What you need to know:
- "For 23 years I watched the investment grow to a point it had hit 530 pupils…until the devil came visiting in March 2020,” James Kung'u reminisces.
- In a panic, Mr Kung’u contemplated selling off the investment but no offer was forthcoming since no investor was interested in buying a school that had no certainty of reopening.
- At 69 years today, he says the Covid-19 pandemic has taught him a crucial financial lesson — that all enterprises so far have been built on quicksand and can go up in smoke at the least of prompting.
After teaching primary schools for 21 years, James Kung’u had had enough. In 1998, he opted for early retirement with a plan to invest in his own school. He had worked for other people, it was time to work for himself.
His capital came from his pension of Sh362,000 and savings of Sh1 million.
From the money he made as a teacher, Mr Kung’u also bought seven acres of land in Kirinyaga County where put up temporary structures to kick start his dream.
He spent Sh300,000 as initial capital to found Roka Preparatory Primary School in Mwea Town where his starting ‘stock’ was 17 pupils.
The name of the school is an abbreviated version of Reliable Organisation of Knowledge Acquisition (Roka) where he says discipline is key.
“With sheer hard work and patience, the investment grew in leaps and bounds, blessed with God’s favour in posting good performance. For 23 years I watched the investment grow to a point it had hit 530 pupils…until the devil came visiting in March 2020,” he reminisces.
Mr Kung’u says his annual profit had hit between Sh8 million and Sh12 million by the time the Covid-19 pandemic struck, shutting down schools indefinitely.
“Life became stranger than the day into which I was born…I had a Sh2.4 million loan that was ongoing and my collateral was the pupils in the classes…as I watched them pack and leave my school compound, the financial hollowness that engulfed me was overwhelming,” he says.
More pain came in seeing his 31 employees pack and leave their staff quarters in May after it became untenable to pay them their combined Sh290,000 wage bill.
And as the last of the pupils left for home, his books of accounts reflected that parents had combined arrears of Sh6 million.
He says he had another loan of Sh5 million that was nearing completion and a pending application for a further Sh23 million loan that he intended to invest in real estate.
His Sh800million investment in both assets and returns all of a sudden came to a grinding halt.
In a panic, Mr Kung’u contemplated selling off the investment but no offer was forthcoming since no investor was interested in buying a school that had no certainty of reopening.
“It was creative time now in my personal finance. I took advantage of the Central Bank’s directive to renegotiate my loan. I sought a moratorium for service terms of my loans and that was granted. I got a two year grace period,” he says.
With uncertainty as to when the schools would reopen, Mr Kung’u knew that he had two cardinal personal finance obligations — to generate some income to service his loans as well as meet his daily needs.
As a man who had grown up dyed in poverty where he had to work as a casual labourer and at one point as a houseboy to raise his school fees, he says one thing he has never been ready to adopt is the spirit of saying die.
He made a decision that even shocked him.
“In my brainstorming sessions in search of a way out of my financial mess, I toyed with the idea of farming. The more I gave it a thought, the more it became manifest that it was my most strategic escape route,” he says.
He transformed some of the classrooms to house chicken where for the past three months, he has built his stock to 1,500 layers and 2,000 broilers.
Mr Kung’u transformed the parade ground as well as the playing field into a vegetable farming field where he has a variety of crops that are now almost ready for the market.
His Sh15 million swimming pool became a reservoir for irrigation water!
“Okay, my farming math cannot compare with what I was getting as a school-enterprise…but I am making some good money. I am looking at selling about 1,000 eggs per day at Sh10 apiece and about 2,000 kilogrammes of vegetables each on average fetching Sh30. This should add up to Sh70,000 in daily income,” he says.
At 69 years today, he says the Covid-19 pandemic has taught him a crucial financial lesson — that all enterprises so far have been built on quicksand and can go up in smoke at the least of prompting.
On earning, he says he has come to learn that the figures are not important, rather, “how satisfied and how comfortable the earnings make you feel is key.”