It took them only a couple of months to spend their mom's life insurance payout of R1,8million

Thembi* and her 3 children lived in a beautiful 3-bedroom home and her boys had their rooms at the back of the house. As we buried her, all I could think was, IF ONLY.  I had just found out that the house they were living in was not theirs. Thembi was actually renting the house. As a matron in a local clinic, she was able to afford the R5 800 rent. But what about her kids, what would become of them?

Thembi’s oldest son was 25 years old. We were very disappointed when he left his job soon after his mom died. He knew that there was going to be an insurance pay-out and he said he was planning to use the money to start his own business. Her second born was 21 and he was still trying to figure out what he actually wanted to do. He had dropped out of varsity a year earlier. Her youngest daughter was just 18 years old. She had just finished matric and I was happy to hear her say she was going to use her mom’s insurance pay-out to go to university.

The first insurance pay-out was within a month after Thembi’s death and we were told it was about R500 000. I’m told the kids were suddenly throwing parties and telling the shebeen queen to “fill up the tables”, they were going to take care of the bill. It didn’t help much that this was just around Xmas time. By the end of the festive season, the money was finished. They seemed to calm down after this and we all thought well, maybe they will be responsible with the big pay-out of R1.8million that was to come from Thembi’s former employer. Thembi had worked as a nurse for over 30 years – only taking breaks during her pregnancies. I was asked to speak to them and I tried. I asked them to at least buy a house with the R1.8mil. The owner of the house they were living in was prepared to sell it to them for R750 000. I convinced them that they would always have a roof over their head no matter what happened. Also, this home would always be a good memory for them of their mother and her hard work. They could rent out the back rooms and use the rent to pay for water, electricity and rates. I also tried to get them to invest at least a portion of the upcoming big pay-out and draw a monthly living allowance from the investment so the money would last them longer. I knew as I left them that they were not going to take any of my advice. They came up with all sorts of reasons why they wouldn’t buy the house. They wanted to start a business and would not invest any of the money. They actually thought R600 000 each was a lot of money and they couldn’t see how they could run out of money in a short space of time. I pointed out to them how quickly they had used the first R500 000 and that they could end up penniless in a short space of time if they didn’t invest the money but they wouldn’t hear of it.

As you may have guessed, the big pay-out came within weeks of our meeting. Each child got just over R600 000. The partying started all over again. I’m very happy that the youngest child was already enrolled at varsity by this time, far away from home. But her two big brothers continued with the parties. Four months down the line, the landlord evicted them. They were not only throwing parties every day, but they were also not paying rent. They went out and rented back rooms in a house nearby. Some of their mom’s furniture was sold and had to be given away as the back rooms were too small. With all the “friends” and everyone asking them for money and they believing they had all the money in the world, they were penniless in a very short space of time. They had blown their mom’s money  just months after her death and were now penniless. No one is prepared to help them as they were too big to listen to anyone while they had the money. The only reason they are not starving is because their younger sister is helping them out with groceries.

This is just one of many cases we witness every day in our townships. Sometimes it doesn’t even matter that the parent left a home behind – kids can ruin everything after the passing on of their parents. As parents, we take out life cover so that our children would want for nothing after we are gone. But often, the life cover pay-out is abused – easy come is indeed easy go. So what can we as parents do to prevent this wastage? Is there a way to ensure that our life cover pay-outs are not wasted in a short space of time? How can we make sure that proceeds from the life cover settles all debts and then our children receive a monthly living allowance for years to come instead of a big lump sum? Hopefully if they receive a monthly living allowance, they will eventually calm down as they grow older and become mature. They can use the monthly allowance to pay for school fees and finish their studies and start working. They can then receive the big pay-out as inheritance only when they are finished with their studies and are actually working and responsible adults

To find out how to do this, attend the talk by Phumelele Ndumo on Saturday 15 November in Randburg at 10am. See below for more details on how to book your space

*Thembi is NOT her real name


 Thuthuka SA would like to invite you to “a money talk”

with Phumelele Ndumo


The talk will cover:
  • Why we must all have a money pot
  • 10 Commandments for Financial Success
  • How to save for the university education of your children
  • Why you must save for retirement
  • How to save for a deposit for your home / car
  • What you must talk about before you say “I DO”
  • Why your personal loan will make you personally poor
  • How to clear your debts using Phumelele’s Debt cancellation plan
  • Find out what your budget says about you
  • How to make the most of your bonus


Dept-to-riches-smallOver 10 000 copies sold

 Date: 15 November 2014

Time: 10:00am-11:30am – Please arrive 30 minutes prior for seal allocation

Fee: R150.00 PP includes Q&A session with Phumelele Ndumo

Venue: 411 Main Avenue, Ferndale, Randburg


To secure your ticket make all payments payable to:

Phumelele Property Holdings (Pty) Ltd

Bank: Nedbank

Branch: Parktown

Branch code: 19 44 05

Account number: 1944 1946 81

REF: Your Name & Surname

Email proof of payment to


The book “From Debt to Riches” by Phemelele Ndumo

will be on sale at the event for only R130.00


For more information contact: ThuthukaSA

on 011 781 3351 Monday to Friday between

8am and 4pm.

Limited seats available book early to avoid disappointments

regrettably not tickets will be sold at the door.


Warm regards

Phumelele Ndumo

Share this knowledge with your loved ones