Understanding Inflation

Inflation is the rise in the general price of goods and services. When it runs at 15%, ₦10,000 next year buys what ₦8,700 buys today — approximately, and painfully.

Cash under a mattress has a real return of minus inflation. A bank balance that pays less than inflation also shrinks in purchasing power, even as the naira number stays the same or rises slowly.

Investing is one of the few lawful ways households try to outpace this erosion. It is not guaranteed to succeed in any given year.

When you read a portfolio value of ₦63,842 against ₦60,000 contributed, ask a second question: what did those naira buy, after inflation and fees? The naira figures alone don't answer that.

A serious investor tracks real return, not just the headline naira line.