VIEWS: 4 PAGES: 6 POSTED ON: 7/10/2012
iafrica.com | mymoney | debt management The rich are in trouble Page 1 of 6 News Business Sport Motoring Entertainment LifeStyle Cooltech Travel Food Health Person Ask The Experts Banking Debt Management Financial Fitness Home Finance Insurance Investments Ret Last Updated: 07:00am 26 Nov 2008 SEARCH v The rich are in trouble Wed, 26 Nov 2008 06:59 ... the website The rich are the most indebted and banks are for... reporting a 50 percent increase in bad debt as South Africans now owe R1139-billion and R8.20 of every R10 a South African earns goes to pay off debt. WEATHER The latest figures from the Bureau of Market Ctn | Dbn | Jhb | Other Research (BMR) at Unisa shows that more can't pay and are sliding down a steep slope into financial despair. Liza van Wyk of executive management 16° 31° » More skills training group, AstroTech says, "we are seeing enrolments in our financial courses rise and more executives asking not just how their companies can INDICATORS cope, but how they can manage their way out of serious debt." Related Articles $ = R 9.97 » Does 'good' debt exist? £ = R 15.31 The Unisa research shows that the income group » Free yourself from debt € = R 12.92 with the biggest debt burden earns between » One easy step out of debt Oil = $ 49.23 R500 000 and R750 000 a year. Their debt represents more than 135 percent of their disposable » Borrow money to get out of debt? Gold = $ 817.8 income and they use 34 percent of their disposable Last update: income to pay back debt. 26 Nov 2008 16:56:03 Their woes have seen the property market and car Latest News Talked About Edito SPONSORED LINKS » sales collapse with more than 4000 jobs lost as more than 200 car-dealerships have closed, according to » Tiger expects growth Casino Online – get McCarthy. Ford will start lay-offs soon. » The rich are in trouble R300 free! » Ask the experts Property Search Economy to remain flat for at least a year » Urgent rate cut needed » Gold stocks rock Cars Online Nonetheless, major banks like Investec have said » Credit card fraud jumps Insurance For they see global economies beginning to lift in mid- » ZSE resists crisis Women 2009 although economic conditions in South Africa » Take the plunge? Free Insurance Quote are likely to remain flat for at least a year. » Road accident fund reform » Loans for votes? Life Insurance "Our Finance for Non-Financial Managers course is consistently jam-packed, we're seeing high interest Flights Online in our early February course on Corporate Budgeting Compare quotes. as well as our Risk Management and Strategic Insure. Management courses," Van Wyk said. "Our skills Flight Centre Specials trainers are reporting the most attentive delegates yet in financial courses, with many afterward asking Car Rental Online for personal guidance — and these are the cream of South African business, government and p Online Dating Wayne Ford, AstroTech's top financial management trainer and a highly-respected managemen giving his overview of the present situation said a low Rand against most major currencies wou Audio, TV, GPS & PS3 etc necessarily help the economy. "Not every company will be able to compete in the export mark that cannot compete and survive unless domestic consumption expands is not going to be able the much more aggressive export market." Ford said the biggest challenge facing South Africans and global financial markets was pervasiv GET IN TOUCH » "We keep interest rates high partly to reduce credit spending and thus domestic inflation and p the exchange rate and reduce imported inflation from things like oil and foodstuffs. High inflati to the poor, who have no spare disposable income, no savings and minimal flexibility to increa http://personalfinance.iafrica.com/debtmanagement/1329100.htm 11/26/2008 iafrica.com | mymoney | debt management The rich are in trouble Page 2 of 6 — other than to strike for higher wages. Fighting inflation is one of the best ways to help the poor. "And when banks won't lend to them any further, those in financial trouble go to loan sharks and incur extortionate interest charges. 'Incentivising' everyone to cut debt is critical. Got something to say? Click here to send a mail "The American plan to cut rates in order to fuel to Personal Finance and credit spending was fine in the very short term, but Property editor Kabous it was poorly judged credit spending that caused le Roux. their problem in the first place. You don't have to be a genius to realise that the credit boost they are creating now (which is being funded by increasing the federal debt) will lead people into further debt, which will have to be paid for in the future by families who can't afford their existing levels of debt now. This is like treating gangrene with morphine — although it has stopped hurting it is still there, it is getting worse and if left untreated for much longer it will certainly kill you." Challenges for labour and land redistribution Ford said that, "Creating jobs is very important, but those jobs must be sustainable. If we crea allowing customers to buy on credit then those jobs will disappear as soon as the next level of reached. Also, if jobs are created by allowing families to get into debt, then the cost of prosper exceed the prosperity itself and the whole cycle will continue to spiral negatively. These negati entire economies — the USA is close to the edge right now and many developing nations have slipped over the edge. "Allowing the exchange rate to drop helps exports but has the parallel (and much faster) effect imported oil prices." Ford said that, "We need to increase exports by reducing