What is the Proper Allocation of Reserves?

by Wes Bridel on January 4, 2010

in Stewardship

Building up your different forms of savings is wise

Building up your different forms of savings is wise

It’s impossible to give a one size fits all opinion on the best allocation and diversification of your Reserves.  It’s best when we work together to determine this based upon your personal situation as well as which of the savings vehicles that you feel best suit you after you understand the advantages and disadvantages of each.  Every person is different and this should be interactive to find the best allocation for you.

That being said we want to give you a sample savings/reserve plan here so that you can begin thinking about ways to structure this and if you’re interested in talking with us about this we’d be happy to discuss this together.  Be sure to jot down all questions and thoughts that come to mind.  Some of the people that we work with are fully able to do each of the things in this example and even add more savings to the areas where they feel are wise.  Many others are not able to do all of these things because they have not yet built the savings.  Don’t be discouraged if you are in this second group.  You must start somewhere and as you’re diligent in your stewardship, you’ll be surprised how quickly your savings will grow.

We’re going to make the assumption of one and a half years of Savings/Reserves with Monthly Family Expenses of $5,000.

Dollars
One month of monthly expenses hidden safely in your home
One month of expenses in your Expense Account
One month of expenses in your Rainy Day Fund
Twenty percent of Gross Income each month going into your Wealth Gate each month.

Whole Life Cash Value
Two months of expenses left as cash value in your Storehouse.  Either immediately or over time you will have more than this.  A decision must be made whether to keep this cash value in the most highly efficient Dollar vehicle of Whole Life or whether to keep your Dollar savings to the bare minimum.  To reduce your Dollar holdings within the policy you can either access it as collateral through a loan or simply withdraw the funds to diversify that value into the options below. It is typically preferable to access a collateralized loan using your cash value unless economic conditions lead to a withdrawal making more sense.

Gold
Six months of expenses bullion at home (this amount could be much higher &/or you could begin to look at the other gold options listed).

Silver
Three months of highly divisible 90% “junk silver” (this amount could be much higher &/or you could begin to look at the other silver options listed).

Currencies

Three months of expenses in a Currency Fund &/or International Currency CD.

This post is Part 15  in the series A Few Ways to Prepare. To use this as a growth tool to better understand your own calling, you might start by reading Pt 1, Pt 2, Pt 3, Pt 4, Pt 5, Pt 6Pt 7, Pt 8, Pt 9, Pt 10, Pt 11, Pt 12, Pt 13 and Pt 14.

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