Collateral Capacity

Introduce the collateral capacity concept.

Let me introduce you to a new term - collateral capacity. It simply means the amount you have in your private reserve account that can be collateralized. There are three things that can increase your capacity. The first is contributions into your tank. The second is internal growth on funds already in your tank. And the third is lien reduction. Now, once you're made all the contributions that the tank will hold, and it's growing at its maximum potential, and you have no liens, your next alternative is to get a larger tank.

Notice you are still earning compound interest on money you have in your tank including the money you have in a collateral position.

No math presented on this screen.