Dear Member

Below are just some of the news highlights that I wanted you to read before reading the plan

About 3 million garnishee orders are currently active in South Africa, according to the National Debt Mediation Association [NDMA]. The NDMA estimates that about 8,000 heavily indebted people apply for debt counselling each month.

Garnishee Orders

Between 10 percent and 15 percent of workers at Lonmin and Anglo American Platinum Ltd. have at least one garnishee order against them, according to Kem Westdyk, chief executive officer of Summit Garnishee Solutions, which helps the two companies review claims against their payrolls. Most orders are issued in favor of African Bank and Bayport because they provide the bulk of loans and do their own collections, while lenders such as Capital use lawyers and debt collectors, he said.

Capitec, made a pre-tax profit of R80 million

Riaan Stassen, the chief executive of Capitec, made a pre-tax profit of R80 million from exercising share options and share appreciation rights during financial 2013.

In the company’s annual report, chairman Michiel le Roux’s comment is headed: “The Revolution continues”. …“We have huge growth opportunities,” writes Le Roux. In the report, he argues thatthe growth of the country’s unsecured lending marketis a triumph for the government’s ambition to extend banking to those previously excluded from banks”.

South Africa is estimated to have 3 million garnishee orders and judging by the emails I am receiving daily, these are increasing daily. We also have some 9,3 million people with an impaired credit record. Debt is costly and we must go back to basics and save to buy the things we need. It is better not to have everything you need and have peace of mind because you don’t have debts than to have everything you need and want and be heavily indebted.

Please forward this email to the people you care about. 


1. If you don’t like paying debts, do NOT have any. Some people don’t like paying their debts and yet they take out debt and then simply don’t pay. If you don’t like paying debts, then do yourself a favour, don’t have any debts.

2.       Do NOT have unnecessary debt. The more debt you have, the higher your chances of defaulting on your debt payments. Decide that you will NOT have more than 4 debts or accounts.No one needs a clothing store account. You should only have a clothing store account if you don’t have more than 4 debts and if you can comfortably pay it off. Also, the limit should not exceed R2000. We can also save and buy furniture cash, at a much cheaper price than buying furniture on hire purchase and end up paying 3 times for the furniture as we pay for warranties, interest, initiation costs, credit life, insurance, etc…

3.       The first step to clearing your debts is acknowledging that you are heavily indebted and you must pay off your debts. Accepting this truth is the first step to dealing with a high debt situation. If you are still looking for more loans to pay off your debts or you have not done anything to tone down your standard of living, then you have NOT accepted the truth. Signs that you have accepted the truth that you are in debt and you must get out of debt are:

a.       You confront yourself and find out why you are heavily indebted. The answer to this question is different for different people. Hopefully you will make sure that you don’t fall into the same trap once you have cleared your debts. To give you an example, there are “friends” who compete and as soon as one friend buys a new car, some of the friends change their cars too. If this is you, then you must take caution and do NOT compete with your friends. If you must compete, compete with yourself

b.      You are doing your best to tone down your standard of living e.g. you cut your store cards and you continue to pay them off, you cut your credit card and continue to pay for it. You are cutting these so you stop yourself from continuing to buy clothes and other staff on credit

c.       You stop mall crawling. Some people go to shopping malls every weekend to buy things they don’t need using money they don’t have i.e. on credit. If you are one of them, then you need to stop going to the mall and find ways to entertain yourself that don’t involve shopping.

d.      You share with your loved ones that you are heavily indebted and you need their help to hold you accountable for whatever course of action you need to take to get out. One of the basis of a good relationship is honesty. If you cannot be honest with your loved ones and friends about your debt situation, then you will continue to go shopping with them on credit instead of getting them to help you keep away from shopping. Your true friends will not laugh at you when you confide in them about your debt situation but they will ensure that they don’t invite you when they go shopping so you don’t get tempted. Who knows, some of them may join you and decide it’s time to lead a more moderate life style. In fact, one of the best ways to ensure we don’t buy things we don’t need is that when we go shopping, we don’t go with friends. Shopping with friends can lead you to buy more than you would have if you were on your own.

e.      If you are heavily indebted, you should not be eating out. Eating out costs in the region of R50 to R200 a meal, depending where and what you eat. Even R50 can buy you a full grilled chicken which you can eat for a few days

f.        Please read pages 53 to 55 of the book From Debt to Riches for more steps you can take to reduce your expenses.

