Tuesday 27th September 2005 AD
"THE POWER OF BUILT-IN-RESERVES"
(The Discipline To Save ~ Part 3)

Peter Daniels is well known for saying "the only thing that is constant is change". It is also true that change is no respecter of persons, and can come suddenly, dramatically and without warning. Often change is good, but at other times it can seem like a more bitter pill to swallow. We have been looking at the seven Discipline to Save principles ~ today number three;
"The Discipline to Save PROVIDES BUILT-IN-RESERVES"

David and Chris were clients and good friends. Both hard working and smart, together they had built a large and successful construction company. Despite the strain that a growing company puts on resources, these guys understood the need for corporate savings right from the outset, and overtime they had accumulated a reasonable parcel of savings.

One morning as I reached the office, Chris was on the phone; "we have to sell some gold and need the funds wired to our account", he urgently stated. "No problem, it will happen today" he was immediately told. Feeling relieved, he asked to be patched through to me. "What's going on Chris?" I asked.

Chris went on to recount one of those classic 'Murphy's Law' tales. To tackle a sizable development project, David and Chris had partnered with another large company, and to concentrate on the new venture, they had scaled back on some of their traditional core business. Things started to go wrong with the new development, so they had dipped into their normal company cash-flow, and now, their partner double-crossed them and pulled out, leaving them stretched, over-budget and out of time.

How many times have we seen people toil long and hard at an enterprise, career or endeavor only to lose it all JUST before their tenacity, acumen and labor have paid off? Why? All to often it is because they lacked built-in-reserves to fix a temporary problem.

The Discipline to Save PROVIDES Built-In-Reserves. Regularly these Reserves are being further developed and enlarged through further savings. While the strategy should be to never need to call upon them, savings do provide those lifesaving reserves in times of emergency. It is worth remembering that while savings can be rebuilt, labor lost through insufficient reserves is forever.

Over the next few months David and Chris tapped almost all of their savings before they eventually turned the project around and finally got their company back on track and back in the black. "That was a close call with financial disaster" David confided later. 

Today their company is once again moving along nicely and David and Chris are back to steadily rebuilding their Reserves through their Discipline to Save.

People living in today's world are more indebted than any other time in living history. Just fifty years ago "saving" was normal and prudent, but in today's Western World savings have fallen to zero. What has changed and why?

"The Discipline to Save Provides Built-In-Reserves" is a basic but important principle, and is the third in our seven "Discipline to Save" principles.

Best Regards - Philip Judge pjudge@anglofareast.com