The question goes round the Kenyan investing groups every few weeks, usually posted by someone young enough for the answer to matter. Can I become a millionaire investing 2,000 a month?

It is a good question and it has an arithmetic answer. Almost nobody gives one.

Yes, and here is how long

Two thousand shillings a month, every month, with everything it earns put back in:

Return a year Time to KES 1,000,000
0% — a tin under the bed 41 years 8 months
7.67% — the 364-day Treasury bill, after tax 18 years 9 months
10% 16 years 6 months
12% 15 years

At 12% it takes fifteen years, and the shape of that million is the part worth sitting with. You will have paid in KES 360,141. The other KES 639,859 was not yours to begin with — it is return on return, and it is nearly two-thirds of the total. That is the entire case for investing rather than saving, in one line, and it is true.

So: yes. Not quickly, not dramatically, but yes, and the discipline required is 2,000 shillings and not touching it.

The line that is always missing

A million shillings in 2041 is not a million shillings.

At Kenya's current 12-month inflation of 6.76%, the million you celebrate in fifteen years' time buys what KES 374,862 buys this morning. A used car. Not a house, not a retirement, not the thing the word "millionaire" is doing in the original question.

To reach a million in today's money — the thing actually being asked for — the same 2,000 a month at 12% takes 22 years and 8 months. The alternative is to raise the monthly amount as prices rise, which is the better plan anyway: holding a contribution fixed for two decades is itself a quiet cut, year after year.

None of this makes the answer no. It makes the honest answer yes, in about twenty-three years, or in fifteen if you are content with a third of what you were picturing. Nobody posts that, because it does not get shared.

While you are looking at the table, notice something else. The gap between the dullest thing in the country — a government bill, no decisions, no watchlist — and a 12% return on shares is three and a half years out of eighteen. All the drama buys you three and a half years, and only if the drama goes well.

What actually stops it working

Here is the part that should change what you do on Monday.

Buying and selling shares at the NSE costs roughly 1.78% each way — brokerage, the exchange's levy, the CMA's, the compensation fund's. That is the figure this site charges its own backtests. A sell-and-rebuy is two sides, which leaves 96.47% of the position: a 3.53% round trip, paid on everything you hold, not on your gain.

Run a 12% year through that:

Switches a year What is left of 12% Time to a million
None — buy and hold 12.00% 15 years
Once 8.05% 18 years 3 months
Twice 4.24% 24 years 1 month
Four times — quarterly −2.99% never
Monthly −27.22% never

A quarterly trader, in a year the market gives 12%, ends down three percent. Not down on a bad year — down on a good one. The market did everything he hoped and the costs ate all of it and then some.

This matters more, not less, at 2,000 a month. One side of one 2,000-shilling buy is KES 36 before anyone's minimum commission. Small money cannot absorb activity. The only strategy available to someone investing 2,000 a month is to buy something sensible and leave it alone for fifteen years.

Why nobody sells you that

Which brings us to the thing to be careful of.

Every few days one of these groups posts the millionaire question, and underneath it, pinned, is an offer: daily watchlists, buy alerts, breakdowns, a hundred-odd shillings a month. The offer is sincere in its way. It is also, mechanically, a subscription to the one behaviour the table above says will stop the plan working.

And 130 shillings a month is 6.5% of a 2,000-shilling contribution. Before a single trade, the alerts have to beat buy-and-hold by that much simply to break even — and then beat it by 3.53% again for each switch they persuade you into.

The true answer is worth about nothing to anyone selling anything: buy a diversified something, every month, for fifteen years, and ignore everyone — including the people who told you this. There is no product in that sentence. That is why you rarely read it.

Run your own numbers

The figures above are 2,000 a month to a million. Yours will be different, and the arithmetic does not care.

Our calculator takes a monthly amount and a target and gives the horizon at every rate on the comparison — measured, dated, net of withholding tax — then again in today's money. Put in the return you are assuming for shares and it will show you what trading on it costs, at the rates you would actually pay.

It will not tell you what the market will do. Nothing can. But it will tell you, exactly, what you need to be true.