Euphoric in the conviction of success with the nationalisation of mines following the ANC engaging the issue with the appointment of researchers, the youth wing has turned its sights onto the establishment of a state-owned bank.

Addressing the fourth annual investment conference of the Association of Black Securities and Investment Professionals in Johannesburg yesterday, ANC Youth League spokesman Floyd Shivambu said commercial banks only assisted in the creation of the indebted black middle class, which owned nothing but debt.

“The financial sector, including banks and insurance companies, are not helping our people, particularly the black majority and Africans in particular,” Shivambu said.

He called for the establishment of a state-owned bank through the recapitalisation of the Post Bank or the creation of a new entity that dealt with the financing of developmental programmes such as housing, transport, infrastructure and new industries.

He said the black middle class owned nothing and owed banks lots of money for housing and vehicle loans, and those in huge empowerment deals were indebted for life because they would not be able to pay back the banks before they died.

Shivambu said the banks did not fund developmental research and innovation, new industrial development and small businesses.

The state needed to ensure that the financing of the majority of empowerment deals by the banking industry should be directed towards new labour-intensive industrial processes and economic activities.

Shivambu said the state should control and be in ownership of the strategic sectors of the economy. This would make it a real developmental state and lead the private sector on the other aspects of the economy, such as industrialisation and banking norms.

“The state will be able to lead the redress and transformation programmes because the private sector is incapable of leading transformation in a way that will undo the injustices of the past,” Shivambu said.

He said the transformation charters adopted for the financial and mining sectors and other strategic sectors were proof that the private sector alone was incapable.

All public accounts should be shifted to the state bank, said Shivambu, and all public servants should be paid through the bank.

The Industrial Development Corporation (IDC) should be linked to the state bank and both state-owned entities should invest heavily in research and innovation.

Shivambu said that the state bank should invest heavily in new industries that beneficiated and industrialised South Africa’s natural resources and should consider funding import-substituting industrial projects, such as communication gadgets and electronics.

The public sector financing of industrial development through the IDC, the Development Bank of Southern Africa and the Land Bank was weak, while the National Youth Development Agency was under-funded, and the National Housing Finance Corporation (NHFC) was “useless”.

Shivambu said the NHFC should be recapitalised to fund decent housing development for middle-income groups who could not get loans from private banks. He added that legislation should be passed to limit the repayment of housing loans to 10 years.

Samson Moraba, the chief executive at the NHFC, was not available for comment.- Business Report

View full post on All Stories

What is Debt Stacking?

I have talked about this in one of my previous post but perhaps this is worth one more look. Debt stacking is an easy principle of paying off all debts in a pyramid type formula. It works and it can be easy plus you can eliminate your debt two or three times more quickly then you would have imagined.

STEP BY STEP PROCESS:

STEP 1: Make a list of all of your current debt. Put each amount in order from the least amount to the largest.

STEP 2: Set up an emergency fund in a savings account. The lowest amount you should have is $1,000. You may need it any at time, so it’s wise to have.

STEP 3: Be sure to pay the minimum amount every single month that is required on all of your debt until the first one is paid off.

NOTE: If you usually pay extra on some of your debt each month, apply that extra amount to first item (of the lowest balance) on your list. (for example if you pay $200 extra each month on item number 3 switch that amount, regardless of interest to the lowest balance)

STEP 4: When you have paid off the lowest outstanding balance, use that money against the next lowest balance (the second one) on your list. This will help speed up the amount of time it will take to pay off the second balance.

STEP 5: Repeat that same process to the next debt or until all have been eliminated. Remember you are not spending any more money and it will accelerate the process.

REMEMBER: For this to work effectively you must not create any new debt.

Here is a typical example:

TYPE:            AMOUNT:          REQUIRED MONTHLY                  INTEREST RATE:

PAYMENT:

Credit Card         $7,500                            $150                                                   16%

Car Loan          $10,800                            $350                                                8.5%

Student Loan   $14,600                            $365                                              7.25%

Mortgage          $139,000                         $940                                                    7%

TOTALS           $171,900                          $1,805                                             —–

If you only made the minimum required payments:

It would take 32 years to be completely out of debt.

In those 32 years you would have paid $205,485 in INTEREST for a total of $377,385.

If you apply the Debt Stacking Formula:

It would take just 12 years to pay off that same debt.

In those 12 years you would have paid just $86,343 in interest for a total of $205,485.

It may seem too good to be true but this is a relatively simple process that works. No changes are being made to your monthly payments, just a different approach. Every situation is different but debt stacking works for anyone.

How Debt Stacking would help with retirement:

When all of your debt is gone, take the same total minimum required monthly payment of $1,805 and invest it. Do that each month for the next 20 years. You would have been paying that amount for another 20 years anyway. If its invested at 8% you will have $1,179,533 in 20 years. Nothing in your lifestyle has changed.

