So you’ve got this investment in a not-so-stable environment for a few years back and you think you’ve hit a jackpot. Well, that could be true but let’s dig a little deeper. Can you genuinely pinpoint the factor for this appreciation? If you’re still scratching your head, then that is a forced appreciation. But first, imagine this: You are climbing a staircase, rung by rung, building your wealth with discipline and patience. Suddenly, the stairs start rising faster than you can climb. You try to keep up, even increased your pace, but along the way, you fall, and all that is left is a burnt, overstretched, unrecognizable version of yourself.
That is the inflation trap. It makes your investments look like they are growing, until you convert them to dollars, or compare them to rising costs, and realize you’ve been either moving backwards or best, standing still.
Inflation, today is not just an economic term, it has become a silent thief. And for Nigerian investors, that is more dangerous than ever. It makes you feel richer on paper while eroding your wealth in real terms.
WHAT IS THE INFLATION TRAP
The inflation trap happens when the rate of inflation outpaces your income growth and investment returns. So while your naira assets may rise in price, their worth especially in global terms, might be absolutely nothing. In short, today’s Naira won’t buy what yesterday’s Naira could, and tomorrow, it will buy even less unless your money works harder than inflation.
A Real-World Example
Few months ago, I wrote something on LinkedIn: “Your property doubled in price, but your wealth did not grow”, and it caught someone’s attention. Apparently, he had just sold land in Uyo for ₦100 million; a land he bought for ₦50 million six years ago. He was proud, until he read the post. Because six years ago, ₦50 million was worth about $138,000, with the exchange rate at ₦362/$1. Today, that ₦100 million is just about ~$65,000, a whopping $73,000 dollars loss on the global scale, meaning he got 50% richer, but 50% poorer, the irony.
Deals like that do not make you richer, it can only help you stay afloat while inflation rises and the currency collapses.
Your Appreciation Might Just Be Inflation
Many Nigerian investors are mistaking price inflation for asset growth meanwhile Nigeria’s inflation hovers around 23.7%. The naira has dropped over 70% in five years. You might be gaining in naira terms, but losing value in every other way. You pay more for diesel. More for upkeep. More for everything, yet your rental income and resale value rarely keep up.
Now, back to the investment you made, you’re probably smiling at the apparent increase in your property but when you do the math, you will observe that you are falling behind. So if:
You can not explain why your property rose in value
Nothing changed in the area, no new roads, malls, or demand.
Your costs (construction, maintenance, taxes) have also doubled
Then have a rethink, that is not growth. It is the entire economy getting more expensive, and dragging your asset along for the ride.
Why This Matters (Especially in Real Estate)
Real estate is often called a hedge against inflation, but not all properties qualify. Especially not in economies where inflation outpaces returns. This is what inflation can do to investors:
As Homebuyers
1. Mortgage rates rise
2. Construction costs explode
3. Reduces your buying power.
Investors
1. Rents struggle to keep up with expenses
2. Maintenance costs surge
3. Real returns vanish after currency adjustment.
If you are earning in Naira, saving locally, planning for a retirement based on “local property appreciation”. You need to stop! Because, unless your assets can beat inflation and cross borders, you are trapped.
So What Is A Smarter Move?
Stop judging wealth in Naira and clapping for properties that only look rich on paper. Start asking better questions: Can my investment outpace inflation? Can it grow in global terms? Can it give me income I can spend anywhere in the world? Diversify and invest where your money holds its power, and grows it. You don’t have to fight inflation alone, you just need to invest beyond its reach.
That is what the International Property Pension Plan (IPPP) was built for. To help you build global assets in strong markets like Cape Town and Dubai.
So, your property may have made money. But did you? Were you able to beat inflation with that money, and have enough left of it? If your wealth can not travel, can not grow, and can not outpace inflation, then it is not working hard enough.
Take the first step toward global property income. Connect with us to know how the IPPP can help you grow your wealth, without confusion, without guessing, and without inflation stealing your gains.
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