Monday, 19 May 2008

My F.A.S.T. Savings Plan In Action

Today I am implementing a regular savings plan based on Dr Demartini's F.A.S.T. method which I talked about in the post on "Dr Demartini's F.A.S.T. Savings Plan Will Make Millionaires". But instead of putting money away for savings on a quarterly basis, I will do it on a monthly basis. It will supersede my existing savings plan.

The amount to be put up for savings will be according to the following table, which I have created (click on image to enlarge).

F.A.S.T. Monthly Savings Plan
If you look closely, the savings amount is not constant but increases by a rate of 3% per month (the F.A.S.T. rate). This means that if we started this savings plan at $1,500 in January 2008, we would need to be able to save $1,688 in this month and $2,076 in December 2008.

I have chosen the F.A.S.T. rate to be 3% per month so that it allows me to become a millionaire within 9 years and almost a multi-millionaire just one year after that (provide I can follow the plan closely). Varying this rate affects the savings plan significantly.

The money saved up monthly is expected to be put into a low risk, low fee, savings account, which is currently earning a nice 7.00% p.a. But let's assume the average cash interest rate for the next 10 years is 5% p.a. (in Australia).

The beauty of this strategy is that it forces us to look for new ways to increase our income all the time in order to meet the savings requirement of the plan, which can get pretty demanding by the 4th or 5th year.

So, the first couple of years of this plan is manageable, but soon enough I will have to increase my income significantly. It will be a good challenge!

Note: If you want the MS Excel version of the above table please contact me.

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