Donna’s Coin Confession : Investment Edition

Donna’s Coin Confession : Investment Edition

Welcome to The Coin Confession! We are demystifying how people spend and invest their money by asking everyday people to share their journeys and habits.

Today: Donna shares her investment portfolio. She shares stories behind her investments and leaves us with some great advice. 


Name: Donna


Current Age: 35


Age you started investing: 2015 (29 years old)


Gross Salary: Ksh. 180,000 – Ksh. 220,000 (USD 1,800 - USD 2,200) 


Deductions: 


Deductions 

Amount (KES)

Amount (USD)

SACCO loan repayment 

Ksh. 25,000

USD 250

SACCO investment

Ksh. 3,000

USD 30 

Investment group loan repayment

Ksh. 25,000 

USD 250

Investment group deposit

Ksh. 10,000 

USD 100

Savings since starting to WFH

Ksh. 10,000 

USD 100


Tithe 

(10% of gross salary)

Ksh. 18,000 - Ksh. 22,000 


USD 180 - USD 220 

Mandatory pension 

(10% of gross salary)

Ksh. 18,000 - Ksh. 22,000 

USD 180 - USD 220

Black tax: 

Money I spent supporting my family e.g. parent’s electric bills, money for my siblings school supplies etc.

Ksh. 15,000 

USD 150


Net salary: Ksh. 70,000 – Ksh. 90,000 (USD 7,000 - USD 9,000) 

Monthly expenses:

I first pay the standard house related expenses (rent, cleaning, internet, etc.) This costs Ksh. 35,000 (USD 350).

Then I balance out the rest of the remaining money in these ‘buckets’ that I limit myself to, or rebalance where needed: 




Bucket

Amount (KES)

Amount (USD)

Shopping 

Ksh. 10,000

USD 100

Food

Ksh. 10,00

USD 100

Fuel + all transport

Ksh. 15,000

USD 150

Entertainment + gifts

Ksh. 10,000

USD 100

Me- for personal indulgence that month

Up to Ksh. 10,000

Up to USD 100

Total monthly expenses

Ksh. 80,000

USD 800


Amount invested to date: Ksh. 4,000,000 – Ksh. 4,500,000 (USD 40,000 - USD 45,000)

I allocate between Ksh. 30,000 – Ksh. 33,000 (USD 300 - USD 330) per month to invest.


Savings and Credit Cooperative Organization (SACCO): My first investment was in 2015. The organization where I previously worked was either approached by the SACCO or they approached the SACCO, but the organization called us to a meeting and encouraged us to join the SACCO as a team. So, my employer would remit to the SACCO monthly on our behalf. 

I started with Ksh. 3,000 (USD 300)  (well I’m now at Ksh. 30,000 ( USD 300)) but over the past 5 years the amount has varied depending on the pay I was receiving and other competing needs. Sometimes I’d not remit because there were periods where I was unemployed (I am a consultant, so contracts are my bread and butter). 

I’m super grateful to have joined the SACCO because I have taken two loans. Currently paying a massive loan to pay for my 4th investment. 

(I see you scrolling down to see what that is 😊. Just come back and read the rest.) 

Lately, they have become stricter with dividends (or is it rebates?)… Such that if you’re not consistently depositing and if you do not have a certain total amount at the end of the year, you do not get any payout. This sucks in the moment but also makes you stay consistent and save more; at the end of it all, it’s for your benefit. 

The other thing to note are the loans. The first loan I took didn’t have any pressure to keep up to the monthly payments. But this second loan, let’s just say I’ve received 3 warning emails already to regularize my payments! You must stick to the agreed upon repayment plan. Maybe this is because there have been a lot of defaulters and perhaps COVID made the situation worse. They ain’t playing! I don’t want my guarantor to get grief, so I regularized the account and I’m now back on the straight and narrow path 😃

Also, if you have people who have guaranteed you, please pay the loan at the very least for their sake. I have a few friends that I know who’ve had their deposits cut to recover the defaulted loan. If you’re unable to pay, let your guarantors know and make a payment plan together. Ignoring their calls or changing numbers or going underground is lame and juvenile. Liam Neeson will find you.... Just be a good human!

Note from AP: We also advise that, in addition to not screwing your guarantors over, you  should generally keep up with loan agreement terms. Some lenders may be forgiving, but more often than not late payments come with additional interest and hefty penalties that can leave you drowning in debt. Our course Navigating Debt helps you figure out how to manage debt you already have and how to assess debt before you take it, so you don’t get caught in the trap. If you are interested, please join the waiting list here. 

For those struggling with consumer debt e.g. mobile money loans, ‘buy now, pay later’ type of loans, we have a free guide to getting rid of bad debt that can help you along your journey to paying off your bad debt. 


Investment group with my friends: My second investment is with a group of friends- at one point we used to go to the same church. A friend, who has experience managing finances for other friend groups, brought us together. The members of the group she started managing money for now have their own families and great careers, but still invest together. 

This began mid 2016 and we are doing well. We give loans to each other and that earns us interest, so it’s sustainable (not like a merry-go-round). We contribute Ksh. 10,000 every month and meet every month. We’ve been keeping our cash in money markets, so it earns some interest too. 

We were once brazen and invested in forex through a ‘broker’,  because we didn’t really know what we were doing, it went south, lol! The individual that was investing on our behalf was threatened.. I mean compelled 👀since we knew some buttons to press and he eventually recovered our capital. 

Now we are looking for other investment opportunities, holla with your ideas 😊 

I really appreciate this investment because it’s what I used to pay for my parents’ medical insurance and mine too. And then I pay it back slowly over the rest of our financial year. 


Money Market Funds: I have invested in money markets since 2017. All I can say is go open a money market fund. The risk of losing your money is low and if you’re contributing substantially, the monthly returns are great. I have a friend who gets Ksh. 70 or 80,000 (USD 700-800) every month in interest . And remember this is compounding. 🤯 🤩


An apartment: My final investment is an apartment that I purchased in 2019 through a sacco loan. 

The backstory to this investment is that one of my friends has a financial advisor who helps women chamas (investment group) pro bono. She introduced him to me and I asked if he could advise me as an individual. He agreed! Through his advice, I was able to push myself, tighten spending loopholes, and add to my SACCO deposits (which I wasn’t taking seriously). That’s how I was able to build up my SACCO deposits so that I could borrow enough to top up the cash I already had (about 40%) and purchase an apartment! 


Investing in my financial literacy: Finally, taking Africa’s Pocket’s – Roadmap to Wealth Course was a confirmation of what I have been doing for the past 5 years and that I’m on the right track. My key takeaway from the course was that I need to diversify my sources of income, so that I’m not at the mercy of contracts & can stabilize my overall income. To find out how Africa’s Pocket handled this, take the course or any other course that is relevant to where you are in your financial journey. 


Any advice you would give a new investor?


Notice how I’ve talked a lot about my friends. Through them, I began three of my investments. It’s cliché but it is true, your net worth is highly a function of your network. Do some introspection on those you have around you. Do they challenge you to be better? Do they call you out on your BS? Do you have depth to your conversations? More importantly are you such a person to those around you? Iron sharpens iron.


Inspired to start building your investment portfolio? 

Download our free investing blueprint to get a step-by-step guide to  investing with confidence. 


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