4.       You must list all your debts, the amount owing, the settlement date, monthly instalment, credit life and the interest rate on a spreadsheet. Please see Exercise on reducing your debts on page 26 of the book From Debt to Riches if you are not sure what to do

5.       I suggest that you attack your smaller debts first rather than your high interest debts. Hopefully as the number of debts you have reduces, you will be encouraged to stay with the plan. But you must continue to pay for all of your debts monthly otherwise your creditors will take legal action against you

6.       You must use whatever “savings” you have gained by toning down on your lifestyle habits in 3 above to increase your instalments towards your smaller debts so you  pay these off first and you do so sooner than the settlement date

7.       As you settle each debt, you must then use the money that you used to pay towards that debt [instalment] to settle your next smallest debt. Having an accountability partner might be necessary to ensure that you stay on track

8.       I don’t encourage you to get a consolidation loan to settle your debts because every time you apply for a loan, you must pay initiation fees, get credit life, etc… these are unnecessary costs. You must also ensure that the loan you get is cheaper than every other loan that you will pay off otherwise there is no benefit to you. Do NOT borrow from Paul to pay Peter.

9.       Confront your debts and attack them as above. Note that if you go to a debt counsellor, there is nothing for mahhala. You will pay legal fees and rehabilitation fees and these fees alone will cost you about R10 000. You could use the R10 000 to pay your debts. So think very carefully about going to a debt counsellor. Your focus should be to reduce your expenses and pay off your debts and you should only go to a debt counsellor when you have tried your best to do this and you still cannot cope. At no stage should you skip your payments because if you do, your creditors will write a letter of demand at which point you are no longer protected by the NCA for that particular debt. Please read pages 58 to 60 for more detail on this

10.   Change your relationship with money if needs be. If you have a poor relationship with money and this is causing you to get into unnecessary debt, then it is time to change. As an example, if you want everything NOW and are willing to have lots of personal loans, clothing store accounts, credit cards and furniture store accounts to have everything you want now, then it is time for you to change your relationship with money because debt is costly. Please read chapter 14: Do you know what relationship you have with money?

11.   Have a plan not just to get out of debt but to be financially independent. I encourage each one of us to aim to be financially independent because if you want to be financially independent, you will not waste your money taking on unnecessary debt that makes you grow poorer. Instead, you will learn as much as you can about savings and investments and you will invest your money before you spend it.

12.   Once you are out of debt, resolve that you will NOT go back again. In my experience, the life we live today is very much a decision. You can either spend your life paying off debts and complaining and moaning about debt or you can decide that you will get out of debt and empower yourself with financial knowledge, invest your money and enjoy a prosperous life. I hope you will choose prosperity

Say NO to debt and YES to prosperity.

Please send me your comments on I would love to hear your thoughts on the plan.


Slow economic growth, job losses, high increases in food prices, high petrol prices, high cost of electricity, high school fees and medical costs and high levels of indebtedness are causing employees to demand higher- than- inflation salary increases. Arm your employees with knowledge that will help them to get out of debt and be financially independent. Knowledge is power. This will increase their morale and loyalty to you.

From Debt to Riches

Kaya FM Bizz Podcast

Stevie B speaks to Phumelele Ndumo, Founder of ThuthukaSA and author of the book “From Debt to Riches

Stevey B


Play in new window Download (Duration: 13:09 — 12.0MB)

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Warm regards


Share this knowledge with your loved ones