From Debt to Riches review by Mphume Nyambi, BSc Human Psychology graduate

Please see below the summary of the book From Debt to Riches written by Mphume, she is a graduate and one of the learners at Sandoz. Hope you enjoy the review and you too will be encouraged to read the book. Note that the emphasis as shown in bold are mine



This book is written well with each chapter covering different subjects in a clear and interesting manner with the important information, warnings and case studies or true life stories written in green boxes.
Here I have summarised Phumelele’s thoughts and advised in each chapter accordingly:

Chapter 1 = There are 2 types of debts, bad debts which don’t increase your wealth over time and good debts which does increase your wealth over time.

Chapter 2 = Getting into debt is inevitable but managing debt is not impossible. In this chapter Phumelele gives an example of how buying furniture on credit is more of an expense than you realise. She teaches you how to manage your debt and how bad debt can become ugly debt.

Chapter 3 = In this chapter Phumelele brings to light the very real effects of interest rates, how they are calculated and what they mean.  You learn in this chapter that the smallest and shortest term is the most expensive debt based on interest rates. You also learn in this chapter how to better take care of credit cards and their implications if not used properly.

Chapter 4 = In this chapter Phumelele talks about how one gets themselves out of trouble later getting into Excessive debt they can’t easily get themselves out of. She mentions the National Credit Act, garnishee orders and prescribed debt. She reminds us to not sign forms you do not understand and how you can find comfort in debt counsellors, though there are advantages and disadvantages to that, and how you can consolidate debt you can no longer pay into debt that has a lower interest rate but a higher amount. She warns you of not being silent when in debt but to always respond to emails and calls from your creditors before you get the oh so dreaded letter of demand!

Chapter 5 = This chapter Phumelele states how in South Africa, 99% of us will rush into buying a car when you really can’t afford us. She reminds us how a car is not an asset.

Chapter 6 = This chapter talks about how you should budget according to our means and gives notes from the cars you drive to the coffee you drink, from your cell phone bill to our grocery lists.

Chapter 7 =  In this chapter, you see how saving our money can easily increase it depending on how you decide to save it. She gives us different examples of how to save our money and have it grow too from an early age.

Chapter 8 = This chapter talks about insurance. Phumelele emphasises the fact that if you have something you can’t afford to lose than you should insure it, this includes our lives and the lives of our loved ones.

Chapter 9 = This chapter talks about the importance of having a last will and testament, how to draw up one, what should be in your will and how it’s made valid.

Chapter 10 = Phumelele gives us 20 good reasons why to buy a house. She gives advice on how you can get a loan for the house you want and how to repay it back affordably.  The chapter lays out the advantages and disadvantages of being a homeowner and how to not be in a position where you find yourself having your house being repossessed. What I found most useful was how she aided you into the possibility of having to sell your house if you are to lose your job and you are no longer able to pay your instalments.

Chapter 11 = Continuing from the last chapter, Phumelele teaches how you can use your house to create wealth. She states that a house is an asset that continues to increase in value.

Chapter 12 = This chapter talks about the Rural Housing Loan Fund and how people earning less than R10 000 can be able to get loan to build the house they want.

Chapter 13 = This chapter talks about the importance of investing and saving for you kids’ education. She talks about how one can use their house to pay university fees.

Chapter 14 = Phumelele lists the 10 types of relationships people have with their money. She helps you to identify which relationship you have personally with your money and the advantages and disadvantages of each type of relationship.

Chapter 15 = This chapter tackles the three different types of marriage contracts found in South Africa. Phumelele goes into detail about what these contracts could mean for your finances if there is ever a breach of contract.

Chapter 16 = The very last chapter touches on investing your money in the stock market.

Phumelele gives a lot of key points but my takeaway points are:

  • Be honest to yourself about the money you actually have and the lifestyle you can afford
  • Think about important things (assets) first, things that will make you money at t end of the day instead of being more of an expense.
  • Attaining wealth is a process and not a get rich quick scheme.

Share this knowledge with your loved ones