Missed investments, bad bets: The biggest money mistakes that still haunt Kenyan CEOs

Peter Mwangi, the Kenyan country manager at Yellow Card, says his most defining financial mistake came from moving too fast without a proper understanding.

“The biggest mistake was investing in something that I didn’t understand. I didn’t understand the rate of return, the payback period, or the regulations around it. I did it because people were pushing,” he says.

He recalls the early days of Bitcoin.

“At that point, Bitcoin fell about 70 percent of its value. They called it the crypto winter. It was terrible because I’d put a lot of my money in it. After spending a lot of time understanding the industry and the problem it solved, I was quite sure this was it. I thought this was what was going to help me make the next step,” he says.

It did not, at least not immediately.

“I had to wait for nearly four years just to break even, and then it was two years later that the payback was very good.”

Mr Mwangi says becoming a CEO did not change his attitude toward money in the way many imagine. It did not push him toward luxury or excesses. Instead, it deepened his sense of responsibility, especially toward family.

“The best financial decision I’ve ever made has been investing in my parents. When I look back, the best money spend I did was for my parents, giving them money, and building something for them,” he says.

While some see family as a financial burden, Mr Mwangi sees it as his most meaningful asset.

“People think it’s wrong because everyone asks for something, but that would be the best investment you will ever make in your parents, in your siblings, and even your extended family, if you can,” he adds.

Of all the financial lessons Mr Mwangi has faced, none has been more humbling or more eye-opening than inflation.

“I used to believe in saving money. I would put money in a savings account for as long as possible. It’s good, the money grows, but then inflation happens, and you find that whatever you were saving for, your money is not sufficient anymore.”

The realisation changed his entire approach to wealth creation. “A million, two million, three million shillings five years ago is not the same amount of money today. The moment I figured that out, my life changed.”

Now, he watches every exchange rates, property prices, international markets and national policy decisions with attention and discipline.

“That’s why I read the newspapers every single day to understand what decisions are being made at a national level and how they impact me. Because I know they definitely impact me,” he says.

Mr Mwangi warns that many people look at returns, but forget the erosion. “They think: how much will I get? How do I avoid losing money? But they never look at how inflation will impact them. They don’t understand what an inflation of five percent really means, but it has a massive impact on your pocket.”

What has strengthened his resilience around money?

“Looking for mentors has had the biggest impact on my life. A mentor can help you figure out in one day what would take you 10 years to learn.”

He adds that mentorship shortened his learning curve and changed his thinking around tools he might never have understood on his own.

What advice does he offer young leaders? “The most important role, especially for young people, is to take care of your parents, which will always pay back. Another thing is that you must always save at least 10 percent of your income. Never go below that. Another thing is to invest in things that you understand, take time to learn it because they have the biggest payback period. Finally, learn about inflation and how that impacts you. It informs some of the decisions that you need to make in your life.”

‘Be compassionate with brains’

Before Elizabeth Irungu became CEO of Absa Asset Management, she was like many young professionals who are eager to invest, hungry to grow, and mostly not always aware of the traps that come with financial enthusiasm.

“My biggest mistake was investing without doing full due diligence. I overlooked due diligence on an investment, and then it went bust,” Ms Irungu says.

“That was 15 years ago, I invested Sh250,000. It was almost my entire savings. After trusting a friend and failing to do my diligence, I lost the money,” she says.

Leadership, Ms Irungu says, brings visibility, and visibility brings pressure. But all these for her have created a personal system that she became intentional about, which then made her finances stable.

Her first rule is one she insists on.

“I automate my savings first, just automate and let it go straight out before even making the next move with the money, because that’s the first gain that you get.”

Only after saving does she make investment decisions. Then she plans.

“Planning on what projects you have every year or in a season and following through. I love finishing my projects.”

Her current approach?

“I do my personal financial planning with my family. I’m not doing money matters alone; I’m doing it with my spouse and with my children. They know everything we are doing. They might not contribute in terms of money, but in terms of direction, we are all headed in one direction. I learned to practice the things that I teach,” Ms Irungu says.

Unlike her children, she did not grow up with structured financial training. “I’m just lucky and blessed that I got into the investment world and learned a lot of thing.”

What money habit did she have to unlearn? “I have unlearned black tax, that I can't save the world. I'm not the saviour, unlearning that I don't have to have guilt over my head if I cannot cover black tax. I have to budget black tax instead of being emotional,’’ she says.

“Even to my own relatives, I will say no, because sometimes it calls for that discipline. Otherwise, you'll be working for others forever. But I still want to be compassionate. I wish I could do it differently, but sometimes you're taken advantage of,” she adds.

Any money lesson advice?

“Money should not get into your head. How to spend it is very important because it spins the head into different directions. You must sober up and not let it dictate how you do. There are also many people who can plan for your money, especially when you are in high leadership.”

The cost of playing it too safe

For Knight Frank Kenya CEO Mark Dunford, his financial conservatism was born early. He remembers saving holiday earnings from selling macadamia. This was from his father’s lesson to avoid debt and build by earning your own way.

“It was important not to borrow money and to earn your own money as much as possible,” he says.

That discipline, he says, has shielded him from major losses later, but it also came with an unspoken cost of an opportunity missed.
When he first worked in London, his father urged him to invest in a small piece of real estate.