In a nutshell debt stacking will dramatically reduce the amount of time it will take to pay off your debt and it will also reduce the total amount of interest you will pay AND it will help create the nest egg you have always wanted. That sounds pretty great doesn’t it?

When it comes to paying off debt you don’t always see results. It’s hard to remained focused and keep up hope when those large balances don’t seem to go away until the last few years. The key is to pay as little interest as possible so you will have more of your money in your bank account for the future. I hope this post helped you understand debt stack and showed you a little more about how to manage money.

Until next time,

Brandon

You can pay off your debts and save money at the same time! Say goodbye to your boss forever! A blog that will show you the secrets of the wealthy: http://www.howtomanagemoneytips.com

Get a free budget sheet, net worth calculator, tools and more: http://www.howtomanagemoneytips.com/ebook2.html

Article Source:http://www.articlesbase.com/wealth-building-articles/debt-stacking-how-to-manage-money-1383356.html

Step Number 1: Assess your current financial situation.

Are you currently in the red or black? Do you turn to the credit card to manage your money and every day purchases? This may be a definite indication that you may be in some financial trouble. Here is a free aid at the below link that may help quantify your current financial status.

moneycentral.msn .com/personal-finance/calculators/evaluate_your_debt_calculator/home.aspx

The Second Step: Analyze your spending habits.

Review your weekly and monthly purchases. Do you think that many of your purchases are unnecessary? When it comes to spending, there really is no ‘grey’ area. There are things we all need to buy and there are things that we don’t. You may need to re-learn how to manage money if you find that the majority of the money you spend is on eating out, entertainment, expensive clothes, alcohol etc. Here’s something you may want to try.

The Third Step: Budget.

I’m pretty sure I’ve mentioned this once or twice on my blog but creating a budget is probably the most important step to take. A simple way to start to budget is to sift through your credit card bill and make list that separates what you NEEDED and the things you DID NOT NEED. This should only take a a bit of time but it will show you how to manage money in a very easy way. If you want, try to go back through those bills a couple of months. The 1st thing you might probably see is that you can cut your bills by 50%! From here on in, when you are buying things down the road you now know exactly what deserves the ‘green’ light for the MUST HAVE spending and what gets ‘red’ flagged. Suddenly you have the start of a budget.

Step Number 4: Eliminate those ‘Red Flagged’ purchases.

Step 4 will take the most determination, dedication and will power on your part. The key of how to manage money is to know where your cash is going and why. You really do not need the finest fashions, or that costly bottle of wine, football tickets or that new pair of shoes if you are already having difficulty with your finances. What you really need are comfortable home and food on the table. Try to live a very modest lifestyle for a month and you will surely be shocked with how much cash you will save.

Step Number 5:  Find a low or no cost credit card.

Look at different companies but this is a very important step to take. The best way to decide where to go is if you carry a balance or if you regularly pay it off each month. If you carry a an amount that carries over  you need to find a credit card that has a low interest rate. It is extremely difficult to chip away at a balance if they charge you 18% interest or more. That money will add up fast. If you are lucky enough to be able to make the payments, use a credit card with low or no fees. The best solution is to get rid of your credit card altogether and only use it for emergencies.

Step Number 6: Consolidate your debts.

Plan this step carefully. The positive side is that debt consolidation offers the opportunity to lower your monthly payments, save on interest and may even help you eliminate debt faster. But there are downsides that must be considered like not finding out the root of your debt problem and preventing those tendencies that started the debt to begin with. You could end up paying more in the long run with debt consolidation if you aren’t careful.

Here is another free calculator that will show you how to manage money by debt consolidation.

moneycentral.msn .com/personal-finance/calculators/Consolidate_Your_Debt_Payment_calculator/home.aspx

Step Number 7: Seek financial advice.

This is straight to the point. You aren’t going to be able to know everything you need to when it comes to debt and the ways to eliminate it. These steps will be helpful but it is still wise to seek face to face advice from a professional.

The Eighth Step: Fix your credit.

Having bad credit is, well, bad. There are plenty of major purchases you will still make in the future and you must have a quality credit score to do so. Be sure to check your credit at your bank or even find out on the internet with a company like Equifax. The more quickly you repair your credit the better.

Can you manage money and eliminate debt step by step? I truly think that if you follow these 8 steps you will have the right tools to eliminate your debt. Good luck and let me know about the success stories that you have had!

You can pay off your debts and save money at the same time! Say goodbye to your boss forever! A blog that will show you the secrets of the wealthy: http://www.howtomanagemoneytips.com

Get a free budget sheet, net worth calculator, tools and more: http://www.howtomanagemoneytips.com/ebook.html

Article Source:http://www.articlesbase.com/wealth-building-articles/how-to-manage-money-eliminate-debt-step-by-step-1291791.html