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Personal Finance 101: What Did You Learn at Home? – Part 2

When I was growing up, the wealthiest and most financially stable people around me were civil servants. They were mainly teachers, nurses, agricultural extension officers, policemen, chiefs and their assistants amongst others. However, their wealth and affluence was overshadowed by the few bankers I knew, one of them being a close relative. I recall the battles between the trade unions and employers in regard to demands for salary increment for the aforementioned civil servants and bankers. The most prominent battle was between the Kenya National Union of Teachers (KNUT) and the Ministry of Education.  On a few occasions, there were similar battles between Kenya Bankers (Employers) Association and the Kenya Union of Commercial Food and Allied Workers (KUCFAW).

Amongst those around me were close relatives who, with hindsight, influenced my perceptions about personal finances and career choice – 3 teachers, a banker and one who changed jobs several times before eventually settling on a parastatal job. The teachers said little if anything positive about the profession. They bemoaned how they were being exploited by their employer yet they were the ones laying a foundation for the well paid professionals. In my opinion at the time, they were right and entitled to better pay. However, with hindsight, I think they were only partially right. I will come back to this later.

The bankers were the best paid and with better benefits than all the rest and they did not hide this fact. In addition to their positivity, their lifestyles were evidence to this fact. All of them had better houses than the rest though we did not know – at least until some lost their jobs in the 1998 bankers’ strike – that the houses were on mortgage. The senior most of them also had two cars and his children attended high cost international schools while the rest of us had to make do with public schools.

Due to the contrasting lifestyles of the unemployed – who often struggled to pay school fees even in public schools – on one end of the scale and the employed with the bankers as the cherry on the cake, I naturally gravitated towards employment as the best way to earn a living. Banking was of course the most attractive career and I had little interest in the so called premium careers such as medicine, architecture, engineering or law. I actually had an indifferent attitude towards engineering since a close relative who had studied a diploma in water engineering was teaching as an untrained teacher in a public school whereas one of my mathematics (untrained) teachers was a jobless graduate of mechanical engineering.

My environment imparted several values that have a direct impact on personal financial journey. Foremost was that employment is the best way to financial security. Secondly, I learnt that a high salary was the best way to improve financial security and create some wealth. I also learnt that employees needed protection from trade unions in order to avoid exploitation by employers. Consequently, I studied hard in order to get a good job and luckily, I landed a job in banking. In addition, I prayed and hoped for salary increments and promotions so that I could improve my living standards. I dreaded the decline of KUCFAW and later the Banking, Insurance and Finance Union (BIFU) which eventually left us without an effective union. For close to 16 years, I dreaded a job loss since this was equivalent to being consigned to poverty. I also changed jobs frequently in search of a higher salary, a strategy that worked well in 12 years until I rejoined a bank and learnt a valuable lesson which I will share at a later date.

Why did I state earlier that my relatives were partly wrong? As shared in my article dated 3rd June 2019, employment has its drawbacks which include but are not limited to the risk of job loss, lack of opportunities to exploit one’s talents as well as failure to invest fuelled by the constant and predictable income that is a salary. Two of the teachers retired gracefully at the age of 55 and are still partly reliant on their children and pension for upkeep. The senior most banker lost his job in his early fifties and his personal financial situation deteriorated to the extent that he could no longer afford school fees for his children. The third teacher ventured into something different and made it big time financially – I will share his story in the next post.

Weru Mwangi is the Lead Consultant at Ultimate Management Solutions, a firm specializing in Finance, Governance and Leadership Development.  He can be contacted on weru@theultimategroup.co.ke

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