Literacy
·5 min read·15 Apr 2026Financial Literacy 101: The Words That Matter
Net worth, cash flow, APR, compounding — the vocabulary that separates confused from confident.
Money decisions get easier when the words make sense.
Net worth
Everything you own minus everything you owe. Track it quarterly; it should trend up.
Cash flow
Money in minus money out, monthly. Positive = building wealth. Negative = bleeding.
APR vs flat rate
A "10% flat" loan over 12 months is roughly 18% APR. Always ask for APR.
Compounding
Interest on interest. ₦10,000/month at 15% becomes ₦2.7m in 10 years. Time matters more than amount.
Liquid vs illiquid
Cash and money market = liquid. Land and equipment = illiquid. Keep enough liquid for 3 months of expenses.
Inflation
If inflation is 25% and your savings earn 10%, you are losing 15% real value. Invest accordingly.