make you a multi-millionaire in next to no time, that's if you have the ability to follow it.

Although the concept behind the Demartini Forced Accelerated Savings Technique™ (F.A.S.T.) is very simple, the outcome can be very powerful. It basically involves saving an amount each quarter and then incrementing that amount by 10% every quarter. That's as simple as I can describe it.

Let's use some numbers and see how this technique works. We start with a savings amount of $1000 in the first quarter and will increment it by 10% every quarter. The incremental rate is the key to the "accelerated" part of the F.A.S.T. technique, as you will see below.

After the first year we would need to be able to put into our savings at least $1,331 per quarter. In the following years, we need to be able to save $1,949 (Y2Q4), $2,853 (Y3Q4), $4,177 (Y4Q4), $6,116 (Y5Q4).

For most people this savings strategy is a big struggle by the end of the fifth year, where you need to be able to save at least $6,116 per quarter. If you have a family to look after, it is likely that you won’t be able to put this much away solely from your fixed-income wage. This is when you are “forced” to increase your income streams in order to meet the savings requirement, and that is where the beauty of the F.A.S.T strategy lies.

An important fact presented by Dr. Demartini was “demand drives supply”. You will find that as your demand for more money exceeds your existing supply, you will start to look for other opportunities to increase your income. You start to tap into your creatively in order to produce additional income streams, for example, you might realise an opportunity to start a home-based online business. It is only when we start looking seriously that the opportunities present themselves.

Going back to the table above, we can see that from the 6th year onwards the savings amounts start to become drastically larger even though the rate of increase is still 10% per quarter. By the end of the 6th year we needed to save up $8,954 per quarter, and then $13,110 (in Y7Q4), $19,194 (in Y8Q4), $28,102 (in Y9Q4) and $41,145 (in Y10Q4), see the chart below. Only if you can create additional streams of income will you be able to put these amounts into savings. In most cases, the wage from your main job alone will not make you rich, you must create additional streams of income if you desire to become a millionaire and achieve financial independence within a period of 10-15 years.

[Click on chart for larger view]

When you put money into savings, it should be invested in the money markets, bonds, blue-chip stocks and/or properties in that order to minimise investment risk. It is reasonable to expect a long-term average return of around 10% p.a from these investments. If we apply this rate of return to our savings from above, with compound interest added, we could expect to have $1,147,972 worth of savings at the end of the 10th year using this strategy.

Depending on your lifestyle, $1 million in cash and investments in 10 years time may or may not be enough for you to retire on, but it would certainly help me achieve my quest of becoming a millionaire by 2018. If you were to continue saving with this strategy for just a few more years, you would have saved up an additional and staggering $2.5 million plus interest in just 5 years! Whether you can achieve these levels of savings directly depends on your ability to continue to increase your income streams.

As you can see, Dr Demartini’s Forced Accelerated Savings Technique is a potentially very powerful strategy in helping you achieve your financial freedom.

Related Articles: My Savings Plan In Action | Money Magnetism by Dr Demartini


mtanga said...

great idea on paper... but as mentioned it would require a lot of discipline and creativity... by the 5-6th year you would really need to cut back on a lot of things - vacations, that new plasma tv, the ninetendo wii, come onnnn... i hate savings plans that do not factor in expenses...

Kimsta said...

Hi mtanga, you would only need to cut back on expenses, as you've mentioned, if you have only one main FIXED income stream, like from your day-to-day job.

What if you could create multiple streams of income from new business opportunities. What if you could convert all your skills and creativity to CASH? How much would you be worth then?

That's the challenge you and I face. And whoever can convert their talents into money will obviously be rewarded for it big time. Best of luck.