Erlend Peterson is a financial planner with thirty-two years of taste managing money. He is the author of three books together with "Money Changes Everything" and "The Challenge of Wealth." "Rich by Choice" is specifically geared toward helping the middle-class come to be affluent.
Tyler: Welcome, Erlend. I know the topic of your book is one every reader wants to know about: "How can I make or save more money"? I understand personal experiences made you decide to come to be a financial planner and write these books. Would you tell us a miniature about why you decided to go down that occupation path?
Based On Income Apartments
Erlend: I retired at 40! Wow! Great! gorgeous wife, 6 kids, 3-1/2 acre estate with tennis court and swimming pool. Three years later, I was broke, so I decided to learn how to cope my money and invest.
Interview with Erlend Peterson, Author of "Rich by Choice"Tyler: The first part of your book, "Rich by Choice" is titled "Rich or Poor, It's Your Choice." I am consuming if you would agree that many people have a negative attitude toward money and feel they cannot improve their economic situations. The idea that they choose their own financial situation may seem extraordinary to them. What would you say to such people?
Erlend: Yes, it is possible to come to be rich. any person can.
a. Know that it is possible. All you need is a steady income
b. decide to do it, you want to do it, you need to do it, and you know it can be done.
c. You start. Work out a plan and begin.
d. Effect your plan and watch your results month by month, year after year.
Tyler: Why do you think so many people find themselves with financial difficulties?
Erlend: people find themselves in financial difficulties for three reasons: (1) Personal finance, investing, and money administration are not taught in our schools, not in high schools or college. That's why I wrote my books. (2) In this country anyone can come to be rich, there are no restrictions, so I think a lot of people just assume that they will somehow come to be rich and they start spending as if they already were. (3) The banks and prestige cards give prestige to everybody. A lot of people take advantage of that and spend money they don't have.
Tyler: Do you feel parents and schools need to take more accountability toward teaching children about money? What kinds of suggestions would you have for teaching children about money?
Erlend: Yes, both parents and schools should start teaching children about money. Schools should start teaching classes about personal finance. When parents give their kids an allowance, they should start talking about money. An discount is income. You can only spend money based on what you earn, your income. When the parents file their taxes, they should discuss that with their kids. Discuss cars and auto insurance, and that can lead to discussing other kinds of insurance: Homeowners, life, etc. Discuss their monthly bills occasionally: Water, gas, electric, cable and their fee accounts and prestige cards. Take the kids into their bank and discuss the bank and what it does and what it doesn't do.
Tyler: That's great advice, Erlend. What do you feel sets "Rich by Choice" apart from the many other books about money out there, especially those by such familiar personalities as Suze Orman?
Erlend: Money is a number: 14 cents, .50, ,000, ,000,000.
a. My book has numbers, charts and tables, all the numbers you need to make your situation work.
b. Suze Orman has no numbers; neither do most of the other books that are available.
c. My books have true stories and practical illustrations that show how money works and how it will work for you.
Tyler: I understand your book has a seven-step plan to wealth. Would you tell us what those seven steps are?
The Seven Steps are:
1. Cash reserve
2. Insurance
3. Fixed income savings
4. Growth investments
5. Tax planning
6. Relinquishment planning
7. Estate planning
Tyler: In "Rich by Choice" you talk about how much guarnatee a person needs and which ones are essential. Would you give us a summary of your opinions on insurance?
Erlend: If you own a car in California and other states, you must have auto insurance. If you own a home, get homeowners insurance. Your home is a huge asset and it deserves protection. If you have financial dependents, parents, kids, others, you need life guarnatee to safe their income stream.
Tyler: Are there certain kinds of life guarnatee you wouldn't recommend? Can a person have too much insurance? How much is enough?
Erlend: Not everybody needs life insurance. If no one is dependent on you for their income and financial needs, you don't need life insurance.
In a typical house situation, the working parent or parents should have sufficient life guarnatee to furnish total income for the house for two to five years if they die prematurely. This should be whole life or universal life. Plan to keep these policies for your lifetime. You pay the selected monthly or annually as long as you have the policy, or you can dispose to have the procedure paid up at age 65 or some other age. These policies build cash value inside the procedure as long as you make the payments, and this cash value build-up after 20 or 30 or 40 years can furnish extra income for you in your retirement.
