Your attitude towards money, your spending mindset and how you manage your finances are critical to achieving your goals.
My name is Peris. I am 29. I have been working in the Gulf for the last five years. I have managed to save around Sh2 million in my Kenyan bank account. I am now tired of being away from home and I am not planning to renew my contract once it expires in August. I want to use my money to start a business in Kericho town and buy a plot of land where I can build rental houses. I also have a seven-year-old daughter who has been living with my parents and I want to secure her education. What type of business should I start? Before I left, I had been working at a local salon and I am wondering if I should start a salon and boutique business. How do I utilise this money to avoid misusing it? I have worked under very tough conditions to save this money and I want to use it well. I only have a Form Four certificate and so I may not be very employable in formal jobs. Please advise me because I am really fatigued from working in the Gulf.
Alex Kibebe is the founder of Rubiani Wealth Management Ltd and an investment consultant and business development coach
With your plan of returning to Kenya in August after your contract ends at the Gulf, you are now looking to manage your savings of Sh2 million in a way that secures both your financial stability and your daughter’s future.
You are considering starting a business, investing in rental housing, setting aside funds for your seven-year-old child’s education—all while adjusting to a life without a regular paycheck.
To make this transition successfully, you will need to carefully balance between financial safety, generating income and growing your wealth over time.
Your first priority should be to create a personal safety net. Once your job ends, you’ll no longer have the consistency of a monthly salary.
Therefore, before spending on projects, I would ask you to consider setting aside a modest amount—around Sh150,000—for your personal living expenses for the first four to six months.
This can cover food, transport, rent (if you are not planning to live with your mum) and other essentials while your business and rental ventures are still getting off the ground. This basic cushion will help reduce financial pressure and keep you from dipping into funds meant for longer-term plans.
With the immediate living costs accounted for, your next move should be to secure a low-risk financial buffer that can support your child’s education and provide fallback income in case your other ventures take time to mature. Set aside Sh400,000 to Sh600,000 for this purpose.
You can invest this in a Money Market Fund (MMF) or a long-term Infrastructure Bond.
An MMF is flexible—your funds remain accessible when needed, and you can earn an interest rate between eight per cent and 13 per cent per year depending on the fund manager you invest with.
Alternatively, you could consider a tax-free government Infrastructure Bond. These currently earn interest of around 14 per cent per year, paid out every six months.
For example, a Sh500,000 investment in such a bond would generate about Sh70,000 per year, or Sh35,000 every six months. This payout can cover school fees and emergencies without disrupting your business or real estate plans.
Once your buffer is in place, you can allocate the next portion of your savings to your long-term income goal – building rental housing.
Consider allocating between Sh800,000 and Sh1.2 million for this project. To achieve this goal, you can purchase a plot in the suburbs of Eldoret – places like Kiplombe, Kipkenyo or Yamumbi with a budget of Sh400,000–600,000.
With the remaining Sh400,000–600,000 in that real estate allocation, you can construct mabati (iron sheet) single rooms with shared toilets and bathrooms.
A 50x100 plot could fit between 10- 12 such units. Considering your budget, you could start with five such units while leaving space for future expansion.
Each unit could fetch approximately Sh2,500 per month in rent, generating about Sh12,500 monthly from the first phase. Once you complete all units over time, your total rent could grow to Sh25,000 – 30,000 per month.
After laying the foundation for rental income, you can now shift your focus to starting a business. Pursuing your idea of opening a salon and boutique makes sense, especially given your prior experience working in a local salon.
But while the opportunity is promising, business income isn’t guaranteed and if the salon doesn’t break even within a reasonable time, ongoing expenses like rent and utilities can quickly deplete your savings. To manage this risk, start lean with a budget of around Sh300,000 to Sh400,000.
From this budget, consider setting aside about Sh60,000 for six months’ rent - assuming a monthly rent of roughly Sh10,000. Allocate another Sh200,000 for essential equipment—salon chair, hair dryer, a nail station and initial stock if you plan to include a boutique section.
To keep your operating costs low in the early stages, bring in beauticians and stylists on a commission basis rather than salaries.
This is a common practice in the salon business. Also, set aside some budget for a business permit, signage, basic branding, and a small promotional budget to attract your first customers.
As your business grows, keep to your saving habit and consistently reinvest part of your profits—along with your rental income—into completing your real estate project, while gradually growing your emergency and child’s education fund.
With time, you could expand into additional real estate projects, purchase more bonds and steadily build a lasting wealth portfolio.
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
