Hidden wealth in your debt.

The current debt industry surprises with astonishing statistics. Present records indicate that there are about 19.5 million active debtors, of whom 47% have debt impairments on their credit profile.

In short, having a debt impairment means that the debtor is between 3 – 6 months behind schedule in the repayment of his/her debt(s).

We teamed up with Blue Oaks Systems to investigate if there can be a solution.

Now is therefore the ideal time to ask yourself: “Is there hidden wealth in my debt?” Theuns Hanekom of Blue Oak Systems believes so. To help debt-ridden consumers find out if there is wealth in their unsecured debt, his company has just launched a unique online tool called RESET. RESET strives to assist debtors by starting to analyse their debt. In a recent survey, in which 64 individuals participated, the following was found: 4 of the 64 individuals did not have any debt impairments, while the remaining 60 (94%) had. By analysing these 60 individuals’ debt, RESET found that it could save these people a total of R 990 000, i.e. R 16 500 per person per year!

With over 8 million South Africans over-indebted and debt consolidation solutions failing, it seems a little hollow to talk about encouraging a savings habit.

But Hanekom believes that, until we can show consumers how to unlock savings from debt, we cannot begin to develop a savings culture in South Africa.

He feels financial advisers are trained to operate on one side of the personal balance sheet only, whereas the problem and opportunity often sits on the debt side.

“Consumers are not aware that a monthly savings may exist in their current debt. However with RESET, the first online debt consolidation calculator, anyone may review their debt in the privacy and environment of their own home.”

Hanekom says with the average savings of R2 300 per month per consumer reviewed, everyone’s debt should be reviewed.

“We have thousands of highly qualified financial planners in South Africa all selling retirement, investment or life products, which is right.

“But if they looked at the debt side of their clients’ personal balance sheets, you’d find that they could potentially improve their clients’ personal cash flow and either increase savings or as a minimum, reduce the need for clients to borrow more,” he says.

The traditional thinking to consolidate debt through taking a maximum loan doesn’t always result in achieving maximum monthly savings, says Hanekom.

“The problem is that if you don’t enjoy a monthly cash flow improvement that makes a difference, sooner or later you’re going to be borrowing again until such time as you just cannot access any more loans.”

Hanekom says that before looking at blanket consolidation and raising optimal loans, the first option must be to find maximum savings by taking the minimum loan.

Using debt consolidation effectively, and earlier in the debt spiral, could eliminate the need to advance to debt mediation or debt arbitration.

“But first you have to determine if there is wealth in your debt. All you have to do is look at both sides of your balance sheet.”

We concluded and secured a unique service level agreement with Blue Oaks Systems.

If you are interested in finding out how much wealth is locked up in your debt, contact Meyer de Waal to start the process of unlocking that value and wealth you didn’t know existed until now.

(meyer@oostco.co.za / 021 461 0065)