Kenyan entrepreneurs Leonard and Emily Mcharo spent years living far below their means. There were no holidays, no weekend road trips, and no bikes for their children. While their peers were upgrading their lifestyles, the Mcharos’ home remained devoid of luxuries.

Their frugal lifestyle wasn’t born of necessity, but of intent. The couple had set themselves a clear goal: to achieve financial independence – a point where their basic living expenses could be covered entirely by passive income. Their target figure was 500,000 Kenyan shillings (around US$3,850 back in 2004) per month.

That discipline, Leonard says, was inspired by his grandfather: Though he was a civil servant who never earned a large salary, he retired comfortably thanks to decades of saving and investing in income-generating ventures such as farmland and rental property.

“Because he had been prudent all his life and fairly frugal, in later years he lived well,” Leonard explains. “He drank wine when he wanted; he used butter, not margarine. He lived to about ninety, never needing help from his children. My grandfather just had this gentle upward trajectory throughout his life until his death.”

His grandfather’s story stood in contrast to both Leonard and Emily’s backgrounds. While their fathers had done well when the children were young, circumstances caused both families’ financial situations to deteriorate significantly as they aged. Determined to avoid that volatility, the couple decided to chart a different path – one that would lead to lasting financial freedom.

The vehicle they chose was student accommodation. Emily, having grown up outside Nairobi, had lived in a hostel while studying. “My mother had to pay hostel fees for me to be able to go to campus,” she says. “It was a lot of money, so we knew there’s money in the hostel business.”

The couple found a parcel of land for sale near Daystar University in Nairobi. The problem was they didn’t have the capital to buy it. However, after sharing their vision with the property owner, she agreed to let them pay in monthly instalments – a major breakthrough for the Mcharos.

From then on, they adopted a strict budget and lived extremely lean. They survived on Emily’s salary alone, channelling Leonard’s entire income into the hostel project. Any extra earnings – whether salary increases or annual bonuses – went straight into paying off the land. While they sacrificed, they watched their peers spending freely. “Our friends had bigger cars, bigger homes, better furniture, better things,” Leonard says.

The only area where the Mcharos didn’t cut corners was their children’s schooling. “We spent liberally on their education,” he notes, “but everything else – their clothes, everything – was kept to a bare minimum.”

They cleared the land payments within two years and immediately began construction. Leonard was thirty-one at the time, and Emily twenty-six. Their target was a hundred units, but with limited cash, they had to build gradually. Each time a section was completed, they rented it out and channelled the income straight back into buying cement and steel for the next phase. “It was even difficult to keep friends because we were walking on a very different path from them,” Emily recalls.

It took thirteen years of disciplined living to finish the project. Thirteen years of restraint and sacrifice – but when the last unit was completed, the Mcharos had achieved their goal. The hostel’s rental income alone could now support their family.

In 2015, they launched Tsavo, a company that allows others to replicate the financial independence they had achieved through real estate investments.

This article is an excerpt from our latest book How we made it in Africa II. To learn more about how Leonard and Emily Mcharo built a Kenyan real estate company selling financial freedom, purchase the book from the official website or from Amazon.

Related articles