Spend, Don’T Save: How to Improve Your Financial and Physical Health by Powerspending

By Frederick W. James

Many things in life are more important than money. Just about all of them cost money. If you want more of these things in your life than you have right now, author Frederick James offers methods to help you get there.

Learn how to apply established behavioral and financial theories to improve your everyday life. By taking control of your finances, youll be taking an important step to improve your physical health, as well.

Written by a retired doctor who now invests in real estate, this guidebook

introduces you to a PowerSpending system that will change your life;
helps you create an action plan that leads to financial success;
provides tips on building a healthy overall lifestyle;
reshapes your view of money so you can make it work for you.

Learning how to live a healthy life doesnt start and end with a trip to the doctors office. It doesnt come with a big payday either, but building wealth and financial security makes it easier to enjoy a healthy and successful future. Learn proven principles to achieve your dreams with Spend, Dont Save.

• Language: English
• Publisher: Trafford Publishing
• Release date: Apr 20, 2011
• ISBN: 9781426964961

Frederick W. James

Frederick W. James, MD, retired from a successful career in academic medicine. An active real estate investor, he has developed commercial and residential properties as well as innovative medical and financial software. He lives in Long Beach, California.

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© Copyright 2011 PENTIME PUBLISHING LLC.

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the written prior permission of the author.

Printed in the United States of America.

isbn: 978-1-4269-6494-7 (sc)

isbn: 978-1-4269-6495-4 (hc)

isbn: 978-1-4269-6496-1 (e)

Library of Congress Control Number: 2011905867

Trafford rev. 05/18/2011

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North America & International

toll-free: 1 888 232 4444 (USA & Canada)

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Contents

Introduction

Your Financial Health and PowerSpending

The Four Pillars of PowerSpending

CHAPTER ONE

Behaviors and PowerSpending:

The Science of Habit Transformation

You: the One in the Driver’s Seat

Thought: Your Navigation System

Thought and Counter Thought

Emotions: the Fuel for Your Engine

Behaviors: Your Maneuvers

through the Territory

Conclusion of Habit Formation

Walk away Points

CHAPTER TWO

The Process of Success:

Creating a Plan of Action

1 - Goal Setting: Defining Your Success

2 - Opportunity Recognition:

Creating Your Own Luck

3 - Information Gathering:

Filling Up Your Toolbox

4 - Preparation:

Positioning Yourself for Success

5 - Taking Action:

Joining Courage with Preparation

6 - Outcome Assessment:

Intelligent Course Correction

Summary: Putting Your Plan Together

CHAPTER THREE

Building a Healthy Lifestyle: The First Priority of Financial Success

1 - Goal Setting: Greater Health Equity

2 - Opportunity Recognition: Awareness of Unnatural Causes of Poor Health

3 - Information Gathering:

Filling Up Your Toolbox

4 - Preparation:

Positioning Yourself for Success

5 - Taking Action:

Joining Courage with Preparation

6 - Outcome Assessments:

Intelligent Course Correction

Chapter Summary: Time to Get Busy

CHAPTER FOUR

Knowing and Living Your Dreams:

The Driving Force of Achievement

Step 1 - Goal Setting: Defining Your Dream

Step 2 - Opportunity Recognition:

Creating Your Own Luck

Step 3 - Information Gathering:

Filling Up Your Toolbox

Step 4 - Preparation:

Positioning Yourself for Success

Step 5 - Taking Action:

Joining Courage with Preparation

Step 6 - Outcome Assessment:

Intelligent Course Correction

Summary of Six Steps

for Achieving Your Dream

CHAPTER FIVE

Reshaping Your View of Money:

The Foundation of Financial Success

Money and Spending: A Look in the Mirror

The Value of Your Time: Time is Money…

and Then Some

Money and Morality:

Being Selfish and Greedy

Money and Education: The Value of Education vs. The Price of Ignorance

Employee Thinking vs. Employer Thinking

Summary of Developing

an Empowering View of Money

CHAPTER SIX

Investment Literacy:

