Some portion of your funds will be reserved for your use in the future, as a ready source of capital for a project or for retirement. These funds are kept in an account called a reserve account. Reserve accounts constitute the central command of the Steady State Principle. This is the big dog. Reserves often form a high percentage of your Intrinsic Value Store, and will unify the pieces of your entire financial model. This is the place where funds have more accessibility and usability compared to other accounts.
The Reserve portion of the strategy is engineered to earn a certain stable and competitive total return through dividends, compound interest, and tax efficiency. The fundamental nature of the reserve account is never overstated. It is the lower level of risk this account brings to one’s overall strategy that allows one to more confidently take higher risk in other accounts.
The Nature of Money
By its very nature, money has a certain flow associated with it. There exist high-risk and low-risk areas in finance where you have the control to direct that flow of money. These areas, high-risk and low-risk, both have the potential to create amazing value for your future.
Money flows by itself to a few other areas, namely the lifestyle area, and this can be dangerous if left unchecked. Also, the misguided direction of money to only high-risk areas can be dangerous as well. Reserve accounts are placed in low-risk areas of your plan and serve as protectors for the accounts in high-risk areas.
What WBC Can Do for You
If you choose to work with WBC Risk Management you will take advantage of a full understanding of the types of accounts contained within each area of your finances. You will also gain an understanding of how to best use these accounts. You can trust WBC’s expertise in managing your assets with your best interests being of utmost importance. WBC will work with you to structure a plan devoted to capturing the efficiency of the low-risk areas and the profitability of the high-risk areas.