Dear Member

We were at a women’s day function. She approached me privately. She was at her wits’ end. Her 25 – year old daughter has been to several universities and she hasn’t got a single course to her name. She also refuses to work. She said to me with a sigh “You know I have done everything I could for my daughter. I am now tired and scared that she will always be dependent on me….” Lately, I seem to be coming across more parents who have done the best they could for their children but the children aren’t making it. What is the problem? Are we perhaps doing so much for our kids that we have killed the desire to let our kids strive for themselves? Is this why some of our children never become responsible adults?

I have pondered the question, can parents teach their kids good money skills?

When I received an email from Thabo, I knew he was different and that he is going to be financially successful. I wondered if he could provide an answer to my question above i.e. can parents teach their kids good money skills? At 27, Thabo has a car and owes only R65 000 on it and has just bought a home. I found out about him because he emailed me to say he bought a copy of my book “From Debt to Riches” early in the year. After reading it, he decided it was time he bought his own home. He then went ahead and has just bought a flat. He emailed me to seek my help to get the right life cover for him as he didn’t want to get credit life. Please read pages 110 – 123 of the book to find out why I have misgivings about credit life. Speaking with him, I realised that Thabo is very clear about his life goals so I asked him to write to me and share with me his life story.

 

Thabo’s story

I come from a family of 6, my father is an Orthopaedic surgeon with his own business and my mother is a full time lecturer and nutritionist. My parents took upon 5 other children so we were 11 children altogether. They also supported another family because they cared about people. Despite the fact that we were a big family, I was brought up well. I went to a private school, graduated with a Diploma in Sound Engineering and I am currently studying I.T. I remember my father’s words “Life has to be lived according to your standard, if you want a better life you will make better decisions”.

I was taught to save money by my parents. I had to learn to save to get my own things. With that habit I ended up building a bedroom recording studio that turned into a small business for me while I was in college. The capital was around R12000, profits started accumulating after a year which I used to buy new equipment for the studio.

While growing up I was inspired by technology innovators. I read a lot of business magazines and technology magazines. I wasn’t much of a book reader but I read things about handling money, drawing up monthly budgets (which I still do till today).

When I started working, I sacrificed up to 60% of my salary and opened a 32 – day notice account and saved. I could do this because I lived with my parents and used a taxi to get around. In 2 years, I managed to save R25 000 which I used towards buying my car. I didn’t stop saving when I bought my car. I kept the 32 day notice account open and continued to save R1000 monthly through a debit order. When I read your book From Debt to Riches, I decided to buy ETF’s shares and I closed my savings account.

I would like to travel the world and get the hand felt experience of all 7 wonders of the world. I also want to open a company in I.T. and Audio-visual and obtain a Doctorate in Information Technology.

As you know, I have just bought my first property. I have read your book and continue to use it as a guideline for steps to take to make better financial decisions and secure financial independence.

A wise man once said “Don’t work hard but work smart“.

I’m sure you agree with me that Thabo is headed for brighter days ahead. Sorry ladies, I’m not at liberty to give out Thabo’s number J

What would surprise most is that Thabo is able to do all of this on a monthly salary of only R17 000. He is able to achieve all this because he does NOT borrow from the future. He saves and puts a deposit hence he can afford to do more with less. Debt is expensive.

1.  He saved a big chunk of his money and paid a big deposit for his car

2.  He buys ETF shares on an on-going basis so he always has cash in hand to meet his needs

3.  He has no other debts aside from his car and now his new home

Indeed cash is king when it comes to small consumer items. I hope you get the recipe for financial success. As I always say in my talks and workshops, “It is NOT about how much you earn but it is about how you spend what you earn that matters”.

Thabo could have had an even better “quality” of life had his parents not taken on 5 additional children and supported the other family. They could have provided him with everything he needed and wanted. But by helping others less fortunate than themselves, they taught him the value of saving, compassion and striving to make his dreams a reality. So maybe the secret to bringing up children who will become responsible adults is NOT to give them more money and buy them everything they want. Maybe we should give our children more of our time, love, attention, guidance and less money and things.

MY Challenge to Thabo

Thabo is already doing very well but I still stretched him.

1. I told him to aim to pay off his new home NOT in 20 years but in 9 years. He should do that comfortably as his income is likely to grow as he is still furthering his studies

2. I told him to save and buy furniture for his flat in cash

3. I also challenged him to take an ETF based RA in about 2 years’ time so that he supplements his employer pension. You can never have enough money at retirement

4. I also urged him to increase the monthly amount he uses to buy ETF shares so that he can pay cash for lobola and his wedding one day. I’m sure there is a Mrs Thabo in waiting

My wish is we have more people like Thabo. I would love to hear your views. Please send them to phumelele@thuthuka-sa.co.za

DO YOU WANT TO TEACH YOUR CHILDREN GOOD MONEY MANAGEMENT SKILLS?

Would you like your kids to be more financially responsible? I’m a firm believer that better late than never. Your kids might be big now and you might think there isn’t much you can do. How about buying them a copy of my book and use that to begin to talk to them about money & help them to make wise money decisions? The book is available at CNA and Exclusives bookshops for only R134 a copy. You can also buy it online through Kalahari

 

From Debt to Riches

Warm regards

Phume