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dan pecaut

Daniel Pecaut, Pecaut & Co.'s president and CEO, provides accessible financial advice in "Saving, Spending, Investing, Giving," a book that provides insight into how money can be used in creating the world that you want. 

SIOUX CITY --  As a Zen priest in the Hollow Bones/Mondo Zen Order, Daniel Pecaut always has time to do qigong (gentle movement while breathing) as well as relaxing daily meditation.

After graduating from Harvard University, he has spent nearly 40 years at Pecaut & Co., the Sioux City-based investment advisory firm founded by his grandfather, father and uncle nearly 60 years ago.

Is there a Zen approach to investing your money? According to Pecaut, author of the book, "Saving, Spending, Investing, Giving: A Veteran Investment Adviser Reflects on Money," the answer might surprise you.

"People often get too emotionally wrapped up in their money," he explained. "Money is just a tool in the same way that a hammer is a tool. I tell people to drop all emotional baggage we have attached to money. It's simply a tool."

All right, if money's simply a tool, what do we use it for? Pecaut said we can save it, spend it, invest it or give it away.

We're guessing that most people have problems with the saving part, right?

"Saving requires a future and it is empowering," Pecaut said. "I'd describe saving as delayed spending and giving. It buys you time to make clear, conscious choices about what the best use of those funds are for spending, giving and investing."

In other words, it allows you to keep your options open while you compound what you've saved.

Eventually, you'll need to do a bit of spending. Whether it is for buying groceries or purchasing a house, Pecaut has some solid advice.

"Spend less than you make," he said. "Most people spend not only what they make, but they also borrow so they can spend even more."

For instance, a house can appreciate in value. All of the goods you have inside your house will depreciate over time.

How do you keep your spending in check? Make and, more important, follow a monthly plan. After all, a budget is meant to help you identify priorities.

"My advice is to spend 80 percent of what you make," Pecaut explained. "Put aside 10 percent for giving and 10 percent for saving and investing." 

So, what happens when your water heater goes on the fritz?

"Emergencies are a part of life," Pecaut said, "so everyone should have a plan to handle them."

As a rule if thumb, he recommends having six months of living expenses in the bank.

"If your monthly expenses are $2,000, having $12,000 in savings is a good idea."

Once you're debt-free and saving every month, you can now makes long-term plans.

"We're wired for instant gratification and doing what feels good now," Pecaut said. "Investing means taking a portion of your savings for goals that are several years or more away." 

While a person can play the stock market, investing also means setting aside money into a an IRA or a 401(k) program.

A person can easily understand the concept of spending. Investing is simply a subset of spending. 

What about giving? 

"Giving is less understood because it requires a larger world view," he said. "The act of giving develops one's capacity for compassion and empathy."

"You need to become a social entrepreneur with a vision that is greater than yourself."

Once a person has mastered the tool of money, he can see the potential ripple effects it can have.

Sitting inside a conference room of his downtown office, Pecaut is reminded of Mary Oliver's "The Summer Day," which is one of his favorite poems.

"Tell me, what else should I have done? Tell me, what is it your plan to do with your one wild and precious life?"

"We all have one wild and precious life," Pecaut said. "We must all decided how we want to live our lives." 

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