Knowledge of Options Equals Power

Weathering the Seasons of the Economy: End Goal vs. Visible Results

New Cash Generation:

The Fuel that Keeps Your Engine Running

Primary Markets and Secondary Markets

Individual Stocks through

the Secondary Market

Mutual Funds

Real Estate: My Personal Favorite

Derivatives

Bonds, Credit Default Swaps and Collateral Mortgage Obligations

Credit Default Swaps

Collateral Mortgage Obligations

Protecting Your Wealth

The Role of Insurance

Keeping the IRS at Bay:

The Traditional IRA and Roth IRA

CHAPTER SEVEN

PowerSpending Your Money

PowerSpending Your Time

PowerSpending Your Energy

The Four Bucket

PowerSpending Action Plan

CHAPTER EIGHT

Bring Chaos to Order:

Smart Financial Record Keeping

Equipment You’ll Need

Your Master Document

Additional Guidelines for Managing Your Financial Documents

Your Plan of Action:

How to Get Started Now

One More Consideration: Outsourcing Your Organization

CHAPTER NINE

Cultivating Resourcefulness:

How to Seek Expertise and Self-Education

Defeating the Devil of Distraction

Learning and the Role of the Senses

Separating Research Time

from Education Time

Consulting Medical Experts

Consulting CPA

Consulting Financial Advisors

Consulting Legal Advisors

Consulting the Higher Power

Consulting Experience

CHAPTER TEN

Wise Use of Credit:

How to be the Master, Not the Servant

How Credit Becomes Your Master

Credit Isn’t Your Friend,

Unless You’re the Lender

Using Credit to Build Your

Character and Add Value to Your Life

Dealing With a Credit Crisis

The Next Step

To my wife Charlotte Jan, my daughters Freda Annette and Anne Elizabeth, and sons Frederick Roberson and Gregory Keith who contributed by their sacrifices, challenges, content and whose support did not waver in the development, writing and completion of

SPEND, DON’T SAVE.

Also to my mother (deceased) who introduced business concepts and finance to us at an early age, my sisters’ unconditional support and wisdom, and the James Family

Those who really desire to attain an independence, have only to set their minds upon it, and adopt the proper means, as they do in regard to any other object which they wish to accomplish, and the thing is easily done. But however easy it may be found to make money, I have no doubt many of my hearers will agree it is the most difficult thing in the world to keep it. P.T. Barnum: The Art of Money Getting

Foreword

It is indeed a pleasure and deep honor to write the foreword for this outstanding work. I have been a Financial Life Planning Coach and Consultant for more 35 years. I have known Dr. Frederick W. James for over 20 years both in the capacity of being one of his advisors and as a beneficiary of his vast knowledge, leading edge thinking and wisdom.

I am a firm believer in principles. In this book, Dr. James has captured some universal principles of human behavior and provided a road map for how these principles govern the results of our actions. As a Financial Advisor and Life Coach I have come to understand the importance of human emotions in helping people to get in touch with their innermost selves and being a source of internal strength.

Dr. James shows us that it takes more than information for a person to have the knowledge to get solid results. The psychological and mental blocks that impede health and financial well-being can only be overcome with strong emotional commitment to developing healthy cash flows vs. an emphasis on savings.

This is not a book to be read simply for the information, but instead it should be used as a handbook or manual for the person who desires an understanding of the impact of your beliefs, thoughts, emotions, and actions are having on the circumstances of your life and how you can begin to have more control.

For the past ten years our firm has been working with clients and employees on a program of Wholeness, Wellness and Well-being. I can truly say that Spend, Don’t Save–How to Improve Your Financial and Physical Health by PowerSpending is the only book, that I have found, that captures these principles in a single source.

I view this material as a compendium of some of the most important principles developed by man-kind, and organized in a format that integrates the spiritual, physical, intellectual and emotional nature of human beings into physical and financial health strategies to help people experience a life of significance.

