John Mwai: I Regret Taking A Loan To Buy Land, Safaricom Cooperative Executive Shares

John Mwai is the Investment Manager at Safaricom Investment Co-operative.

Prior to joining Safaricom Investment Co-operative, Mwai was employed as a Development Manager in real estate.

The top executive is among Kenyans who opt to take loans to buy parcels of land, although he strongly discourages the move.

Buying the land

Despite getting the land, and the fact that it keeps appreciating as the days go by, it has remained idle ever since.

He noted that it would be better if the parcel of land would be generating some income to take care of the loan interest.

“I doubt the capital gains are higher than the interest I paid. The key lesson that I took away from this is that the opportunity cost of money should never be ignored,” Mwai said.

Mwai also endorsed the idea of investing instead of saving large sums of money.

“At any single point in time, I have a project that is running and I periodically commit funds towards it. It could range from subscribing to an online course that interests me to buying shares in a company

“What matters is that my money is never idle. Previously, I would accumulate money in a bank account, under the pretext of saving but would end up consuming it,” he added.

Building rural homes

As earlier reported on WoK, Kenya’s Ambassador to the Kingdom of Belgium Professor Bitange Ndemo discouraged the idea of building a rural home.

Ndemo is among Kenyans who have built homes in rural areas, a move that he discourages since most of these properties end up being a misplaced investments.

The former PS recalled how he invested Ksh 20 million in building a rural home only for him to visit the house only twice in 15 years.

He used his savings to buy a 10-acre piece of land in Kajiado County and used the rest of his savings to set up a house.

“My more than five years savings of Ksh 20 million went up in smoke. My saving grace was a ten-acre piece of land I bought in Kajiado. The rest was converted into dead capital in form of a small rural home,” Ndemo pointed out.

The associate professor wondered why someone would invest in a rural home, yet they are struggling to make ends meet in the city.

“Of what sense is it when someone puts up a Ksh 20million home in a rural area only for the relatives to raise money to pay school fees for children after his death?

“These are houses that no one will buy, sell or rent because graves dot the home.  What is the value of culture?” He posed.