Spoiler alert: If this was one of my clients I would have to give them an extreme talking to and, if they didn’t agree to follow my advice, I would have to fire them.
Moneyweb editor Ryk van Niekerk wrote this article and beat me to to it. I think that it is a good way of demonstrating the perilous position in which our fragile economy finds itself.
Ryk “made a few simple calculations and chopped off several zeros from the numbers and presented the country’s budget as a normal monthly household budget – a budget most people can relate to.”
It reflects the sad state of affairs as the expenditure greatly exceeds income… it is clear that the money of this household has run out.
This budget shows a total income of R99 458 a month. Not bad, but the total expenses amount to R117 758, representing a shortfall of R18 300 or 18% of the total income. This means that the household needs to urgently see the bank manager and plead for an extended overdraft or a personal loan, on top of its existing debt of R2.5 million.
This existing debt is also a big problem, as it sucks interest payments of R13 600 a month from the budget and it does not bode well if additional credit is granted, as interest repayments will continue to increase.
To read the full article, please click here.
Well put Ryk, well put.