My name is Ibrahim, and I have been struggling financially for seven years. I have had to depend on odd jobs (vibarua) in the village to survive. A few months ago, my father passed away, leaving behind several acres of prime land. My brothers and I agreed to divide the land, and I was to get three acres.
In my area, plot prices range between Sh450,000 and Sh600,000 per plot. If I sell the land, I can get up to Sh14.4 million, which will give me a new start in life. After all these years of struggle, I am desperate to change my life.
I’m torn about what to do. Should I sell the land and invest the money? Or will selling my inheritance bring a curse on me? My goals include buying a car, building a house, getting married, and starting a family. I want to go from nothing to something, and I want my village to transform. Please help me make the right decision.
Expert Advice: Benjamin Cheruiyot, Engagement Officer at Abujani Investments
Having a large sum of money after a long period of financial difficulties can be a blessing, but only if you are mentally prepared to manage it.
Many people, after receiving a windfall, quickly spend their money by trying to live up to their new status. There are countless stories of lottery winners, land heirs, and people who received compensation, only to lose it all within a few years. Without a proper financial plan, a lump sum can easily slip through your fingers.
To make the most of this opportunity, you need a solid financial plan, one that generates sustainable income over time. A thoughtful investment strategy that suits your risk tolerance is crucial. You need to invest in things you understand, and not be tempted by flashy, high-risk schemes that may end in disappointment.
As someone who has been living on a tight budget for a long time, it’s easy to get carried away when you suddenly have access to large sums of money.
Be careful, as many new friends and acquaintances may come forward, eager to take advantage of your generosity. This is when you need to exercise self-control. The wrong advice or poorly researched investments could leave you worse off.
To get the most money from selling your land, I recommend speaking with a financial advisor. Since you don’t have a family yet, your focus should be on building assets that will provide you with growth and income.
Consider investment options that will allow you to grow your wealth while retaining some liquidity for short- and medium-term needs.
I strongly advise you not to sell all of your inheritance. It’s important to reserve at least an acre of land for personal use, whether to build a home or keep it as a long-term asset to pass on to your children.
Selling 16 plots of land (2 acres) at Sh600,000 will fetch about Sh9.6 million, which is a significant amount. Here are some investment options you can consider with returns:
1. Agriculture
Set aside Sh500,000 to start farming on your remaining acre. You can explore dairy farming or specialty crops such as peppers, tomatoes or onions, depending on the climate and your experience. Hire an expert to guide you through the process.
2. Treasury bonds
He invested Sh3 million in three different issues of treasury bonds, each worth Sh1 million, at an annual interest rate of 17 percent. If you use a staggered approach – buying bonds in January, March and May – you could get six payments of Sh81,000 each year.
3. Money market fund
He invested Sh3 million in a money market fund at an interest rate of 12 percent per annum. This will give you approximately Sh30,000 per month.
4. Real estate investment
Buy a plot of land for Sh2 million and build two independent two bedroom units for Sh2 million each. These units can earn you a rental income of Sh60,000 per month, assuming the location is ideal.
If you calculate your expenses and estimate your monthly budget at about Sh50,000, the returns on bonds and money market fund will give you a surplus of about Sh20,000.
This amount can grow even larger if your farming business takes off. For example, dairy farms can generate more than Sh60,000 per month with proper management and experience.
At your age, you have the opportunity to expand your business ventures and generate a sustainable income. With fewer responsibilities now, this is the perfect time to start planning for the future. Focus on making informed decisions that will create lasting wealth.
If you have any financial problems, or if you would like advice on managing your money, please do not hesitate to contact us at (email protected).