Resilient Reserve Fund: The 4th Step in the Hexavisionary Framework

Introduction

Luck is often perceived as a mystical force, but Dr. Richard Wiseman in his book "The Luck Factor" breaks it down into a practical formula: When preparedness meets opportunity, it’s often referred to as luck.

However, luck is not merely a chance occurrence; it’s the ability to seize opportunities when they arise. Unfortunately, many people find themselves on the losing end of what we call POOR—Passing On Opportunities Repeatedly.

In this context, "poor" does not signify a lack of money; rather, it describes the failure to act when opportunities present themselves.

The Resilient Reserves Fund (RRF), the fourth step in the Hexavisionary Framework, ensures that individuals are not only prepared for unexpected challenges but also positioned to capitalize on financial opportunities.

The Importance of a Resilient Reserves Fund

A well-structured Resilient Reserves Fund is crucial for financial security and growth. By allocating a portion of cash flow and accumulated savings to this Bucket, you create a robust financial cushion that can be utilized during emergencies or to seize investment opportunities that may arise. This approach emphasizes liquidity, which is essential in times when cash truly is king.

Cash, though, is to a business as oxygen is to an individual: never thought about when it is present, the only thing in mind when it is absent. - By Warren Buffett

Warren Buffett busts a cash myth". Warren Buffett's 2014 annual letter to the shareholders of his holding company, Berkshire Hathaway, www.valueresearchonline.com.

Historical Context: Lessons from the Past

Several events underscore the importance of maintaining a Resilient Reserves Fund.

Take, for instance, the 2008 subprime mortgage crisis. Read Wiki Article Here

During this tumultuous period, even banks were hesitant to lend money to each other, causing a ripple effect across the economy. Many affluent individuals faced financial challenges due to a lack of readily available cash. Many were losing their lifetime saving and the home.

Conversely, my cousin, an investment banker at the time, was able to purchase over 100 low-cost homes in the USA at nearly throwaway prices, all thanks to his Opportunity Bucket. This example illustrates how being prepared can allow individuals to seize lucrative opportunities that others cannot.

The Northeast blackout of 2003 Read Wiki Article Here

Similarly, consider the Northeast blackout of 2003, a massive electrical failure that affected parts of the USA and Canada for hours or even days. Banking operations were disrupted, and ATMs ceased to function, turning cash into king once more. Individuals with cash on hand had the advantage, showcasing how crucial liquidity can be in unexpected situations.

Strategic Allocation: Building Your Resilient Reserves Fund

At Hexavision, we mentor our clients to allocate a portion of their cash flow and accumulated savings into the Resilient Reserves Fund. Here are some benefits of this strategy:

1. Financial Security: The fund provides a safety net, ensuring you’re prepared for unexpected expenses or emergencies without derailing your long-term financial goals.

2. Seizing Opportunities: When market conditions are favorable, having cash readily available allows you to act swiftly and capitalize on opportunities that may arise, whether in real estate, stocks, or other investments.

3. Market Volatility Buffer: During periods of market fluctuations, having a well-funded reserves bucket can prevent you from having to liquidate investments at a loss. This preserves your overall portfolio value and allows you to ride out market downturns.

4. Peace of Mind: Knowing you have a financial cushion alleviates stress, allowing you to make decisions based on your long-term goals rather than being reactive to immediate financial pressures.

5. Building Wealth: With the right strategy, your Resilient Reserves Fund can also work for you. By finding low-risk, interest-earning accounts or investment vehicles for your reserves, you can keep pace with inflation while waiting for the right opportunities to arise.

Conclusion

In the journey to achieving total financial freedom, the Resilient Reserves Fund plays a vital role. It embodies the principle that preparedness, coupled with opportunity, creates the potential for success.

By adopting a strategic approach to managing cash flow and savings, individuals can protect themselves against unforeseen events and position themselves to take advantage of promising opportunities.

As you build your financial future, remember that luck is not merely a matter of chance; it’s about being ready to act when the moment arises. With the Resilient Reserves Fund in your corner, you can navigate life’s challenges with confidence and seize the opportunities that lead to financial prosperity.

Quick recap of your Total Financial Freedom Journey:

1. Keep More of What You Earn

2. Pay Only The Right Amount of Tax

3. Multiply Your Wealth With Uninterrupting Compounding

4. Never Lose Your Principal Invested

5. Work with a Mentor who has your best interest at heart

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