Tony Robbins has a really great way of managing savings so that you gain the benefits of long term compound interest and still enable yourself to have fun and make the most of your money, I have modified his formula slightly to create a slightly easier to remember process….

We are going to take 10% of your income and work on that for this process…

So it’s very important that you understand that you need to take this 10% BEFORE you pay any personal/household bills ,otherwise sometimes you will not have enough left to put anything into your savings and it is important that this 10% is extracted and allocated before you have any opportunity to “Choose” to spend it on something else.

We are then going to consider 3 “buckets” for this money:

  • Bucket 1: “Long term savings” bucket – for us in the UK, this would be an ISA, but any long term fixed interest savings would work for this, the point is that this account will grow over the long term and will benefit from compound interest, this should be a rock solid safe place for your money.
  • Bucket 2 “Growth” bucket – this is money that you can use for riskier shorter term investments, such as houses you are renovating for a quick sale, shares, gold/silver, currency trading etc (BTW if you dont think you can afford to invest in property check out
  • Bucket 3 “Dreams” bucket – this is where you store your money that you will use for fun stuff, such as holidays, flat screen TVs, big nights out, small nights out, treats etc

So you take 10% (eg £100) of your INCOME and allocate it like this:

  1. Bucket 1: 50% (eg £50)
  2. Bucket 2: 40% (eg £40)
  3. Bucket 3: 10% (eg £10)

When your “Growth plan” bucket produces a “win” (eg £10), which depends on what you are investing in – eg you buy a house, do it up and then sell it, then the profits from that would be a “win”, or if your shares pay a dividend, or you sell them at a profit then you split that “win” up like this:

  1. Bucket 1: 40% (eg £4)
  2. Bucket 2: 30% (eg £3)
  3. Bucket 3: 30% (eg £3)

When there is enough in your Dreams bucket, you can spend it on something fun… but NOT until there is enough money in it….

EG, INCOME for 1 month = £1000
then put £100 into savings like this:
£50 into bucket 1,
£40 into bucket 2,
£10 into bucket 3
If EG Bucket 2 makes a £10 growth,
then put:
£4 into bucket 1,
£3 into bucket 2,
£3 into bucket 3

If you want to know more about compound interest, consider this little question… Would you rather have an advent calendar (25 windows) with £1,000 in each window or one where you get 10 pence in the first window, 20p in the second window, 40p in the 3rd window, 80p in the 4th window (doubling each day)?

Well in the first instance you would have £25,000 in total by Christmas day in the second instance you would be getting nearly £170,000 on Christmas day and in total would have received £335,000

What great low cost investment opportunities do you know of? Let me know in the comments below…

(UPDATE: September 2016)

Since this original post in 2014, I have put £10 per week into a savings account and in late 2015 I had over £500 in my savings account. I then put £100 into which is now worth £106.35 (6.4%) and £100 into which is now worth £105.30 (5.3%) so that’s some pretty good results really in the regular scheme of things! I have pasted my dashboards from both below:

Property Planner

Property Partner


Funding Circle

Funding Circle September 2016

(Update: September 2017)

my £100 investment in both accounts has now grown by 13.64% and 14.98% respectively, which is aroud 7% and 8% APR! Screenshots below:

Property Partner

Property Partner September 2017


Funding Circle

Funding Circle September 2017