Reserve

Funds that are reserved for the use you want them for in the future, e.g. as a source of funds for a capital project or for retirement, are kept in an account called a reserve account.  Reserve accounts are the central command station of the Steady State Principle.  These form the largest of the three parts of your plan, uniting the pieces of your financial model and composing a large part of the Store of Intrinsic Value.  This is the place where funds have higher accessibility and usability compared to other accounts.

Risk Classifications

A risk is an uncertain event, which may be classified as positive or negative depending on the most likely outcome upon which it is based.  Undertaking a profitable business venture, weathering a storm without insurance, both of these are risks one might take.  Risk is commonly viewed in quantitative terms as a measure of dispersion of returns in a sample of investments in a portfolio about the mean return of the portfolio, or, as the range of possible outcomes of a project based on an analysis of possible future events.

The Flow of Money

There exist high-risk and low-risk areas in finance in which you have control to direct the flow of money.  These are both extremely valuable areas for you.  If you choose to work with WBC Risk Management Inc you will understand the types of accounts contained within each of these areas.  Money flows by itself to some areas, but a well-intentioned plan is required to channel flow to either the high-risk or low risk-areas.  Your reserve account is placed in a low-risk area of your plan and serves as protector for accounts in the high-risk areas.

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