“The market was affordable, and interest rates were low. My dad urged me to invest in a small piece of real estate, even a studio apartment, but I didn’t do it. If I had, I could have retired by now. There are people I know who took opportunities that I didn’t and have done much better than I have in certain ways. Fortunately, I didn’t lose a lot of money, but I didn’t make a lot either.”

His lesson? Wealth is not only about caution; sometimes it is about calculated courage.

“Be brave enough to take risks not with all your money, but with a portion that you are willing to invest,” Mr Dunford says.

As the real estate CEO moved into senior leadership, his view of money became less personal and more of being ethical.

“I like to think I have a good moral compass. There needs to be a tradeoff between the business and the employee. It must be a win-win. You can’t have a business that takes all the money while the employee gets nothing but works hard.”

This has made him promote systems that ease employees’ financial pressure while encouraging saving and discipline.

One of his guiding philosophies comes from Simon Sinek’s book Leaders Eat Last, the idea that a leader should be the last to reward themselves, and the first to give back.

“There is a responsibility that comes with increased wealth,” he says. “Remain humble, remain empathetic. Be careful who you give money to, but make sure you give back.”

But generosity, he adds, must come with wisdom. “If you’re investing in your children, your nieces or nephews, you are giving. You’re not doing it for your own return. It’s for their future, not yours.”

His advice? “Don’t overpromise those around you, just help where you can. A lot of people, especially relatives, once they know that you are a big shot, they instantly think that their problems are over. You will kill that golden goose if you go try and squeeze every last egg out of it.”

“Money is very fluid”

Before the title and the confidence that comes with experience, Flora Mutahi, CEO of Melvin Marsh International, was an entrepreneur trying to make something out of nothing. Like many founders, her earliest financial lessons came wrapped in sacrifice.

“The biggest one, being an entrepreneur, I never had enough money. I was so committed to my goal that I just kept pumping anything and everything back into the business, almost not giving myself a salary.” Ms Mutahi says.

She says that back then, not paying herself felt very necessary. “I keep telling people when you’re starting a business, try and remember to pay yourself as you’re paying other people.”

However, Ms Mutahi doesn’t regret that sacrifice because she needed it to push through the early business challenges. “Make sure you pay yourself and try and do it at market rate, because that’s another thing we never tend to do.”

Did she ever come close to bankruptcy? “No! However, you tend to remind yourself of a lot of things constantly.”

She has seen many entrepreneurs hide behind the ‘I don’t have time’ excuse. “A lot of business people hide behind 'building their businesses'. But your business is not your life at the end of the day,” Ms Mutahi says.

Becoming a CEO has also changed her relationship with money over the years. “Because of bootstrapping, you’re used to just going for the cheaper option. As you get more established, you start realising that cheap is expensive. You start going more for value, more quality because it will last.” Ms Mutahi says.

“So you also take that approach and start investing for the long-term. I’m investing for my children’s education, for medical, because I don’t want to see them suffer later in life, like you with other people around,” she adds.

And always, always think ahead…..

“Don’t let college fees spring up on you. Don’t let parents’ medical issues spring up on you. Don’t let retirement spring up on you,” she says.

She adds, “Money is very fluid. It can pass through your hands in a couple of years, and then you’re asked, ‘What did you do with it?’ and you don’t know. Invest wisely. Investments go bad, but keep your ear to the ground. Find out what’s going on, what’s working, what’s not working,” she says.

And perhaps the most fitting line for any CEO, “Take some risks because being a CEO, you’re already a risk taker.”

Courage to start and the wisdom to slow down

Yussuf Didow, CEO of Transnep Insurance Brokerage, does not romanticise entrepreneurship. For him, business has never been about waiting for a perfect moment, a perfect plan or a perfect amount of capital. Instead, he credits it to action and mistakes.

He believes that progress begins with what you already have. “There’s no perfect timing to start any entrepreneurship venture. You start, you learn as you go, and mistakes will always be there.”

Before building his most recent and successful venture, Mr Didow had already started and learned from six companies.

One of the biggest financial mistakes he acknowledges was over-borrowing in a rush to expand.

“I tried to build the organisation too quickly, and I wanted to invest because it was in demand. We grew in terms of having more people, in terms of logistics, adding one or two more trucks, which brought a lot of challenges, and it cost us,” he says.

Instead of borrowing strengthening the company, it weakened it.

“You grow when there’s a need for you to hire more people. Let the business be the one to demand. It's not you saying, I want to have six or seven people, because you are predicting growth. First have the growth, then the business will be the one to demand for you to hire, because you will have enough revenue to be able to take care of that first.”

Mr Didow says that many aspiring entrepreneurs delay their dreams because they are waiting for ideal conditions. “If you are waiting for a perfect time, or the perfect amount of money, that day will never come,” he says.

Another key lesson in Mr Didow’s financial evolution was recognising the importance of expert guidance.

He learned to seek support from professionals who understand industries, risk and strategy rather than relying only on his instinct,
“There are consultants and professionals who are able to guide you through. Trust the professionals, they will give you the right direction instead of you investing in the wrong industry or putting your money where it’s not worth it.”

Beyond money, Mr Didow believes that success comes from understanding your purpose.

“You have to look at your passion and your area of expertise, because everybody has a need. There are consultants who are able, and definitely there are people who are able to guide you through.”

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