My name is Ken. I earn a net salary of Sh112,374. I own a three-bedroom town house whose current value is around Sh4 million (land inclusive) which I built five years ago. I also own some two acres of land purchased a few years back, whose total current value is approximately Sh750,000.
I intend to build my village home in one of them, in three to five years’ time. I however intend to dispose the other one to enable me to purchase and increase the one I would build a home in, so it may be approximately 1.5 acres of land. I have Sacco loan worth Sh2.5million, Sacco deposits worth Sh700,000, Sacco shares worth 40,000, ancestral land of three acres under eucalyptus trees (I have been selling some, though the income is low and erratic).
I am married but my wife is unemployed, and she runs our small electrical shop which is yet to realise any meaningful profit two years since we started it. We have a bee-keeping project of 50 hives, which is still at the infant stage. Hopefully, it will be profitable by mid-2025 owing to the effort put in, including hiring a qualified apiarist for better management.
My monthly income and expenses are as follows: Net salary Sh117,800, employer’s shopping voucher Sh3,000, employer’s airtime Sh3,000, Other work-related income Sh21,000. Tithe Sh5,000, pension deduction Sh5,800 (employer matches the same amount, currently standing at Sh1.8 million) home shopping Sh20,000, pocket money Sh10,000, insurance savings (12 years’ policy, maturity every three years.
First maturity due in December 2025) Sacco savings Sh5,000, Sacco loan repayment Sh53,000, Power Sh1,000, Black tax Sh15,000, My two children’s school fees Sh7,000, Fuel and service (I own a motorcycle) Sh4,000, Financing projects (The house and others mentioned) Sh14,000.
I pay no rent and water as I have enough water tanks for water storage and a solar backup, hence less power bills. I need to raise Sh400,000 to enable me to finish my three-bedroom house in the next 18 months. I intend to make the bee keeping business profitable and expand it to enable me to build my four-bedroom village home bit by bit in the next five years.
My immediate plan is to buy an efficient 1,000cc or 1,300cc car worth Sh800,000 for my personal use by refinancing my development loan of Sh800,000 to be repaid in 84 months. I intend to use this car to offer Uber or Bolt services at my free time to assist in repaying the loan deductions and part of the fuel (note that my work time is very flexible). Please advise on how I can achieve all these given my financial circumstances.
Alex Kibebe is the founder of Rubiani Wealth Management Ltd and an investment consultant and business development coach
From the information you have shared, your net monthly income is Sh144,800 with current expenditures amounting to Sh129,800. This leaves you with about Sh14,000 to allocate towards your financial projects as indicated.
Your current investment goals include purchasing a car valued at Sh800,000, upgrading your home with Sh400,000 and building your upcountry home over time.
Given your loan repayment of Sh53,000 per month, I would caution you against refinancing the loan to purchase a car as this would increase your monthly repayment to about Sh70,000.
This is a substantial amount as it would take up almost half of your net income. Such a move could strain you financially especially given that you don’t have much left after you meet your monthly expenses.
Instead, I would suggest that you keep your loan at its current level and channel all your extra income towards fulfilling your goals one at a time – depending on how you prioritise them.
To do this, you could invest the Sh14,000 that you have for project financing in a Money Market Fund (MMF) or similar investment account.
Additionally, by cutting back on certain expenditures—such as reducing the black tax by Sh5,000, trimming your shopping budget by Sh2,000, and lowering pocket money expenses by Sh3,000—you could boost your monthly savings to around Sh25,000.
If you commit to consistently save this amount in a Money Market Fund, you could accumulate roughly Sh370,000 by the end of 2025.
With a top-up from your insurance policy payout, this could increase your fund to at least Sh500,000. If you continue to invest your savings in the MMF and top up any additional income from the sale of eucalyptus trees and your bee-keeping venture, you should be in a position to purchase the car by mid-2026.
Once you have bought the car, you can now shift your focus towards upgrading your home by channeling your savings and any extra income – including any potential earnings from Uber or Bolt business to your investment account.
By doing so, you should accumulate the Sh400,000 needed for the upgrade within roughly another year. After raising funds for the home upgrade, you could apply the same investment strategy to fund building your upcountry home and to fulfill your other investment goals such as expanding your bee-keeping venture and improving your wife’s business.
However, given that the upcountry home may not be of immediate necessity, it might be more beneficial to first focus on reducing your Sacco loan repayment.
This would free up more of your income and increase your capacity to invest while reducing your current high exposure to debt.
One way to achieve this is by increasing your monthly repayments to pay off the loan faster. Alternatively, you could invest your savings and any additional income you get in your Money Market Fund for some time.
You could then use the accumulated funds to make a substantial lump-sum loan repayment. This would lower the outstanding balance and significantly reduce your monthly repayments, giving you more disposable income.
As you get more funds for investing, I would also recommend diversifying into low-risk, guaranteed income streams to improve your financial stability.
Treasury Bonds for instance offer consistent, reliable income over time. In the longer term, you could also consider investing in rental properties, as rental income provides a steady source of passive income. These strategies would help you build a strong wealth portfolio for you and your family.
If you have any money problems, send us an email at [email protected] and leave your number for contact. Money questions will be answered on this column.
