I've been jobless for 12 years, now I have a Sh15 million windfall. Help me plan for it

My name is Peter. I am 42 years old. I have been unemployed since 2011. I have been living from hand to mouth. But my luck is about to change. After years of waiting, I have inherited property worth Sh15 million, which I intend to sell. I have a wife and three children aged 12, seven and two. Please advise me on how to invest this money so that I can remain financially stable for life.

Benjamin Cheruiyot -- Engagement Lead at Abojani Investments, a personal finance and investment advisory firm -- says:

Coming into a fortune after a long period of unemployment can only be a blessing if you are psychologically prepared to manage the huge sum. Many have enjoyed huge payouts by upgrading their lifestyle to match their new status. Stories abound of jackpot winners, victim settlements and laid-off employees who have blown their fortunes in less than three years. To manage the money, you need to have a sound financial plan in place that allows you to generate sustainable cash inflows from long-term investments. The plan should also include allocations to different investment projects that are well thought out and match your risk profile.

Make sure you invest in something you understand so that you are not disappointed and forced to exit your investments at a loss. As someone who is used to living on a shoestring, you may be tempted to go all out and scatter your fortune to the winds as you seek reassurance from newfound friends and associates. This is a time for caution. The company you keep could be your greatest undoing. You are likely to receive all sorts of unsolicited advice from those who wish to profit from you.

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Poorly researched forays could result in huge capital losses. If you have a young family, it is important to think about your children's education. Your priority should be to set up a fund that will guarantee their education through college or university. You need to engage a financial adviser to work out the cost of education and advise on the best investment that would generate a guaranteed return to meet this need. Think about generational asset classes too. You do not have a family home and it is time to buy one. You should also consider buy-to-let properties in prime locations as a long-term source of income.

You may also want to ensure liquidity in interest earning accounts to meet short and medium term needs. Selling your property for Sh15 million may take some time unless it is in a prime location. Assuming you are able to find a buyer, you should plan to:

i) Buy a plot of land for Sh2 million and build two self-contained two-bedroom units for Sh2 million each. These will earn you between Sh30,000 and Sh50,000 per month depending on the location.

ii) Buy an acre of farmland for Sh1.5 million and build a three-bedroom house for Sh2.5 million.

iii) Invest Sh2.5 million in three government bonds, each paying 17 per cent per annum. Using a laddered approach, you buy in, say, January, March and May. You will receive payouts of Sh85,000 six times a year as coupon payments are made twice a year.

iv) Save Sh1.7 million in a money market fund that earns at least 11 percent per annum. This will give you about Sh13,200 per month. For longer term savings, consider a sacco with dividends between 11 and 14 per cent. For example, at a 13 percent return, these funds could generate an average of Sh18,500 a month or Sh221,000 a year.

v) Save Sh300,000 in a bank account for an agricultural project such as dairy or crop farming. This will keep you busy. Hire an agricultural consultant to assess the area's climate and advise on the best crops to grow.

vi) Assuming a rental income of Sh30,000 per month, your expected monthly income will be Sh85,700. This will allow you to comfortably educate your children and take out a family medical insurance policy at Sh3,000 per month.

If you estimate your monthly budget at Sh50,000, this should leave you with at least Sh30,000 that can be reinvested for compounding returns, preferably in a money market fund account. This will increase your liquidity to deal with any unforeseen circumstances.

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