Post edited 6:11 pm – August 24, 2010 by srannells

Building a Reserve during a Time of Abundance

Disciplined Savings, A Way to Positively Affect Life Styles

By: Steve Rannells

In the Book of Genesis, Joseph proposed the simple process of saving one-fifth or twenty (20%) percent of each year’s profit in the prosperous years to avert pending disaster, both affecting during the years of abundance and providing for the period of shortage.

Joseph’s simple plan had the desired effect of building a great reserve that could be used in the years of shortage, but just as importantly, one of the most important parts of Joseph’s plan was the way to control the development of perceived needs during the years of abundance.  The savings plan was a major vehicle to slow the increasing consumption of the abundant profit and the expectations for available provision.  It gave the leadership and personnel ownership of the plan for survival by directly involving them, focusing all the people on the corporate issue of survival of the enterprise.  The disciplined savings of twenty percent in the prosperous yeas of abundance lowered the spending to eighty percent of the total production and implemented the method of building the reserve necessary for survival and preparedness during the years of famine.  Spendable income was reduced in the present by the savings plan, allowing the people to become accustomed to giving up part of the immediate gratification in preparation for coming needs.  The people lived with the eighty percent of the profit while building a reserve to be used when required.

 Insight:  In many societies, corporate savings and reserves are at an all time low, with spending at all time high.  More businesses have more material possessions than ever before, not necessarily possessions of continued worth such as gold, silver or even equipment and inventory reserves, but products, fixtures and supplies that will be worn out, consumed and discarded.  A twenty percent savings plan could cause a major upheaval to production and even ownership, travel, supply consumption, and advertising, not to mention the great American addiction for increased benefits

In this plan, the same process that provides the reserve to avert physical disaster in the lean years was also the way of avoiding emotional and morale disaster when the economics shifted from a time of prosperity to shortages

The Twenty Percent Savings Plan

The question was never “if” a reserve was needed in Pharaoh’s Egypt, but rather “when” it was needed.  The intent of the savings plan was to provide a reserve of provision to allow the enterprise to survive the catastrophic destructiveness of the extended famine and reduce their expectations for a living standard to a lower level to make the transition possible without major social upheaval.

The effect of the savings plan can be shown using this simple graph.  A lower standard of living and reduced spending during the prosperous times, forced by the savings plan, created the reserve that was used to survive in the time of depletion. 

The format of the plan was implemented and laid out with far reaching effects that only a person carefully prepared by God could understand and suggest.  Joseph proposed a plan that not only gives the needed results but builds the right attitude in the people to receive the coming change.  The attitude would be built in a time of peace and prosperity, encouraging the gratitude for the abundant provision during the time of shortage.

It is a lesson worth reviewing as times of shortage are looming large in today’s economy.