Personal Finance

Njeri Jomo: A corporate insider on insights about money, risks, habits and investments

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Njeri Jomo, chief executive officer, Jubilee Health Insurance, during the interview at her office. PHOTO | DIANA NGILA | NMG

The panoramic view from her office takes Njeri Jomo, chief executive at Jubilee Health Insurance, more than 80 years back, but also to her present circumstances.

The cityscape is not only reminiscent of the Nairobi of old and the genesis of Jubilee Insurance nearly a century ago but the weight on her shoulders as well.

Njeri was appointed to the role a month ago and will manage a team of 250 as the head of the insurance business. It is a daunting job considering the heritage she will be seeking to build onto.

But then she is a corporate insider with experience spanning more than 20 years in financial services.

“If I had worked for an ad agency, for instance, that would have influenced me differently. I derive deep satisfaction from a reasonable level of structure. Financial services require a certain level of predictability. This setting requires a certain kind of me.”

Does it ever get boring doing the same things over and over? Njeri does not think so.

“As organisations grow bigger and bigger, it is easy to lose sight of who you are and the sight of things that keep you as one. It is always important to keep at the top of your mind who you are. What will be required of me? What decisions must I make? It is not a short-term responsibility.”

Njeri began to learn about money early on, including habits, investments, and risks and has been both a student and teacher of money. She says she is fortunate “to have walked right into it”.

“It is thrilling to understand money. You never get to understand it completely, so it is an [endless learning curve]. You can determine what a good investment with ease is by just listening to people.

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Money has influenced how I interact with it. How you behave with Sh10,000 is the same way you will behave with one million,” she says.

What financial constraints has she had to battle? Njeri says while she has not been retrenched, she has had to take a pay cut on two occasions for a career move she was making.

“Every time resources are constrained, there is always the tendency to adjust your expenditure. I was so deliberate to account for almost every shilling. I was already married with children and I had made certain commitments.”

On leadership, she says it is easy for leaders to consider themselves more intelligent than their team.

“Our success as leaders lies in our ability to bring out the best in our teams. Managing this key resource, and helping them see the vision, is critical.”

She adds that a team, which is passionate about the business, will always bring their A-game and intelligence to work. “My job as a leader, therefore, is to be an enabler because people will always deliver the results.”

Virtually all social problems stem from money, she observes, insisting on why people with an income should obsess over preserving their wealth.

“Interrogate your relationship with money. All you need to do is price things in small amounts. Some people have no respect for money. This explains the [gambling addiction] among poor people. Wealthy people place a lot of value on their money. That is why they do not give it easily,” argues Njeri.

Every penny counts

By dividing one’s monthly payment by the number of days one works, she says people start to realise how little they earn and spend every penny with care.

“From social media to street vendors and other advertisers, everyone else is planning for your money. Do not be the only one who is not planning for it.”

How does she plan for her money? Is she impressionable? “You just need to show me the right things. I can be a spendthrift. Do not discuss shoes and clothes. What I do is plan for everything. At the end of the day, life should not be punishing.”

She is teaching her three children about money, but foremost, about work ethic.

“No matter how smart you are without a work ethic, you will never work hard for what you want. The same discipline applies to money. I teach them not to be entitled. And that there is a process. One must earn what they get.”

Motherhood, she says, is an exam that one does without knowing what the outcome will be. “I hope they are learning and that will be better. Sometimes I give them money and ask them to buy lunch [for the family] to see what decisions they will make.”

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Njeri Jomo, chief executive officer, Jubilee Health Insurance, during the interview at her office. PHOTO | DIANA NGILA | NMG

Financial planning, she says, entails determining one’s income and its sources, having an emergency fund, investment, health and consolidation of wealth.

Budgeting is the first step to financial freedom, she says, warning that having a budget alone is not enough.

“Where is your money going? There is a difference between how you spend your money and how you think you are spending it.”

Tedious as it may be, she notes that it is imperative to record every little expense made for 30 days.

“You then classify the expenses into three categories. Expendables are things you can do without. Adjustables are things you can adjust and basic things you cannot do without,” she says, adding that having an accountability partner is important.

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To prepare adequately for unforeseen eventualities, she says an emergency fund should be between three and six times one’s monthly expenses.

“It stops you from getting frantic because life does happen. To build it you must be deliberate. You also put it in a place you cannot access on an instance such as a money market fund.”

Health comes next. In Kenya, one is considered a hospital bill away from absolute bankruptcy.

“There is a cliché that your health is your wealth. I do not think we understand how serious this is,” she says, noting that the majority of Kenyans are concerned about curative health at the expense of preventive health.

“We need to begin managing our lifestyle issues early. This way, we do not have to get to the stage where we are unwell. There is a strong correlation between obesity and lifestyle diseases later in life, for instance.”

Some hospitals, she says, demand an average of Sh500,000 from patients without health insurance.

“It is a matter of life and death. You cannot walk around without knowing how that will be taken care of if it ever happened.”

To her, the discussion on investments is out of the question for people without health insurance.

“You must start to take care of the most important component of your wealth creation journey. Yourself. People tend to jump into investments and buy, say, land. But you end up selling the asset at a loss when you are hospitalised.”

She laments that insurance is not “a very well-understood concept” despite its ‘’impact on how we can grow in terms of investments”.

Age and risk appetite determine one’s ideal investment options. “When you are younger, you have the time to buy shares in the stock market that can reach maturity. When you are older, you cannot do this. Lenders do not want to associate much with you.”

She admits that the “black tax” is an important conversation that the country must have. “Help out your folks but have balance and boundaries. Young people are creating their foundation and building their dreams now. Do you want to fend for your family or to send school fees to your siblings?”

She says those working now should build a solid financial future to avoid creating the same situation for their children. “We tend to live with the assumption that things will always come together. If you do not plan, it will not happen. If you do not plan for the biggest holiday of your life with no pay, it will not happen. No old person today saw themselves grow old.’’

She says the bulk of money transactions today hinge on borrowing, a pitfall most people find themselves in.

“You must be conscious that when you borrow, you are taking away from your future. What does this mean? You do not steal from your tomorrow. How can you do that? It is selfish. Hustle now because you can.”

Then there is the explosion of the gig economy. The Centre for Global Development estimates that 93,000 young people in Kenya will be employed in the online gig economy by next year.

Njeri says while this is positive, the saving culture among the youth in this type of work is poor. “We must be able to save whatever little money we have for tomorrow. It is never the amount but the habit. Once the habit picks up, increasing the amount is not difficult.”

She says there are cheap pension funds in the market these days where one can save as little as Sh500 per month.

“We do not have a voice without money. It is demeaning. No one wants to call their children to ask for Sh1,000. You want to ask about your grandchildren’s birthday to buy them a gift.”

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