Last Friday, ratings agency Moodys dropped their outlook for SA debt from stable to negative. This means within the next 6 to 24 months it's likely we'll see the last of the three major ratings agencies cut our government debt rating to junk.
As an economist, I am now all but certain the downgrade will happen. SA will become a junk status borrower.
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You have to go back more than 400 years where the first major “asset bubble” happened.
Between November 1636 and May 1637, tulip prices soared 20-fold, before plunging 99%.
Then from January 1720 to June, the second major asset bubble occurred also known as the South Sea Bubble.
Shares from UK-based South Sea company surged more than eight-fold from £128 to £1,050, before collapsing... ››› more
It's coming to that time of year when many people may have an end of year bonus to look forward to.
Whilst your first thought may be to go out and splash it, you should resist the temptation.
So what should you do with your bonus instead?
Read on to find out…
What you can do with your bonus
There are definitely ways you can put your bonus to better work than splashing it on u... ››› more
In 2013 I warned investors that African Bank's drop in profits was the first ‘symptom' of a slow puncture for the South African Debt Bubble…
I told investors I believed many of the unsecured lenders and credit retailers will get themselves into trouble, but Capitec would prevail.
At the time African Bank traded at R22 a share.
By early July 2014 I called African Bank's imminent bankrupt... ››› more
When I look at the financial education I received at school and university, I always wonder how different my life would be today if I had better quality information.
Where would you be if your teachers, parents and mentors taught you more about managing money, the stock market, investing, savings and general day-to-day budgeting?
How different would your life be today?
Let's take a clo... ››› more
Ah South Africans! Blinded by politics, multicultural in every way, revered by the world... But man, do we suck when it comes to money?
We're a country of proud people. We've survived some of the most severe political turbulences the world has ever seen. We beat it all. Despite all the challenges our country still faces, we have a proud heritage.
Maybe that's why so many of us refuse to adm... ››› more
Since the South African reserve bank decided not to increase interest rates again, you have a brief moment of relief to make sure that you get your financial house in order before the next rate hike. Now is the time to be more frugal with your money. It's not the time to make more debt or increase your spending.
The challenges for consumers in 2016 are far from over. No one know if the reserve... ››› more
The cost of funerals in South Africa is quite expensive. As a result, when family members die, those left behind are often left with a serious financial burden. Funeral costs can reach tens of thousands of rands leaving the family member responsible for the burial no choice but to take out a loan or pay with a credit card.
Clearly, this isn't an ideal situation, especially for households with ... ››› more
Wouldn't you like to pay your house off six years earlier and save R500,000 in the process?
Just imagine the freedom you'll have knowing you've conquered one of your largest debts.
If you can beat your biggest debt, the smaller ones will feel like nothing!
Well, today I've found a special solution to do just that - without changing your lifestyle.
But wait… I haven't even told you ho... ››› more
Are you tired of being broke? I know that at one point in my life, I certainly couldn't handle. I turned every cent over twice. I even had to turn down parties, holidays and family gatherings because I just didn't have the money.
And I know I'm not the only South African who knows what it is like to be broke. Fortunately, I managed to dig myself out of by broke hole and today I live a life free... ››› more
According to Stats SA 36,300 new houses was built in South Africa during 2015.
This has been part of a steady recovery since the 2008 crash.
But before you go out and buy the first best rental property you see first heed my warning…
You need to bring the interest rate risk into your equation
Looking at the vast bulk of property prices today it’s clear to me buyers simply aren’t re... ››› more
Ideally from the moment you start earning money, you should follow key money management principles.
But for most of us, it doesn't quite work out like this. You have good intentions to save and budget, but you end up living month to month waiting for your wages to hit your bank account.
So what sort of money management should you be following?
Read on to find out…
Money management... ››› more
The South Africa Reserve Bank will announce its first interest rate decision for the year on Thursday.
In the build up to the announcement, many economists were expecting the Reserve Bank to leave interest rates unchanged.
In November last year the decision by the Reserve Bank brought the repo rate (the rate banks lend to one another) to 6.25% and the prime lending rate to 9.75%.
So what ... ››› more
When interest rates go up, the cost of borrowing rises with it. The banks simply pass on the hikes in interest rates they pay to borrow money to you the customer.
The South African Reserve Bank is in the midst of increasing rates. It raised rates last week and also in July.
Chances are more interest rates hike lie ahead.
So how should you handle your debt in the face of higher interest ra... ››› more
According to International Monetary Fund, Gross National Savings as a percentage of GDP in South Africa is one of the worst in the world at about 16%. Emerging markets and developing countries average 33%, while the world averages 25%.
We can't even use low salaries and a cost of living for our poor savings culture - the Chinese earn less than we do, and they manage to save over 50% of their GD... ››› more
Today saw finance minister Nhlanhla Nene give his medium-term budget.
Whilst he didn't drop in any surprises, he did say that the Treasury would be looking at ways to increase tax revenues.
Let's take a closer look…
South African economic growth should start rising next year
Last year, the Treasury introduced a number of austerity measures to cut back spending, reports Fin24. Nene... ››› more
Earlier today, Lonmin Plc announced its plan to raise $400 million through a rights issue.
The world's third largest platinum miner is taking steps to deal with the current commodity price slump, which has put pressure on its business.
Let's take a closer look at what's going on…
Lonmin is making changes to cope with the current climate
Lonmin [JSE:LON] wants to “raise $400 mill... ››› more
Debt does have its uses, such as helping you to buy a property. But if you use debt to fund your lifestyle, it's time to address the situation.
Carrying a lot of debt means you're working to service this debt, plus it stops you working towards financial goals.
So how can you get out of debt?
Read on to find out…
Prioritise your debt
The first step is going through all the debt ... ››› more
It's never too early to start financial planning. The earlier you do, the easier you'll find it to reach your financial goals.
So where should you start with financial planning?
Read on to find out…
Financial planning will help you reach your financial goals
Whatever your financial goals are, whether it’s to retire at 50 or pay off the bond on your house quickly, you need to put... ››› more
Yesterday, shareholders in Glencore watched in amazement as shares plunged over 25% in London and Johannesburg.
The fall continued this morning in Hong Kong, where shares shed over 27%.
So what's going on with Glencore?
Let's take a closer look…
Shares in Glencore bounced higher following yesterday’s fall
This morning, shares in Glencore [JSE:GLN] climbed back over 5% in ear... ››› more
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