John E. Harris Jr. CFP, Managing Director and Life Coach of Life Plan Partners, resides in Cincinnati, Ohio and Virginia Beach, Virginia.

Preface

Some may presume that this is just another self-help book saying the same thing about the power within and all you need to do is set a goal, take action and execute discipline. These advices are included in this book, but are undergirded by a theme of how you spend your resources of money, time and energy that add value to your life and not be controlled by the dreams and aspirations of others.

The seed of the title of this book was planted while viewing a television program in 2007 during the beginning of the melt down in our economy. The program consisted of a panel of experts, a financial planner, businessman, real estate investor, and portfolio investment adviser, giving advice and suggesting strategies to the audience on how to conduct their financial affairs and prepare for what is to come.

Obviously their opinions were of great value, but the overwhelming recommendation from two of the panel members was that each person must save, save, and save more. Suddenly, one of the women in the audience stood and said with great emotions, But I like spending, and immediately, one panel member responded and said, And so do I.

Taking the opportunity to think about the reaction of both the audience and panel member… it became clear for instance that parked dollars may be called savings, but the act of parking or saving is actually an act of spending.

For example, when you open a bank savings account, you are purchasing a bank product or service which provides storage, agreed access to your money, security, and a competitive interest for a bank savings account on your deposited funds. Further, the deposited funds are really there for future purchases which now become deferred spending. Most of the time you use the savings account as a nest egg, or a help to overcome the next perceived crisis. At the same time, you often neglect to check and investigate if you’re receiving the best return for the bucks deposited, or search for other available alternatives that may yield a better return.

So, the term PowerSpending which is the spending of your resources, whether money, time, or energy, according to your preset goal(s), and the book titled Spend, Don’t Save became a reality.

You will read how theoretical models of behavior and habit transformation, and predictable success of good fortune apply in everyday life. You’ll learn how many are already using these models, but are unaware of the theoretical construct. I have pulled from authors, professionals and my experience with patients and clients to establish the framework and to write this book. It is my sincere belief that following the guidelines and principles in this book insures a high degree of predictable success as compared to waiting to receive good fortune by luck alone.

The progression by chapters is arranged for continuity of thought, application and to give a step by step approach to ultimately taking control of your resources. So that, you can be set free to live a life that is both physically and financially healthy.

I encourage you to read the book completely and then take a break, but not too long. Let’s say about a week and then return to study and apply each chapter. Principles do remain the same, but the application and outcome of the applied principle may differ for each person; therefore, the ultimate goal is to empower you to develop and acquire control over your life, and to live your life with purpose and confidence.

Acknowledgments

Having this book now to read is a consequence of many people working and contributing their valuable time, energy, and experiences to convert an idea into reality, share information that can change your life, and assure a sense of physical and financial well-being.

I thank all who helped from the idea stage to the framing of the presentation, gathering of data, inputting of content, writing, illustrations, and preparation for publication.

Some names bear mentioning because of their special contribution to organization, writing, continuity, and attention to clarity. They include Charlotte J.R. James ED.D., and Seth Czerepak Vice President of VQ Success LLC. Illustrations made by Drew Hartel President of DrewDesigns.

The shared goal of all involved is to give facts and information, and introduce the application of known theoretical models to empower willing persons to take control and claim ownership of their lives and have better physical and financial health with freedom.

Introduction

Your Financial Health and PowerSpending

Many things in life are more important than money. Just about all of them cost money. If you want more of these things in your life than you have right now, this book is for you.

Since you’re reading this, it’s safe to assume that you’re looking for a way to build more financial security. You might even be looking for a way to build wealth and prosperity. The good news is that there has never been a better time for you to make this happen than the time you’re now living in.

You might remember in 1971 when President Richard Nixon decided that printed money was no longer going to represent the physical commodity of gold. Instead, printed money would represent the commitment of the American government to support the value of the dollar.

