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Personal Finance

‘How I Built My Retirement Investment’

Convent International Hotel
Convent International Hotel in Lavington. PHOTO | DIANA NGILA | NMG 

The Kimuyus constructed a hotel that only caters for non-alcoholics.

A lush green façade adorns Convent International Hotel in Nairobi’s Lavington, built by Abednego Kimuyu and his wife Alice. The two are pastors and their hotel only caters for non-alcoholic customers.

For the Kimuyus, the hotel is an early retirement investment that they envisioned when they were still employed.

Abednego worked as a banker for 28 years before he took an early retirement in 2011 to concentrate on his business while Alice kept her job at the Ministry of Agriculture before following suit later.

“Once you are hired, know that one day you will leave that employment to concentrate on what you love most or confront misery in its true form — poverty in your twilight years. It is up to you to decide early what you want to become or how you will spend your ‘free’ time,” says Abednego.

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He adds that retirement is never a surprise but an eventuality that should enable one to utilise experience learnt during their working life, savings made and realise the dream of re-inventing themselves afresh.

“It must be a time to enjoy and must never be a struggle,” he says.

“Work to invest, gain experience and get exposure for better networks as well as raise capital via savings. Spend all your employment years identifying your next business after retirement,” says Alice who is 61 years old.

Abednego bought a half acre plot in Lavington where he planned to build a home but changed his mind in 2009 and constructed a one storeyed non-alcoholic hotel with 10 rooms.

“It was soon overwhelmed by client demand and we took a loan that added with part of our savings to expand the hotel. We now have five conference rooms, a restaurant, an open garden party area as well as an executive boardroom,” he says.

Succession

Abednego studied Mathematics and Computer Science and later pursued a Master's degree in Business Administration majoring in entrepreneurship at Massachusetts University in the US.

He worked at KCB Group for 28 years in various sections, including general operations, mortgage financing and credit risk management.

“Despite the years of expertise in the financial sector, I could not start a bank because it requires a lot of capital. I wanted to build an enterprise that revolves around people. I opted for a hotel that rides on Christian values which gives me an avenue to continue serving people,” says the father-of-three.

For a retirement investment to pay off, Abednego says, it has to be professionally run.

“We have retained architects and a landscape architect as well as tree and flower nursery operator. This ensures everything is planned for. Any expansion is informed by a demand-need. Do not get into a business just because your friend has succeeded, study and venture on your personal path,” he adds.

With clear structures that enable the hotel to run even without their close supervision, the Kimuyus can easily engage in their passions like travelling and attending church meetings across the world.

“Our children are not in the business. Their role is first to pursue their education and later join in. The experience they gain out there is crucial to take this business to the next level. One works in a bank in Australia, another works as a finance officer in a non-governmental organisation while our last born just graduated as a lawyer,” Abednego says.

“Allowing children into a business quickly portends a disaster since they have no work ethics but raw power and access to finances. Wielding enormous power erodes the corporate culture needed to drive a business to another level,” he adds.

Married for 36 years, the couple says their sojourn in Nairobi will be short-lived as they are currently concentrating on a farm that also supplies fresh foodstuff to their hotel.

“Old people have no place in a fast lane Nairobi. Will motorists tolerate an old man who slowly crosses the road? As one gets older, you need to return home where you will enjoy utmost respect among your community as an opinion leader,” he says.

Early investment

Retirement is a puzzle that many Kenyans struggle to solve. According to Octagon Africa Financial Services, the lowest one should save for retirement is Sh100 a day or between Sh3,000 to Sh4,000 a month which will give one up to Sh3 million in pension savings upon attainment of 60 years.

Avoid instant gratification in favour of a pension’s plan that will offer long-term gain, says Fred Waswa, the Octagon Africa chief executive.

“If you want to enjoy your free time travelling the world to see wildlife, swim in oceans and attend global or regional cultural activities annually, then set aside an extra Sh100 a day or Sh3,000 a month for that purpose. Set aside more money for the fun things you plan to do upon retirement as the pension’s kitty should remain intact for one purpose — sustaining your livelihood,” he says.

Hosea Kili, the managing director of CPF Trust Fund Group adds that upon retirement, expenses usually reduce by 30 per cent but the retiree has to figure out how to cater for 70 per cent of their monthly expenses.

“Savings for retirement will then come in handy. Each individual’s expenses are different and this should inform the savings’ plan one should have,” he says.

But Hosea advises retirees not to venture into investments that they are not very conversant with. Remember, the essence is to have a relatively hassle-free business that will finance your sunset years and hobbies.

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