Other base types of life guarnatee are term life and changeable universal life. changeable universal life invests some of your selected payments into varied types of mutual funds, instead of the guaranteed fixed investment in the regular universal life and whole life policies. These mutual fund investments in the changeable life policies can go up or down so there is important risk to the cash value quantum of these policies. The monthly or annual selected or cost of changeable life is much more than universal or whole life.
Term life guarnatee is issued for a specific term of years, commonly 5-10 or 20 years. At the end of the term, the procedure lapses, ends, or you can renew it based on your age then, at a much higher cost. Term life has no cash value build-up and is therefore much cheaper than the other policies.
Because of the great differences in these policies, it would be good to discuss your need for life guarnatee and get quotes from agents at three distinct companies.
Tyler: Thanks, Erlend. You precisely know about life insurance. How about real estate? We hear so much today about the importance of investing in it. How important do you think real estate is to gaining wealth and financial independence, and what would you say is the next best thing to do for people who are not interested in buying and selling properties?
Erlend: Real estate works, but it takes some cash and steady endeavor on your part. You must rent out the property, regain the rent, pay the asset taxes, make repairs, etc. Real estate prices also run in cycles; the prices go up and down. They are high now. If you have the cash, the time and the skill, real estate works.
Mutual funds are much simpler:
a. Pick good funds, with 10-12% annual Growth over the last 3 - 5 -10 years.
b. Make steady investments every paycheck.
c. Watch the results grow.
Tyler: What about U.S. Savings Bonds? Lots of people buy U.S. Savings Bonds commonly straight through their paychecks or they give them as gifts or save them to use for their children's education. Do you feel U.S. Savings Bonds are a good investment?
Erlend: U.S. Savings Bonds are the safest investment in the world. They are backed by the full faith and prestige of the U.S. Treasury. In the Seven Step process, they fit on Step 3, fixed income savings. The qoute with them is they are (1) long term, 20 or 30 years, so you could lose money if you had to cash them in early, and (2) they only pay 4-5-6%. Good long-term investments should pay 8-10-12% or more. You can now buy most investments commonly straight through your bank or payroll.
Tyler: Which do you feel is more important, buying a home and then using your extra money to pay off the mortgage as quickly as possible, or to take that extra money and spend it?
Erlend: Let the mortgage run. It has tax benefits. Put all ready income into tax excellent Relinquishment plans: Ira, 401-K, 403-B, 457, etc. When you are investing the max in them, then make extra mortgage payments.
Tyler: What is the first thing you would recommend a person do to start the journey toward being rich?
Erlend: The first thing each person must do when they realize or decide that they want to be Rich is to stop and gawk their present financial situation and think about their hereafter situation and what they want it to be. This does not have to be done in detail down to the last dollar, but just sufficient to get a sense of where they are going. They need to know that it is precisely possible to get there.
Knowing what you want to do and knowing that it is possible are the first step. Then you do it.
Tyler: Erlend, if people only learned one thing from your book, what do you hope it would be?
Erlend: That they can come to be rich, because any person can, and therefore, that they will start Now.
Tyler: Thanks so much, Erlend. I could precisely think of a hundred more questions to ask you about money, but we'll leave it up to the readers to get more facts by purchasing a copy of your book "Rich by Choice." Will you tell readers where they can get more facts about your book and where to purchase it?
Erlend: And thank you, Tyler. I'll be glad to respond your next hundred questions, ten at a time. I precisely want to help everybody who wants help, to come to be financially regain ... That is, rich.
My books can be found on the Internet at:
petersonmoneybooks-money.com
petersonmoneybooks-riches.com
petersonmoneybooks-wealth.com
And at: Barnes & Noble book stores and Amazon.com
Tyler: Thank you, Erlend. I wish you and all our readers well on the road to prosperity.
Interview with Erlend Peterson, Author of "Rich by Choice"Another Amazing View!! Video Clips. Duration : 6.13 Mins.The apartments I lived in right before my new apartments was sitting on a summit and it had an amazing view of the neighboring city called Benbrook and it was an incredible view and when its nice outside it's great to just take a little time and admire it!