For many people, this marked the beginning of the end for our economy…and it did, for the old economy. This, in conjunction with the power the Federal Reserve had to print money for bailing our banks out of financial trouble, has caused the currency of money to evolve into an idea.

Nearly a century ago, Napoleon Hill wrote his groundbreaking book Think and Grow Rich, based on the principle that ideas could be converted into cash. Today, money itself has been converted into an idea: a free floating currency, unhinged from its bondage to the commodity of gold and free to evolve into something of far greater value.

This is the foundation of the new economy, and those who learn and apply the proper principles of financial education will have one of the greatest opportunities in history to become financially secure and to build wealth. The purpose of this book is to provide you with the tools which will make this possible.

This will be accomplished through the application of the two key principles for financial success in the new economy…

Principle 1- Financial Health: Spend, Don’t Save contains practical strategies and educational principles for improving the condition of both your financial and physical health. You might wonder what place advice on healthy living has in a book about financial success. The truth is that you cannot separate the two. Each affects the other at such a profound level that attempting to address one from the other is almost impossible.

If you have poor physical health, you’ll end up crippled by health problems in your later years. Some of these problems may be severe, others more subtle. For instance, fatigue is a health problem which comes from a worn out metabolism due to poor eating habits, and lack of muscle tone due to lack of physical activity.

Fatigue makes it difficult to focus and to be productive, which can have a direct effect on your ability to add value to your organization as an employee or an entrepreneur. On the more severe end of the spectrum, poor physical health can lead to diabetes, heart disease, stroke, dementia and a variety of other health problems.

Considering the compounding problems with Medicare, the rising cost of health care, and the fact that medical bills are the leading cause of personal bankruptcy, it’s easy to imagine the impact that severe health conditions can have on your financial security.

On the other hand, if you have poor financial health, you’ll be crippled by a lack of money. You’ll likely suffer from anxiety and stress, due to feelings of insecurity that come from having your life controlled by money problems. This stress and anxiety will overflow into your relationships with others: the people you depend on to help make your life more enjoyable and meaningful.

As this stress and anxiety spreads, it begins to impact your emotional well-being. Medical research reveals that this kind of stress weakens the immune system, causes the metabolism to be unbalanced, promotes unhealthy fat storage, and even encourages the growth and proliferation of cancer cells.

As you can imagine, this downward spiral of physical and financial disease detracts from the quality of your life and can even bring it to an untimely end.

But the cultivation of sound physical and financial health will have an equally impressive impact on the quality of your life. Not only will you live longer, you’ll enjoy a greater abundance of energy and vitality from the time you get up in the morning until the time you go to bed. You’ll be less likely to be overwhelmed by health problems and medical bills, both now and later in life.

You’ll be more focused and productive in everything you do, which will increase your value at home and in the marketplace. It will empower you to pursue your dreams and hobbies and to enjoy extracurricular activities with your children and their children.

You’ll have the money to purchase the things you need to be happy and healthy: natural and healthy foods, comfortable clothes, attractive and dependable vehicles, a safe and well furnished home, a good education, and vacations to the most interesting and exciting places in the world.

All of this will have an invigorating impact on your emotional well being. Medical research reveals that good emotional health strengthens the immune system, balances the metabolism, promotes healthy cell growth and even helps fight off life-threatening illnesses like cancer.

This harmonizing of physical and financial well-being is the primary focus of cultivating good financial health. This is accomplished through the application of the second principle…

Principle 2 – PowerSpending: PowerSpending is the strategy we’ll be using in Spend, Don’t Save to develop the habits of good financial health. Saving money is no longer adequate for the achievement of financial security or the accumulation of wealth. Inflation is making it more and more difficult for anyone to build financial security simply by saving. Instead, cash flow has become the method for cultivating wealth and prosperity in the new economy.

Those who develop a healthy cash flow have all the financial security that they need. Those who don’t will watch their money flow toward someone who has developed a healthy cash flow. PowerSpending encourages positive cash flow by focusing spending on what will add value to your life, instead of to someone else’s.

