Njeri, a Corporate Insider with over 20 years of experience, shares insights on money, risk, habits and investing
Wednesday 30 November 2022
The panoramic view from her office takes Njeri Jomo, chief executive of Jubilee Health Insurance, more than 80 years ago, but also to her current circumstances.
The cityscape is not only reminiscent of Nairobi of yore and the genesis of Jubilee Insurance nearly a century ago, but also the weight on her shoulders.
Njeri was appointed to the position a month ago and will lead a team of 250 people as head of the insurance business. It’s a daunting job, given the legacy he’ll be looking to build.
But then she is a company insider with over 20 years experience in financial services.
“If I had worked for an advertising agency, for example, 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 type of me.”
Does it ever get boring doing the same things over and over again? Njeri doesn’t think so.
“As organizations get bigger and bigger, it’s easy to lose sight of who you are and the things that keep you together. It’s always important to keep who you are at the forefront of your mind. What will be required of me? What decisions do I need to make? It’s not a short-term liability.”
Njeri began learning about money early, including habits, investments and risks, and was both a student and teacher of money. She says she’s lucky “that she walked right into it.”
“It’s exciting to understand money. You never get to fully understand it, so it’s a [endless learning curve]. You can easily determine what is a good investment just by 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 a million,” she says.
What financial constraints did he have to contend with? Njeri says that while she wasn’t laid off, she had to take a pay cut twice for a career move she was making.
“Whenever resources are constrained, there’s always a tendency to adjust your spending. I was so intent on counting almost every shilling. I was already married, I had children and I had made certain commitments.”
On leadership, she says it’s easy for leaders to think of themselves as smarter 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 that is passionate about the business will always bring their A-game and intelligence to work. “So my job as a leader is to be an enabler because people will always deliver.”
Virtually all social problems stem from money, she observes, insisting on why people with income should be obsessed with preserving their wealth.
“Question your relationship with money. All you have to do is price things in small quantities. Some people have no respect for money. This explains it [gambling addiction] among poor people. Rich people value their money very much. That’s why I don’t give it easily,” argues Njeri.
Every penny counts
By dividing someone’s monthly paycheck by the number of days they work, she says people start to realize how little they earn and spend every penny carefully.
“From social media to street vendors and other advertisers, everyone else is scheming for your money. Don’t be the only one who doesn’t plan for it.”
How does he plan his money? Is she impressionable? “You just have to show me the right things. I can be a spendthrift. Don’t discuss shoes and clothes. What I do is plan everything. At the end of the day, life shouldn’t be punishing.”
He teaches his three children about money, but above all, about work ethic.
“No matter how smart you are without a work ethic, you’ll never work hard for what you want. The same discipline applies to money. I teach them not to have the right. And that there is a process. You have to earn what he gets.”
Motherhood, she says, is an exam one takes without knowing what the outcome will be. “Hopefully he’s 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.”
Financial planning, she says, involves determining income and its sources, having an emergency fund, investing, health and building wealth.
Budgeting is the first step to financial freedom, she says, warning that just having a budget isn’t enough.
“Where is your money going? There’s a difference between how you spend your money and how you think you’re spending it.”
As tedious as it may be, she notes that it’s imperative to log every little expense you make for 30 days.
“Then categorize the expenses into three categories. Consumables are things you can do without. Adjustables are things you can adjust and basics you can’t live without,” she says, adding that it’s important to have an accountability partner.
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To adequately prepare for contingencies, she says an emergency fund should be three to six times your monthly expenses.
“It stops you from getting frantic because life happens. To build it you have to be deliberate. You also put it in a place you can’t access in a court, like a money market fund.”
Next comes health. In Kenya, one is considered one hospital bill away from absolute bankruptcy.
“There is a cliché that your health is your wealth. I don’t think we understand how serious this is,” she says, noting that most Kenyans are concerned about curative health over preventive health.
“We need to start managing our lifestyle issues early. So we don’t have to get to the stage where we feel bad. There is a strong correlation between obesity and lifestyle diseases later in life, for example.”
Some hospitals, she says, charge an average of Sh500,000 from patients without health insurance.
“It’s a matter of life and death. You can’t walk around not knowing how this is going to work out if it ever did.”
For her, the investment discussion is out of the question for people without health insurance.
“You need to start taking care of the most important component of your wealth creation journey. You. People tend to jump into investing and buy, say, land. But you end up selling the asset at a loss when you’re hospitalized.”
She laments that insurance is not “a very well-understood concept,” despite its “impact on how we can grow in terms of investment.”
Age and risk appetite determine the ideal investment options. “When you’re younger, you have time to buy stocks in the stock market that can mature. When you’re older, you can’t do that. Lenders don’t want to associate themselves too much with you.”
She recognizes that the “black tax” is an important conversation the country needs to have. “Help your people, but have balance and limits. Young people are creating their foundation and building their dreams now. Do you want to fend for your family or 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 don’t plan, it won’t happen. If you don’t plan for the biggest vacation of your life without pay, it won’t happen. No old person was seen growing old today.”
She says most monetary transactions today depend on borrowing, a trap most people find themselves in.
“You have to be aware that when you borrow, you take away your future. What this means? Don’t steal from your tomorrow. How can you do that? He is selfish. Hurry up now because you can.”
Then there is the explosion of the gig economy. The Center for Global Development estimates that 93,000 Kenyan youth will be employed in the online gig economy by next year.
Njeri says that while this is positive, the rescue culture among young people in this type of work is weak. “We need to be able to save the little money we have for tomorrow. It’s never the amount, it’s the habit. Once the habit takes hold, increasing the amount is not difficult.”
She says there are cheap pension funds in the market these days where one can save up to Sh500 a month.
“We don’t have a voice without money. It’s demeaning. Nobody wants to call their children to ask for 1,000 lei. You want to ask about your grandchildren’s birthday to buy them a present.”
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