With a Ksh70K Net Salary, How Do I Invest Well Enough to be a Homeowner at 33?

‍“I'm 27, single, and earn Ksh70,000 monthly in net salary. I save Ksh15,000 in an MMF but don’t have a long-term plan. How do I start preparing for financial independence or a big purchase like building my home before I turn 33? I plan on getting married after I have built my own house.“ Joan, Langata.

Since you’re planning to save for a big purchase like a home, you’ll want to balance safety and growth in your investments:

Short-term goals (1-3 years):

• Continue contributing to your MMF, which is a good option for liquid savings with low risk. You could now increase your MMF from the 15k to around 20k
• Consider allocating 10-20% of your income into higher-yield investments, like stock market funds or ETFs which have potential for higher returns over time. Nowadays you can invest even in international stocks that have a higher volatility and growth.

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Medium-term goals (3-5 years):

• Bonds or fixed-income investments: If you’re risk-averse, you can diversify your portfolio with bonds or other stable investments that provide a steady income while preserving capital.

Long-term goals (5+ years):

• Stock investments: For the longer-term (5 years and beyond), stocks could give you the best return on investment. Dividend-paying stocks can also provide additional income.

Also investing in assets aligned to your home ownership goal like REITS could make your dream more realistic and achievable.

Read Also: With a Ksh3 Million Retirement Package, Where Do I Invest? I Don’t Want Anything Stressful

Practical Examples

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• Automate your savings and investments: Set up automatic transfers into your savings and investment accounts. This way, you don’t have to think about it and are consistently building wealth.
• Track your expenses: Keep track of your spending to ensure you’re living within your means and can save more for your goals.
• Increase your income: Look for ways to increase your income, whether through side hustles, career advancement, or investments that generate passive income.

These steps will increase your discipline to follow your goal through since you can easily be distracted as it is long term

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