When investigating whether someone is living beyond their means, it helps to start with a simple but powerful framework. According to the Association of Certified Fraud Examiners, any recipient of funds – whether honestly earned or suspiciously obtained – has only four ways of disposing of income: they can save it, buy assets, pay off debts or spend it.
This framework forms the backbone of a comprehensive Lifestyle Audit and understanding it can change the way businesses approach financial risk.
Saving It – Unusually large savings or investments that don’t align with a known salary are worth examining. Where is the money coming from and does it match the individual’s declared income or SARS tax submissions?
Buying Assets – Property, vehicles, luxury goods and business interests all leave a paper trail. Asset tracing uncovers fixed property registered at the Deeds Office and vehicles registered on eNaTIS – as well as assets strategically placed in the names of associates or family members to conceal true ownership.
Paying Off Debts – Rapid debt repayment can be as telling as accumulating debt. When someone suddenly settles large financial obligations without an obvious source of funds, questions arise. This is particularly relevant where individuals under debt review in terms of the National Credit Act suddenly demonstrate unexplained financial recovery.
Spending It – Lifestyle indicators – holidays, entertainment, clothing and dining – paint a picture. When spending patterns consistently exceed income, the gap demands explanation.
At Uphando, we follow every one of these trails. Our Lifestyle Audit and Asset Tracing services give organisations the clarity they need to make informed decisions and manage financial risk effectively.