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Local ProgramsCounty and city governments fund programs that help senior citizens to repair and maintain their homes. Camden County, for example, offers the Senior Safe Home Program, which provides installation of ramps, hand rails and grab rails, repairs concrete sidewalks, porches and steps and offers other minor repairs to windows, doors and plumbing. Applicants must meet income requirements and have a verified disability. The city of Linden awards grants of as much as $5,000 to senior citizens with limited incomes. Qualifying repairs include replacing inefficient furnaces, outdated plumbing and electric wiring or installing new windows and doors. Applicants must own their homes, not be delinquent in their property tax and mortgage payments and meet income guidelines.Federal AidFederal agencies make home improvement funds available directly to consumers or as grants to state and local agencies. The U.S. Department of Agriculture (USDA) Rural Development Program offers grants to homeowners in rural areas for repairs and improvements. To apply, your home must be in an area designated as rural by the USDA, you must be at least 62 years old and your income must be too low to qualify for a USDA loan or to enable you to repay the amount of a grant. The U.S. Department of Energy funds weatherization aid through local government and social service agencies such as community action programs. Aimed at low-income households, weatherization can include a number of alterations to your home, such as installing blown-in insulation and upgrading inefficient heating systems.State AssistanceThe state of New Jersey administers age-related funding for home maintenance through the Department of Health and Senior Services. The Safe Housing and Transportation Program, under the auspices of the Area Agency on Aging, provides home repairs and improvements primarily intended to eliminate health and safety hazards in the homes of the elderly. Priority is given to seniors age 75 and over who live alone and who are limited by disabilities or health conditions.Private OrganizationsVolunteer organizations such as "Tooling Around" in Woodbridge Township offer free home repairs to the elderly and disabled in their area. Volunteers provide needed services such as yard work, painting, caulking and general fix-ups. Local businesses donate money and supplies and recruit employees to volunteer. Chore Service in Bergen County uses volunteers to make small home repairs for residents who are at least 60 years old or disabled. Volunteers perform chores such as fixing leaky faucets, installing new electrical outlets or light switches, changing filters and batteries in household appliances, putting up and taking down storm windows and screens and installing safety devices such as smoke alarms and grab rails.
Maine Housing-Maine State Housing Authority353 Water St.Augusta, ME 04330207-624-5745mainehousing.orgFederal Government ProgramsGovernment programs that work with the Rural Housing Repair and Rehabilitation will provide loans through the U.S. Department of Agriculture to very low-income residents. Home owners may use these loans to remove health and safety hazards, modernize the home, or make repairs or improvements. Loan terms will go up to 20 years at 1 percent interest, and loan amounts go as high as $20,000. To be eligible for these loans, income must be no higher than 50 percent of the median income for that region and the owner must have been unable to get approved for affordable credit anywhere else. A decision by the Rural Development office will be completed in 30 to 60 days.Rural Housing Repair and Rehabilitation1400 Independence Ave. SWWashington, DC 20250-0107202-720-4581rurdev.usda.govOregon -- Health and Human ServicesEligible low-income residents living in Washington County in the state of Oregon may qualify for low-interest loans or free repairs run through nonprofit programs. The Housing Rehabilitation Program has low interest and deferred interest loans and grants to make home repairs and improvements for such areas as plumbing, roofing, electrical and heating. Renters may also qualify, but repairs are limited to accessibility improvements only. Additionally the Washington County Disability, Aging & Veteran Services will help low-income residents who are 60 years or older with no-cost minor modifications and home repairs. Rebuilding Together will also assist low-income residents with free home repairs that focus on heating, safety and independence. The disabled, elderly and families with children will receive priority for this program.Washington County, Oregon -- Health and Human Services328 W. Main, Ste. 100Hillsboro, OR 97123
Grants for first-time home buyers are one of the few purposes for which governments issue checks to individuals and families. The major benefit of a housing grant is the money is yours to keep. Proof of compliance and careful record keeping are part of grant procedures that must be followed. Some grants are issued ahead of the need; others are designed to reimburse expenses.Federal First-Time Home buyer Grants for ArizonaThe U.S. Department of Housing and Urban Development (HUD) helps put first-time homebuyers into foreclosed properties, supplement their down payments and offset their closing costs. Through the HUD's HOME funding program, grant awards focus on helping stabilize challenged areas. Many times, the grants are used to finance nonprofit housing corporation developments made available to first-time home buyers. HUD grants are given in program-funding "blocks" to cities and counties. The awards are made locally.Arizona Housing GrantsThe Save My Home AZ program awards grants up to $15,000 to first-time home buyers buying a foreclosed home as their primary residence. This money is directed toward areas with large numbers of foreclosures to help stabilize those neighborhoods.Housing AdvocatesConnecting homebuyers with housing advocates, the Arizona Housing Counseling Collaborative does not award grants but knows where first-time home buyer grants can be found. The advocates determine applicant eligibility and ensure complete applications are submitted. Housing advocates act as homeowners' agents during the sometimes complex grant application process.State Budget IssuesArizona enters 2011 with a serious budget deficit. Many state funding programs are being eliminated or the funding reduced. It's important to verify any changes in grant programs that may be affected by the state's budget every year.
