Skip to main content

How Much Is Enough? I think I figured it out.....................

I recently faced a situation that I have faced multiple times, getting vindicated for my integirty while those who chose a different path finding themselves on the wrong side. I have worked in the industry I am in for almost 16 years now and during that time I have seen colleagues get rich through dubious means. My time in this iindustryhas made me aware of ways in which this is possibe but I have always questioned on whether it is worth it. Guys getting kick backs or outright theft looks attractive in the moment but at the end of the day you always get caught and find yourself in a worse of position than before.

We see the same thing in our politicians and even though theirs is the making oofa kleptocracy we always ask ourselves, How much is really enough?

I think I may have found out how much in my perspective may be enough.

KES. 300 MILLION

Hear me out on this, if you were to have a windfall or accumulate wealth in a short time i personally believe that amount would serve my family and i for the rest of my days and have enough for my children to have a head start in life.

In any situation where large amounts of money are involved you need to remember that the first thing you will do is go mad.
I have somewhat calculated that in;

So I decided to have a conversation with Chat GPT and this is what it came up with.

Basic asumption is that you will spend 100 Million on immediate needs and 200 million will be invested for the future.

Investment Plan Based on Kes. 300 Million Windfall

Initial Windfall Allocation:

  • Total Windfall: KES 300 million
  • Allocated for Investments: KES 200 million
    • Earns 10% annual interest
    • Half of the interest (5%) is reinvested
    • The other half (5%) is used for monthly expenses . This is what you would us to replace your monthlyincome to ensure you never have to work again.
  • Other Allocations: this is where you go mad, buy a house and other things you think you need.
    • KES 10 million – Debt repayment & family gifts
    • KES 50 million – Real estate investments
    • KES 20 million – Farming projects
    • KES. 20 Million  -  going mad on a buying spree(cars, clothes, holidayes etc.)

Investment Growth Calculation:

Given the KES 200 million investment at 10% annual interest, with 50% reinvested and 50% withdrawn for expenses, the effective growth rate will be 5% compounded annually.

Formula for compound interest:

Where:

  • = future value
  • = initial principal (KES 200 million)
  • = reinvested interest rate (5% or 0.05)
  • = 50 years

Future Value: ~KES 2.29 billion in 50 years.

Monthly Withdrawal Calculation:

Monthly income for expenses: ~KES 833,333

Real Estate Investment Breakdown:

  • KES 30 million – Allocated for a primary residence (non-revenue generating).
  • KES 20 million – Land purchase for future investment.

Rental Development & Land Acquisition Strategy:

  • 40% of monthly income (KES 833,333) = KES 333,333 per month, or KES 4 million per year, directed to:
    • Constructing rentals on acquired land.
    • Buying smaller parcels of land when opportunities arise.

Growth Projections:

1. Rental Development Over 50 Years:

Assuming construction and rental income reinvestment at an average growth rate of 8% per year, and an annual contribution of KES 4 million, the formula used:

Estimated Future Value of Rental Portfolio: ~KES 3.21 billion

2. Land Appreciation Over 50 Years:

Assuming land appreciates at an annual rate of 5%, using the formula:

Estimated Future Value of Land Holdings: ~KES 229 million

Total Future Value (Real Estate + Land Holdings):

Summary of Real Estate Plan in 50 Years:

  1. Primary Residence: Static at KES 30 million (unless upgraded).
  2. Land Holdings: Expected to grow to ~KES 229 million.
  3. Rental Portfolio: Potential value of ~KES 3.21 billion.
  4. Total Real Estate Wealth Estimate: ~KES 3.44 billion, assuming reinvestment of 40% monthly income and an 8% return.

Conclusion:

This plan balances immediate financial needs, mid-term development goals, and long-term wealth creation, ensuring financial security and growth over the next 50 years.


So all factors constant after 50 years, based on my investment plan:

  • Cash investments (interest-bearing account): KES 2.29 billion
  • Real estate investments (initial investment + monthly savings): KES 8.14 billion
  • Total investment value (cash + real estate): KES 10.43 billion


But humans are not that patient or selfless to want to just put in a good days work and build a future. 
They want to plunder until the teat is dry and the cow is emanciated. my daydreams are just mine but I hope one day I may be able to apply the math.




Comments

Post a Comment

Popular posts from this blog

Always looking out for number 1

I just got a new job that is sales in nature , my previous job was an I.T. position which gave me a chance to compare the differences between humans and machines. A machine is supposed to be predictable ,with a particular set of inputs you get a particular set of outputs. A human is supposed to be unpredictable where one group wants to go left there is this guy who always wants to go right. However, I realized that machines can be at some point unpredictable while the humans vice versa. A human will be predictable in that every little situation you bring to him will only flow with your idea if and only if it is of some benefit to them. That brings me to the basis of this topic today, number in is you and your immediate interests and issues if importance. With that being said, I would love to burst the bubbles of certain individuals who seem to rely too much on other people. If you are an adult and probably approaching middle age, you are of three different levels of life : accomplis...
3 comments
Read more

She ain't going nowhere.....

Loneliness has always been a a friend of mine, way back when my thoughts were my own and very few people knew of my very existence.  Today the loneliness is back and it's back with a vengeance. "So what you upto tonight?" Asked John knocking me out of my deep thoughts. "Nothing much , got some writing to do and the words are at my finger tips and I don't want to lose them." I replied. John has always wanted the best for me, sort of like the big brother I never had. He opened up his doors to me this time when Mary threw me out for the first time. Who is Mary you ask. Where to start about Mary, well she was my first love and the first person who knew me behind the curtain I raised for most people. What did I do to get kicked out...  "STOP DAYDREAMING DUDE!!!" John screamed while shaking me. I hadn't noticed I had just wondered off. "Okay Bro,  since you are determined to stray my thoughts what do you have in mind?" I said hoping he...
2 comments
Read more

Nairobians and their class differences.....

So I like wearing power branded shoes sold by bata, some like weinbreinners and there are people who u really don't understand that wear sketchers. This is the most basic way of describing the different levels that we have in Nairobi, by levels I mean classes. There are those who treat crocs like something you wear around the yard while others may have it as a Sunday best. Don' t ask me if i have actually seen this but I'm sure it happens regularly.  Class isn't a new thing , from the aristocracy all the way to the caste system in India the classes have been clearly defined for millennia. I have a personal theory about this, with such a large population and there being such a powerful hunger to survive, people decided to try and define their difference between themselves and the others. When we first existed, the human race had such a low population that we required each other to survive. People may have existed like the bushmen of south africa where there were units of...
1 comment
Read more