For example, you spend your time working for a salary or an hourly wage. This spending of hours to earn dollars adds more value to the employer’s life than it does to yours. It also keeps you from earning money fast enough to cover your expenses, invest, pay taxes, and beat inflation so that you can build wealth.

To add to this, most people spend their extra income on things that add value to other people’s lives instead of to their own life. These are depreciating assets such as: three thousand dollar high definition big screen televisions, new cars that lose nearly half their value in the first three years, meals at sit down restaurants, and other things that take money out of the spender’s pocket and put it into the pocket of the vendor.

As if that is not enough, these things are often purchased using credit, a product designed to cause money to flow away from the borrower and toward the lender. Finally, most people who do have money to invest spend it investing in company stocks and helping those companies to become wealthier, instead of investing in starting their own companies.

All of these examples demonstrate cash flow strategies that control the direction in which the money is moving. These strategies are making one group of people wealthy and prosperous, while the other group is supplying the capital that makes the wealth and prosperity possible.

As long as money exists, these types of strategies will exist, and so will people who benefit from them and people who don’t. Cash flow is inevitable. The only thing you can do is make sure it is flowing toward you instead of away from you. PowerSpending is a practical strategy for steering your personal cash flow in a positive direction.

At the same time, the principle of PowerSpending can be used to develop the habits of good physical health. This is accomplished through the development of a healthy energy flow in your body. Your body is a highly organized organic system which is constantly spending energy on two things:

*Construction: The expenditure of energy used to build your physical body: your bones, muscles, organs, and other tissues.

*Function: This is the performance of the activities and functions necessary to keep your body alive and help you enjoy your life.

As you know, poor health is the result of spending your time and energy doing things which don’t promote the construction of a healthy body. It is also the result of eating foods (another kind of energy) which do not promote the construction of a healthy body and which make it more difficult for your body to effectively perform certain functions.

PowerSpending is a practical strategy for developing a healthy energy flow in your body through the cultivation of good eating habits and a proper level of physical activity.

Both the financial and physical dimensions of PowerSpending are based on four key pillars…

The Four Pillars of PowerSpending

As is the case with any behavior-based strategy, the practice of PowerSpending requires the development of habits. In his best-selling book: The Seven Habits of Highly Effective People, Steven Covey describes a habit as the intersection of three things: knowledge, capability and desire.

Knowledge is the education needed in order to develop the habit, capability is the skill required to execute it and desire is the motivation to put those skills into practice. In PowerSpending, we will be using four principles to develop the knowledge, skills and motivation needed to form good habits:

1. Knowing: No action can be taken until you first have the knowledge of what to do. For example, you can’t improve your eating habits without proper knowledge of what foods to eat. You can’t develop multiple streams of income and promote positive cash flow without understanding the difference between liabilities and assets. Therefore, the first pillar of PowerSpending is the acquiring of proper knowledge.

2. Unknowing: Einstein said we cannot solve a problem using the same kind of thinking that was used to create it. Many times, when we acquire new knowledge, it contradicts something which we have been conditioned to believe. So before we can put new knowledge into practice, it’s important to get rid of the beliefs which cause these inner conflicts. Therefore, the second pillar of PowerSpending is the unlearning of our improper knowledge.

3. Skills: You might have heard it said that knowledge is power. However, knowledge is only potential power. It also requires skills in order to put that knowledge into practice. Without skills, knowledge has little value and is difficult to retain for long. Therefore, the third pillar of PowerSpending is the development of tangible skills for the execution of good habits

4. Desire: Knowing what to do and being good at it gives no assurance that you will actually do it. You also have to be motivated by an intense desire to achieve what you want. This requires being emotionally involved in the outcome you hope to achieve through execution of the habit. Therefore, the fourth pillar of PowerSpending is becoming emotionally involved in the achievement of what you want.

A Two Way Commitment

Before we get started, it’s important that we agree to meet halfway. I’ll provide you with what you need to get more of the best things in life through the principles of financial health and PowerSpending. That’s