Referencing the natural flow of money, we use the simple terms safe tank and risk tank to indicate safe and risky areas where accounts may reside into which money might flow.
Your Private Reserve Account
At WBC, we like for everyone to own a private reserve Account. This account is in your safe tank with a lid on it! Your money will not have a chance to evaporate out of this tank like it does when it flows into more risky tanks.
Access to Capital is Key
With your private reserve Account, access to capital is key. How do you feel liquidating an investment when you need access to the money? Is there really ever a good time? Wouldn’t you prefer never again worrying about what the market could do to your nest egg but feeling safe that you own a highly accessible reserve, growing in value no matter what happens in the market? Not having access to capital causes strain on an organization’s entire economic model!
Uninterrupted Compound Interest
One extremely important characteristic of your private reserve account is having the money working for you with uninterrupted compound interest. Look at each word:
uninterrupted: Even when you’re using money in the Private Reserve Account, the entire amount of funds in the account is growing without interruption.
compound: The longer is the timeframe allowed for growth of money in the account, the more the interest you have already received on that money has been allowed to compound – it takes time for compounding to happen.
interest: We want the account to be working for you, which means it receives interest on the entire fund of money, and be compounding that interest back into the account in a tax-advantaged manner.
Your private reserve account should provide many additional benefits, and you want as many as possible because the private reserve account is the hub of your entire financial model!