Chapter 2

The Purpose and Importance of Reserves

In both my financial advisory practice and in my military career, I am experienced enough to understand that bad things are going to happen from time to time. Although all of us can learn from our mistakes and perhaps avoid similar ones, it is naive to think that new and unique challenges aren’t going to confront us in the future. We can see a similar pattern in the wars in Iraq and Afghanistan. In both conflicts, the enemy discovered quickly that direct confrontation with U.S. forces did not turn out well for them, so they adapted to using improvised explosive device (IED) attacks. As we countered with more resistant vehicles, they again adapted to other tactics such as infiltration of the Afghan security forces to attack us from within. The point is that it is folly in both investing and in warfare to think that you can permanently prevent bad things from happening or prevent the situation from evolving. Therefore, we must maintain constant diligence to succeed financially and on the battlefield.

Most of the time, for instance, our troops aren’t under hostile fire in Afghanistan, but if they don’t stay diligent about how they will react in those negative situations, then it can turn deadly. If they don’t know exactly where their weapons are on their body, that they have been inspected and maintained repeatedly over time, and that they have practiced how to draw and fire under highly stressful circumstances, then they face greater ...

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