I am in my mid-30s. I am married with three children. My wife operates a grocery kiosk in our neighbourhood. She makes between Sh5,000 and Sh9,000 net. I work in the private sector and have been earning Sh46,000 net.
Rent has been my biggest expense at close to Sh18,000. One month ago, I applied for a different position within my workplace and got it.
My pay has been bumped up to a net of Sh78,000. This has, however, become a source of conflict in our marriage.
I would like to maintain our lifestyle as it is and use the extra money to save and invest but my wife wants me to use the new money to move them up to a more decent neighbourhood and also change the schools our children go to.
The last time I tried to invest, I acquired shares in a ponzi scheme and ended up losing Sh60,000. My wife is still bitter about this loss and argues that I shouldn’t invest since I will only make losses. Am I being mean-spirited? What should I do?
Gertrude Njeri is an accountant and the founder of Financial Buddy Africa Ltd:
Joel, I don't think you are being mean-spirited. I actually think both you and your wife are responding to the same thing (a higher income) but seeing different priorities for what that income should accomplish.
I would actually suggest that you do not immediately move house or change schools, but also don't tell your wife that nothing should change. Instead, agree that the increase will serve three purposes: improve your family's life, build an emergency fund and create investments.
For example, you could initially divide the additional Sh32,000 into three parts. Put Sh15,000 towards saving and investing, Sh10,000 towards improving the family's lifestyle and keep Sh7,000 for a specific family goal, such as school expenses, moving costs or another priority you agree on together.
The important thing is that the lifestyle upgrade should be planned rather than allowing the entire salary increase to disappear into higher recurring expenses.
Before making either decision, calculate the total annual cost of the proposed upgrade. If moving to a better neighbourhood adds Sh10,000 to your monthly rent, that's Sh120,000 a year. If changing schools adds another Sh60,000 per child annually for three children, that's another Sh180,000. Suddenly, a Sh32,000 monthly salary increase has already been committed to a lifestyle that you may have to maintain for years.
On the other hand, investing the entire Sh32,000 and refusing to improve your family's life could create resentment. Money is also meant to improve your quality of life. You don't need to live exactly as you did when you earned Sh46,000 just because you now earn Sh78,000.
So perhaps the conversation with your wife shouldn't be, "Should we spend or invest?" It should be:
"How much of this additional income can we enjoy today while still making sure our future selves benefit from it?"
I'd also address the Sh60,000 loss directly, because I can understand why your wife is afraid. You did not lose the money because investing itself is a bad idea. You lost it because you put money into a Ponzi scheme. That distinction matters enormously.
There is no legitimate investment that can promise you that you will "not make losses." Shares can fall. Bonds have risks. Businesses fail. Even seemingly safe investments have some level of risk.
The goal isn't to find an investment where you can never lose money. The goal is to understand the risk you are taking, diversify appropriately and avoid fraudulent schemes.
This time, don't rush to invest simply because your salary has increased. Start by building an emergency fund in a regulated money market fund or another suitable low-risk, accessible savings vehicle. Once you have that foundation, you can gradually diversify into investments such as government securities, regulated collective investment schemes and shares, depending on your goals and risk tolerance.
And please don't put the entire Sh32,000 into one investment. Your previous experience should teach you the value of diversification, not convince you that investing doesn't work.
Your wife makes around Sh5,000–Sh9,000 net. Instead of viewing her income as simply household money, consider whether part of the family's financial plan could involve helping that business grow. But be careful here too. Don't simply pour money into the business without knowing its numbers. Your wife should know how much she sells, how much she spends restocking, how much gets lost through spoilage and what she actually takes home as profit.
If your family was surviving on Sh46,000 plus your wife's income before, you don't necessarily need to immediately increase your lifestyle by Sh32,000 every month. You can allow your lifestyle to improve gradually while directing a significant portion of the increase towards assets.
For example, if you invested Sh15,000 every month and achieved an average long-term return of 10 per cent annually, you could have contributed Sh1.8 million over 10 years and potentially accumulated around Sh3.1 million, assuming the returns compounded and were reinvested. That's an illustration, not a guaranteed return. The actual result could be higher or lower.
Imagine if every time your salary increases, you increase your investment contribution rather than allowing your expenses to rise by the same amount. Your Sh15,000 monthly investment could eventually become Sh20,000, then Sh30,000. That is how a salary increase becomes wealth, rather than simply becoming a more expensive lifestyle.
I would also suggest that you and your wife agree on a rule for major financial decisions. It isn't Joel versus his wife. It becomes the two of you deciding what your family's money should accomplish.
And perhaps most importantly, don't try to prove to your wife that you were right about investing. She is reacting to a real Sh60,000 loss. Instead, show her that you've learned from it.
Tell her, "I understand why you are afraid after what happened. I don't want to repeat that mistake either. This time, let's agree on regulated investments, understand what we're buying and diversify rather than putting our money into something we don't understand."
That is a much healthier conversation than trying to convince her that investing is always profitable.
