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I have received my inheritance cut, which includes five acres of land in Elburgon and Sh3 million in liquid cash.
I work in the civil service. I am turning 42 next month. Unfortunately, I lost my parents to a fatal road accident 10years ago and since then, my siblings, step-siblings, and I have been embroiled in a bitter inheritance court battle.
We finally got a ruling last year and I got my cut which includes five acres of land in Elburgon and Sh3 million in liquid cash.
I am divorced and have three children. One is in Form Four, the second born joined Junior Secondary in January, and the third born is in Grade five. My household budget comes to around Sh30,000 per month. My net salary is about Sh48,000.
Out of my inheritance money, I have used Sh600,000 to pay off various debts that I had incurred overtime. I am now debt free. I have also used Sh200,000 to buy some electronics and refurbish our furniture. Now I am alarmed that the money is running out too fast.
How do I use the money left to secure our future, create passive income and start utilizing the three acres I inherited?
Should I sell them and buy a plot in the Nairobi metropolitan areas where I currently work or should I seek a transfer to Molo and start a quiet life upcountry?
- Grace
Alex Kibebe is the founder of Rubiani Wealth Management Ltd and an investment consultant and business development coach.
Your decision to clear your debts was a good one. It has freed up income that was previously going into loan repayments and as a result, you now have a monthly surplus of about Sh18,000 – based on what your disclosed disposable income.
I would advise you to save this surplus consistently in a Money Market Fund and, or in a reputable Sacco. For example, you may save Sh10,000 in a professionally run, licensed and reputable Sacco, and Sh8,000 in a reputable MMF earning a return of about 10 percent per year at current rates.
Over time, these diversified savings will build into a reliable financial reserve that you can draw on for your short-term goals without interfering with your long-term financial plan.
From the total of Sh3 million that you inherited, you have used about Sh800,000, leaving you with a balance of about Sh2.2 million. Since you have already done some living upgrades, I would urge you not to incur any further lifestyle expenses and instead focus on preserving and investing your balance.
To ease off the pressure of school fees, you may set Sh200,000 in a second reputable money market fund. This will not only preserve your money but will also earn you compounded interest while providing easy access when fees fall due.
With the balance of Sh2 million remaining from your inheritance, your first priority should be to convert it into predictable, low-risk passive income.
One of the most suitable options is a government Treasury bond. A Treasury bond is a long-term loan you give to the Government, and in return, you receive interest at a fixed rate every six months.
At current rates of about 12 percent per annum net, an investment of Sh2 million will generate roughly Sh120,000 every six months. I would advise you to invest in a longer-term bond, such as 15 to 20 years. This will give you consistent income over the period while still retaining your full capital.
You can use this interest earned to support school fees, ease monthly pressure and cover irregular expenses such as holidays or emergencies. You can invest in Treasury bonds by opening a Central Bank CDS account online or by investing through your bank.
This Treasury bond investment will provide a steady source of passive income and help reduce the risk of falling back into debt.
The next part of your plan is how to approach the land. If the land is suitable for farming, leasing it to a local farmer is often the simplest way to generate income without operational stress. You could also consider farming it yourself. This can be more profitable but managing it remotely from Nairobi is difficult and often leads to losses - unless you have a reliable structure on the ground.
You may also consider selling a portion—say one acre—to unlock capital, while retaining the rest for future development. If viable, you can use part of the proceeds to build simple rental units or invest in more commercial agribusiness, provided you have the right support on the ground to create a reliable income stream.
As for your options of either investing in land around Nairobi or seeking a transfer to Molo, this decision should be guided by income and practicality. Buying land in the Nairobi metropolitan area may offer better short to medium term benefits especially if your work and income remain based there.
On the other hand, seeking a transfer to Molo and settling on your land would work well, but it should be approached gradually. Your land is in a location that can do well with value-added farming. However, relocating before you have established your investments could create financial pressure, even if your salary continues.
A more stable approach is to first establish reliable income streams—through the bond and from the land, then consider relocation once you have sufficient cash flow and your children are at less critical stages of schooling. You also don’t want to relocate and start setting up your farm using debts.
If you are to relocate, have a phased strategy that shall address the critical areas of making such a move – where will you live? Will you build your own semi-permanent house or rent in Molo town? What will be the actual relocation budget?
By saving your monthly surplus consistently, investing your inheritance in a Treasury bond, and gradually unlocking income from your land, you will build a stable and reliable financial foundation.
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