I am 36 and have inherited five acres. I want to sell four, is this the right move?

I am 36, married with two children who are in public primary school. I am the last born in a family of five. We live upcountry. My wife works as a primary school teacher while I work for a local dairy company as a milk collector.

Currently, our combined family earnings are about Sh40,000 per month. We pay rent Sh10,000, food and groceries Sh12,000, water Sh600, Kenya Power Sh1,000, salon Sh5,000, pocket money Sh3,000 each, Sacco savings Sh5,000.

I recently inherited five acres of family land and I am thinking of selling four at Sh1.5 million per acre, then build a home on the remaining one acre. I would also like to set up a modern zero-grazing farm, a chicken farm, and have some other investments because land does not appreciate very well in our area.

I would also like to secure my children’s education. Is selling the land the right idea? What do I invest in? I don’t want to be the village example of a fool who sold all his land and misused all the money. Ryan.

Rhina Namsia is the founder of The Acemt Consulting, a training and consultation company

Looking at your income levels versus your ambitions and plans, I assume you want to accomplish all your desires from the proceeds of the land sale. Is selling land a bad thing? Yes, and no. It all depends on different factors such as your needs, aspirations and what the proceeds will be used for.

Land inheritance has its challenges in some communities, especially due to the sentimental value families attach to land and inheritance. You may have inherited it, but selling it can trigger disputes and conflicts within your nuclear and extended family. Sell only if there is consensus within your immediate family. If you sell the four acres, the remaining acre might not be enough to accommodate a home, zero grazing, farming, and poultry keeping.

Instead of selling four acres at a go, only sell part of the land and then sit down with your wife and discuss how you can use the funds to secure a few investments and maybe start building a home.

Your current source of income is from the dairy farming sector, which makes you more conversant with how the sector works, which dairy breeds will be manageable for you and the output you should expect.

You don’t have to start big, but you must start well. This means the right dairy cow, the right feeds, and the right structures. The same goes with chicken farming. Do it professionally by building proper chicken housing, having the right chicken accessories, vaccinations, and the right breed.

A clear plan is essential if you want to accomplish your goals. If you sell two acres for instance, you can fetch Sh3 million, assuming you sell at the said price of Sh1.5 million each.

You can set aside an education fund for your children and lock it in an interest-earning account to safeguard yourself for their future academic pursuits, which will require more funding.

For instance, if you put Sh1 million in an account that earns an average of 13 per cent for about 10 years, and reinvest all interests there, this investment could grow to more than Sh3 million.

Part of the remaining Sh2 million can be used to set up the infrastructure and the dairy and poultry businesses you are aiming to start.

Do proper market research to know the actual costs of starting. List all your anticipated expenses and market rates. What the structures will cost, what a good dairy breed will cost, the number of chickens to start with, veterinary and related agro costs.

Start with a budget ceiling of Sh1 million, but aim at reducing costs as much as is professionally manageable. In fact, by squeezing your costs, you might be able to acquire a TukTuk or tricycle to ease your milk deliveries.

Spread the remaining amount in diversified investments including the securities markets, Sacco and life policy. The second option will be to hive off a part of it, for example, Sh250,000 to set up a simple two-bedroom temporary mabati house at your farm where you can move in to save on rent as well as have closer management of your dairy and poultry business.

This will relieve an extra Sh10,000 which you can direct to monthly Sacco savings for a total family monthly Sacco savings of Sh15,000 (Sh10,000 + Sh5,000 current Sacco allocation).

The remaining Sh750,000 can be diversified in stocks, money market funds, and a base Sacco shares investment. Consult a professional investment advisor to guide you in these processes to avoid losing your money from bad investments in the securities market and Saccos.

As your farm comes up, your food and groceries budget will start to decrease. Encourage your wife to enroll for further studies to boost her earning capacity. In your budget, you have Sh4,000 that is unaccounted for. Find out where it is going. In a year, this amounts to nearly Sh48,000.

If you have any money problems, send us an email at [email protected] and leave your number for contact. Money questions will be answered on this column