In this article, I'm going to use a hypothetical example of a 40-year-old widow who has received a R15 million life insurance payout.
She has two children, earns R55 000 per month, and has outstanding debts. We'll explore how she can allocate these funds wisely to secure both her immediate financial needs and long-term security for herself and her children.
Financial overview
> Life insurance payout: R15 million
> Monthly salary: R55 000 (from her employer)
> Mortgage balance: R3 million
> Outstanding car loan: R180 000 (on a vehicle worth R500 000); and
> Two young children
Her financial priorities.
Here's a step-by-step approach to allocating the R15 million to provide stability.
1. Settling debt: The first priority
The immediate focus should be clearing her outstanding debt to reduce monthly obligations and relieve financial stress:
> Mortgage (R3 million): Paying off the mortgage ensures that her home is fully owned, providing long-term security for her and her children without the burden of monthly mortgage repayments.
> Car loan (R180 000): Settling the car loan will further reduce financial obligations, freeing up cash flow for future needs. (The) R3.18 million will be used to pay off the mortgage and the car loan, leaving R11.82 million from the life insurance payout.
2. Setting up an emergency fund
Bu hikaye The Citizen dergisinin October 16, 2024 sayısından alınmıştır.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber ? Giriş Yap
Bu hikaye The Citizen dergisinin October 16, 2024 sayısından alınmıştır.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber? Giriş Yap
Engineering assets to go
TIMED AUCTION: MACHINERY, EQUIPMENT UP FOR GRABS
Sewage at Cradle of Humankind
'STOP': INFRASTRUCTURE COLLAPSE SEES MUNICIPALITY RELEASE RAW WASTE INTO VAAL
SA food insecurity deepens as inflation bites
The number of people in South Africa able to meet their minimum nutritional needs slipped last year, as a weak economy and inflationary pressures hit households and deepened food insecurity.
SA actress on a wild ride in 'The Penguin'
MARIE BOTHA: BOEREMEISIE’ HITS BIG TIME-AND LOVES IT
At our pets' beck and call
Let's face it: somewhere along the way, pets stopped being just animals and became full-fledged members of the family.
China, Myanmar have least internet freedom in world
Washington - Myanmar and China have the world's worst internet freedom, with declines reported in a number of other countries, led by Kyrgyzstan, a study said this week.
Pretoria varsity probes EFF students after 'clear call for violence'
The University of Pretoria (UP) is investigating an incident in which members of the EFF Student Command (EFFSC) chanted the Kill the Boer song during their leader Julius Malema’s public lecture last week.
1 in 4 teenagers addicted to booze
STUDY: 26% OF KIDS GET FIRST DRINKS AT HOME’
Portrait by humanoid robot on sale
SOTHEBY’S: ONLINE AUCTION TO EXPLORE THE INTERSECTION BETWEEN ART, TECHNOLOGY
Vest made famous by rapper Stormzy sold for R16m
A stab-proof vest decorated with a union jack flag created by British street artist Banksy, similar to one worn by hip-hop star Stormzy at the Glastonbury Festival, sold in London for £780 000 (about R16 million) this week.
