Governments have reserves. Banks have reserves. Large corporations have reserves.
Entrepreneurs should think strategically about reserves too.
I think of a Strategic Reserve as capital designed to do more than sit idle.
What a Strategic Reserve does
Its jobs can include: protect. Compound. Create liquidity. Create opportunity. Reduce forced selling. Increase optionality.
The worst time to need capital is when everyone else needs it too. A reserve lets you use liquidity and borrowing intelligently rather than being forced to sell assets at bad times.
It depends — and that's the point
The exact strategy depends on the individual, business, risk profile and stage of wealth. There's no universal number. But there is a universal principle.
Don't just earn money. Build a balance sheet.
Key takeaways
- —Reserves aren't idle cash — they're capital with defined jobs.
- —A reserve's biggest benefit is never being a forced seller.
- —The right structure depends on your business, risk profile and wealth phase.
About the author
Jay Altman is a Wall Street Journal bestselling co-author of Million Dollar Identity, the CEO of Two Comma Boss and CUE Capital, and has coached entrepreneurs since 2019. He built the Two Comma Boss AI agents and the Two Comma Boss Wealth operating system.