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The Cost of Waiting

The Cost of Waiting: Delaying investment decisions for Condo Reserve Funds incurs a significant cost—losing 16.5% of annual interest potential. With rates at 5.00%, a 60-day delay amounts to 0.82%, costing an average Reserve Fund of $400,000 $3,280 annually. Lambda eliminates this cost, providing real-time rates, visibility, and expert advice at no cost.

Cost of Waiting

Every morning, the alarm clock is set for the ideal time to wake up – Shower, get dressed, make breakfast, pack lunches for the kids, get them to the bus stop, and get to your job to start the day. But what do you do? Well – in our house, the snooze button, or ‘Alexa snooze’ is heard daily, sometimes multiple times… So what? Well the cost of 10 minutes more sleep needs to be paid out of somewhere, and something is done less than ideal as a result.

Ok – this isn’t a self-help blog (I’d be the pot calling the kettle black) – so how does this relate to Condo Reserve Funds? Well, it’s that cost of waiting concept. Condo Boards get and review their financial statements monthly. Usually it takes the manager almost a month to compile the statements. If there are reserve funds to invest, or a GIC that matured (with Lambda you see those right away), the funds have usually been sitting in a bank account earning no interest for at least 45 days. Then the board, and the property manager need to decide what course of action to take, get rates from their bank (with Lambda you can get those real-time), and hopefully make a “timely” decision to invest, provide directions to the bank, and if everything goes perfect – soup to nuts 60 days has occurred.

Ok – so what? Well, all this time has a cost… but how much? Well, with rates at 5.00%, 60 days will cost the Condo Reserve Fund 0.82% (16.5% of the annual interest potential). With an average Reserve Fund of $400,000 that is a cost of $3,280 annually.

At Lambda, because we focus solely on Condominium Corporations Reserve Funds, we are setup to reduce or eliminate the Cost of Waiting. We have 25+ Financial Institutions with real-time rate availability, our platform provides real-time visibility into GIC maturities, and we will help and advise Boards and Property Managers on which FI and term to select. All for No Cost, and No Commitment. Not only are our rates typically 25-50% better than the posted rates at the bank, but by facilitating prompt decision making and visibility, we increase interest revenues the 16.5% above.

So – don’t hit the snooze button, let us get your Reserve Funds out of bed, and earning interest for your Condo Corporation.

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