A proportion of all salary rises and/or bonuses should be put into the bond.

This advice, says Steward, is particularly applicable to DINKYS - double income couples with no kids (as yet).

“In many cases all or part of the one partner’s salary should go into the bond. When this is done we have seen homes paid off in five to ten years and then sold at a profit, enabling the couple to move up fast on the social ladder.”

DINKYS’ saving, adds Steward, is particularly necessary where the couple will have children.

“The cost of children is usually higher than most couples realise – by saving they should do all they can to make that subsequent phase less difficult.”

It is often said, says Steward, that those buying in the affordable market of R350k to R800k simply cannot pay any extra on bonds each month but this is almost never the case once they have been in their home three or fours years.

A wise bondholder/investor, says Steward, will always strive to put down a deposit larger than actually asked and to pay his monthly bond repayments above the stipulated rate.

“With the average bond interest rate at 9% or 10% the additional payments assures the bondholder of a better return than most money markets – and reduces the pay off period far quicker.”

“If past experience is anything to go by, should the rates drop again this year, it is probable that those people paying bonds on homes will heave a sigh of relief – and set about spending the extra money now available to them.”

“Exactly how South Africans, who, whether black, brown or white, 40 years ago were known for their willingness to save, have become such spendthrifts and debtors, is something not yet fully explained – but slick marketing of credit facilities by banks and chain stores must bear at least part of the blame,” says Steward.

The recession – and other factors – should now lead to a change of attitude, says Steward.

“We could all learn a lesson or two from the American billionaire Warren Buffet,” says Steward.

“He bought his first share at the age of nine and continued to save every cent he could for the purchase of more shares thereafter. He used money saved by doing a newspaper round to buy a farm at the age 14 and after marrying young he has continued to live in the same house for the rest of his life. He has told friends that America’s disease is always to overspend and that he personally feels no need for most of the extras and luxuries that other people appear to find essential.

“My advice is to focus on their bond repayments and to resist the temptations of regular expensive entertaining, big cars, white goods, holidays and the like.” – Eugene Brink

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