manufacturing c improving productivity vs. wages. It would help if we could break our dependence on imported we could then happily devalue the currency. This requires a massive focus on green energy sources and better support for efficient corpora opposed to land redistribution to subsistence farmers who can barely feed their own families, f towns. The example of Zimbabwe is very relevant here. "A growing economy needs citizens to banks cash-flush, which eases the cost of borrowing and makes capital available more cheaply A short term solution for families in trouble The short term solution for individual families is the following: Stop spending. Use all available cash to pay off debt. Stop spending. Use less fuel — switch to public transport where practical. Stop spending. Grow some of your own food in the back yard. Stop spending. Trade in your car for the cheapest car you can find. Stop spending. Get solar heating installed as soon as you can afford it and meanwhile save power with bulbs. Stop spending. http://personalfinance.iafrica.com/debtmanagement/1329100.htm 11/26/2008 iafrica.com | mymoney | debt management The rich are in trouble Page 3 of 6 Get a second job. Stop spending. USER COMMENTS » the rich? how can a person in debt be called rich,i drive a bashed up old golf,but i dont owe nobody anything,that makes me rich.I dont need to stress about earning more and having sleepless nights about it.I dont compete with the Joneses.That makes me rich.. frikkie botes Nice feeling hey Frikkie . ddc well done frikkie. you must be very proud.. G proud proud you can be indeed, Frikkie. only stupid people borrow money and pay interest. feels so good to have no debts.(where every Rand actually costs you 1.20)long live that good old fashioned calvinistic thinking :-). edward Are you kidding me. This was obviously written by a person who thinks that going back to the 3rd world is the best way to make/save money. - "Grow you own food in the back garden?" And it is said, use public transport and then the righter says trade in your car for the "Cheapest" one you can find. Ever heard of penny wise pound foolish? If you get the cheapest car you can find it will break down and cost you more than a good maintained car. (Oh and if you dont maintain the car, wonder what the resell value is?) Growing food in your back yard, you need a Back yard. And then, the cost of upkeep is more then it will be to buy food. Understand me correctly, but at a fresh fruit market instead of Woolies. But Grow your own food. COME ON! So before we are pushed back into the darkness if the 16th centaury, use your money correctly. Plan forward and make informed decisions. And for Pete sake, don’t do things you don’t know how - Like gown your own food. Oh and obviously, stop spending, like creating a food garden is not spending. . CJ Great idea I do have a garden and I think growing some of your own food is a great idea. . Dr Greenthumb High interest rates My biggest question is, if the government is trying to stop new debt by increasing interest rates to discourage new loans, why not just apply higher interest rates to new loans and not penalize old loans? I have a 5-year-old bond that I could manage to pay without a problem, but after the many interest rate hikes I now have to borrow from my access bond because of the R2500.00 / month more it cost me on bond repayments. So, from been part of the solution I have become part of the problem, and no fault of mine. It just does not make sense why people who have been paying off their house and car for many years now have to suffer because of the need to curb new debt. Those who are financially responsible should be rewarded and those who are financially reckless should be penalized.. George do not spend A good mind only needs half a word to understand a concept ; 'CJ' obviously has no such facility & cannot even spell or construct a decent sentence ! . GB What about budgeting I am surprised that there was no mention of budgeting in the short term solutions. How will you know if you are in trouble if you don't have a budget? http://personalfinance.iafrica.com/debtmanagement/1329100.htm 11/26/2008 iafrica.com | mymoney | debt management The rich are in trouble Page 4 of 6 Madia Thomas, www.onlinebudget.co.za. Thomas Stop spending! Simple. I love how this article repeats the words 'Stop spending'. It really is as simple as that.. Richy Rich Only one way There is only one way to get out of debt problems - just don't make any debts! Easy. And STOP SPENDING! ;-D. Brakkie solutions has the writer of the article priced solar heating lately? ya well no fine.. cheryl Yeah Grow Your Own! #. Ian Finch The rich are in trouble I am not happy with the advise that your writer is giving and I find it very much the OLD stuff!! By downgrading your car is the worst cash flow option!! By trading in your origional car for a cheeper car is throwing away R 10 000 to R20 000 immediately!! Then you have to put a deposit down and start paying off on a new lease...AND then your fuel saving is R1 or so per klm!! Please this does not work and can only work if you are doing long term planning! Also, by installing a solar heating system will cost R30 000 to R 60 000 up front and you only see your saving after 3 to 4 years!! Both options are cash out right now..and will put us all very much deeper into debt...and will not help anyone right now!! . David Hartley CJ??? I dont think CJ got the message.. pala how stupid ! oh what a joke of an article.. cant belief that allow this rubbish here. We must catch public transport and grow veg in our back yard lololol. The wealthy are wealthy because we take advantage