The American Dream Down Payment Act was signed on December 16, 2003 by President George W. Bush. This new program is a joint venture of the American government and the banks to provide grants to the home buyers of the low-income group. According to this Act, grant would be issued to an individual to meet the down payment and closing expenses of a home loan.To be eligible for this grant, you should be a first-time home buyer and your annual income should not exceed 80% of the area median income.As per this act, the maximum amount granted will be six percent of the purchase value of the house or $10,000. The grant amount can be used as the down payment and to meet all the transaction expenses associated with home buying.This grant program would be handled and overseen by the US Department of Housing and Urban Development (HUD). The aim of this Act is to encourage people belonging to low income group to invest in a home.A professional appointed by HUD would assist the home buyer in the purchase of the house. Even if you have a bad credit history or an inadequate credit score, you are eligible for this loan if you are a first-time home buyer. The home buying grant is also called "free money" because you do not have to pay any interest and monthly installment on this amount.Down Payment Gift Assistance ProgramThere are many who dream of buying a house but are not able to do so because of lack of funds to put down as a down payment and also to meet the closing expenses of the house deal. This problem can be resolved by applying for a down payment gift assistance program.In this type of grant, the seller does not give the down payment funds to the buyer. The home seller will help the buyer in paying the closing costs of the house deal. This amount depends largely on the type of loan issued to the buyer.If a seller wants to provide gift assistance, he has to enroll his house in a concerned government program. At the time of closing the deal, he contributes the stipulated amount to the buyer as the closing and transaction fees. This deal is negotiated by a financial organization which is associated with HUD. The buyer should always approach a bank or a financial institution that is listed with HUD to avail the grant. When the deal is closed, the funds for the down payment are transferred to the account of the concerned financial organization. You need to understand, the seller has no part in the transfer of funds from the Gift Assistance Program to the bank.Anyone who belongs to a low-income group is eligible for this program. However, he should qualify for a home loan that allows gift assistance.If the buyer has not used the entire fund, it is returned to the gift assistance program. The gift assistance grant cannot be used to refinance a home or to make home improvements.Before you apply for the grants, ensure that the grants are supported by HUD.
The California Homebuyer's Downpayment Assistance Program (CHDAP) offers loans to cover the down payment or closing costs for first-time homebuyers. The loan finances up to 3 percent of the purchase price or the appraisal value of the home, whichever is less. This loan may be combined with a California Housing Finance Agency (CalHFA) or a non-CalHFA first mortgage loan. The borrower has to contribute at least 3 percent of the sale price and has to undergo homebuyer education counseling. The American Dream Down Payment Act gives grants to local cities throughout California so that these types of loans can be given to low- and middle-income families.Affordable Housing Partnership ProgramThe Affordable Housing Partnership Program (AHPP) provides mortgages to people who fit within the low-income bracket. The income limits are based on family size and the county in which the house is located. The home must be a single-family residence. The loan is only applicable for homes that will be owner-occupied. This program cannot be used for rental or investment properties. AHPP lists the income and sale price limits set by each county to help a homebuyer determine if they will be eligible.CalHFA Community Stabilization Home Loan ProgramThis loan program offers a 30-year mortgage with a fixed low interest rate for bank-owned properties. One hundred percent financing is available through this program. A homebuyer can be eligible for this loan and also receive financial assistance through a down payment program that will cover the closing costs, such as CHDAP. The property must be occupied by the owner. The borrower is required to complete homebuyer education counseling. A person who is not a first-time homebuyer can qualify for this loan if they purchase a home in a federally designated low-income neighborhood.Cal30 Conventional Loan ProgramThe Cal30 Conventional Loan Program offers a fixed interest rate, 30-year mortgage. The loan cannot exceed 95 percent of the appraised value for the property. A borrower who qualifies for this loan also can receive a down payment assistance loan that will cover closing costs. If a borrower uses a loan to cover the closing costs, she will be required to contribute 3 percent of the sale price or appraisal value for the property, whichever is less, from her own funds. If the Cal30 loan is greater than 80 percent of the property value, the borrower also will have to purchase private mortgage insurance. CalHFA lists the full eligibility requirements for all of their loans.