of opportunity.. if that means we need to borrow in order to turn profit we do so..and yes i drive the bmws and have nice properties and things are tighter that usual.. but when this economic mess blows over.. the "poor dads" of the world will still be debt free and have nothing !! what a joke. Paul S David is misguided David,downgrading your car is an EXCELLENT option, probably the best thing you can do! What are you on about 'put down a deposit for a new lease'? The idea is to get rid of debt. Sell your car for as much as you can and buy a second hand one CASH! (If you could only get R30 000 for your car then you only buy one worth R30 000 and not a cent more) You obviously don't get it and is addicted to spending like the 'rich' this article refers to. Solar heating DOES save money. If you have the money, do it! Three/four years and you have all your cash back! David Hartley, ru in trouble? I wouldn't be surprised.. Matt Duval Paul is spewing rubbish To Paul, what the hell is wrong with using public transport? It will save tons of money not to mention spare the environment! Even if you don't have money trouble it's a good idea. The wealthy are in trouble because they borrow (not only to turn a profit, that wouldn't have been a problem) to consume and keep up with the Jones's. You might be doing OK, but the rich are losing their BMW's and nice properties at http://personalfinance.iafrica.com/debtmanagement/1329100.htm 11/26/2008 iafrica.com | mymoney | debt management The rich are in trouble Page 5 of 6 an unprecedented rate. You're NOT rich if you struggle to make ends meet, whether you own a Beemer or not. Paul, you're spewing rubbish. . Karien Meintjies Well Off How do you judge when you are well off? Its all relative. I was one of those in the 500000 per year bracket until 4 months ago. ( I was only in it from Jan 2008) before that a good+-360000 supporting a wife and 2 kids, I made a decision to jump off the band wagon, why ? life is too short to have to worry about who gets paid when,,what car can I buy, lets eat out tonight etc etc I wanted a stress free life with enough to eat ,a car to get me from A toB and a roof over my head. I was fortuneate I had bought over the years a couple of properties which I sold off ,sold my exec car and 4x4, bought a 1.3 runabout , Bought a caravan and had a Custom tent made . We bought a small house with Granny flat and now My eldest son and his wife live in the main house ,pay me rent and I have the granny flat to go to when I need a night in Town, or am not well. I now live beside a river in the East Cape, with a magnificent life style and everything is paid for. No more worries, Life is great To recap:Get rid of debt, choose a simple life style,don’t keep up with the Jones and yes grow your own veggies its fun . PB eish is rich how about diverting politicians' salaries into a national cabbage patch and making their teams of bodyguards do the weeding? Then give the 33 Mercs in their calavcades to the poor and replacing them with skateboards, and finally set the politicians themselves to productive work by making them polish the insides of sewers. They always have been full of s##t anyway. Viva making politicians help us out of debt viva!. the dude I love spending and saving...... Basically im 29 years old and i have 2 jobs : Travel agent by day during the week and house DJ on the weekends....NICE salary of R10000 afta TAX..Im a bachelor living in a nice area in cape town,,paying R4000 rent plus another R4000 for essentials like food and petrol and still saving R2000 a month that goes in the bank...I have woman every weekend keeping me company BUT i never commit cause you see WOMAN are expensive things,,,,if you know what i mean!!!!! ;) I drive a R30 000 tazz which i bought cash ,,,yes cash!!!! i suffered for a while with public transport but now the car is mine... SO......does that make me rich???? SCrew what any1 else thinks...i dont give a faack...i spend money on clothes and restaurants,maintain my self and my car and my flat and thats dat.... so i spend and save and i dont go overboard with having the biggest #### in the cemetery..... Problem with rich ppl is they never know went to stop : 1 business is not enough,,they want 20.....1 car is not enough they want 1 for their cats and dogs.....so the writer can go blow coke for all i care.....having money and how you deal with it is a mind set.....stop spending money on woman and babies....it makes me sick when i see families of like 5 to 10 kids then they complain and moan..... Anyways....summer is here,,,im gonna go to the beach...see ya lata.... Scott Scot solar heating forget the advice about solar heating, its only worth it over the very long haul +5 years payback, if you're in debt that money will be better spent reducing your debt. You can reduce your thermostat temp and just take showers to save electricity in the mean time.. xf I agree I paid off all my credit cards using my year-end bonus, and while I might not have a great xmas, I am saving +-1000 a month for the next 2 years that the bank isn't making from me in interest payments anymore. freddie http://personalfinance.iafrica.com/debtmanagement/1329100.htm 11/26/2008 iafrica.com | mymoney | debt management The rich are in trouble Page 6 of 6 Solar Heating I installed a solar prefeed system myself..150l geyser and solar tubes..total cost..R8000...We are saving about R180 a month as a family.. but with elec. price increases i expect payback within 3 yrs. and ongoing increasing savings.... aj RSS Digg de.li.cious facebook http://personalfinance.iafrica.com/debtmanagement/1329100.htm 11/26/2008
"The rich are in trouble"