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By:

Kaustubh Kale

10 September 2024 at 6:07:15 pm

Silent Money Killer: Loss of Buying Power

In personal finance, we often worry about losing money in the stock market, dislike the volatility associated with equities or mutual funds, or feel anxious about missing out on a hot investment tip. Yet the biggest threat to our wealth is far quieter and far more dangerous: loss of buying power. It is the invisible erosion of your money caused by inflation - a force that operates every single day, without pause, without headlines, and often without being noticed until it is too late....

Silent Money Killer: Loss of Buying Power

In personal finance, we often worry about losing money in the stock market, dislike the volatility associated with equities or mutual funds, or feel anxious about missing out on a hot investment tip. Yet the biggest threat to our wealth is far quieter and far more dangerous: loss of buying power. It is the invisible erosion of your money caused by inflation - a force that operates every single day, without pause, without headlines, and often without being noticed until it is too late.
Inflation does not take away your capital visibly. It does not reduce the number in your bank account. Instead, it reduces what that number can buy. A Rs 100 note today buys far less than what it did ten years ago. This gradual and relentless decline is what truly destroys long-term financial security. The real damage happens when people invest in financial products that earn less than 10 per cent returns, especially over long periods. India’s long-term inflation averages around 6 to 7 per cent. When you add lifestyle inflation - the rising cost of healthcare, education, housing, travel, and personal aspirations - your effective inflation rate is often much higher. So, if you are earning 5 to 8 per cent on your money, you are not growing your wealth. You are moving backward. This is why low-yield products, despite feeling safe, often end up becoming wealth destroyers. Your money appears protected, but its strength - its ability to buy goods, services, experiences, and opportunities - is weakening year after year. Fixed-income products like bank fixed deposits and recurring deposits are essential, but only for short-term goals within the next three years. Beyond that period, the returns simply do not keep pace with inflation. A few products are a financial mess - they are locked in for the long term with poor liquidity and still give less than 8 per cent returns, which creates major problems in your financial goals journey. To genuinely grow wealth, your investments must consistently outperform inflation and achieve more than 10 per cent returns. For long-term financial goals - whether 5, 10, or 20 years away - only a few asset classes have historically achieved this: Direct stocks Equities represent ownership in businesses. As companies grow their revenues and profits, shareholders participate in that growth. Over long horizons, equities remain one of the most reliable inflation-beating asset classes. Equity and hybrid mutual funds These funds offer equity-debt-gold diversification, professional management, and disciplined investment structures that are essential for long-term compounding. Gold Gold has been a time-tested hedge against inflation and periods of economic uncertainty. Ultimately, financial planning is not about protecting your principal. It is about protecting and enhancing your purchasing power. That is what funds your child’s education, your child’s marriage, your retirement lifestyle, and your long-term dreams. Inflation does not announce its arrival. It works silently. The only defense is intelligent asset allocation and a long-term investment mindset. Your money is supposed to work for you. Make sure it continues to do so - not just in numbers, but in real value. (The author is a Chartered Accountant and CFA (USA). Financial Advisor.Views personal. He could be reached on 9833133605.)

Bogus Blame

In a damning indictment of the then Congress-led UPA’s counter-terrorism apparatus and its cynical politicisation of investigative agencies, a special NIA court has acquitted all seven accused in the 2008 Malegaon bomb blast case, including Lt. Col. Prasad Purohit and Sadhvi Pragya Singh Thakur. The verdict was unequivocal: there was no evidence, let alone evidence “beyond reasonable doubt.”


The Malegaon case was not just a botched probe but a cynical campaign to frame an entire ideological movement, and by extension, a religious community as India’s new internal enemy. Its lethal, politically motivated fiction, hatched and peddled by the highest echelons of the Congress at the Centre and the then NCP-Congress government in Maharashtra, was instrumental in promoting the bogey of ‘saffron’ or ‘Hindu terror’ across the world.


This linguistic sleight-of-hand of replacing ‘Jihadi terror’ with ‘Hindu terror’ aimed to manufacture moral parity in a cynical bid to appease one section of the electorate by demonising another. In doing so, the case has eroded trust in national institutions, emboldened actual terrorists and sowed communal discord. Even the integrity of the Army was not spared.


The ATS had claimed the blast was orchestrated by Abhinav Bharat, a little-known group allegedly led by Thakur and Purohit. The motorcycle used in the blast was supposedly traced to Thakur, though its identification was tampered with. Purohit, a top Army intelligence officer with a record of infiltrating anti-national networks, was accused of supplying explosives.


Purohit’s persecution went far beyond the courtroom. While in custody, he was subjected to inhuman torture whence he was repeatedly beaten in the goriest manner possible while his family were traumatized. Similar was the case with Pragya Singh Thakur.


The officer who had risked his life infiltrating terror networks was now being vilified by the very system he had served. Yet, despite the barbarity inflicted on him, Purohit bore it with stoic dignity.


But it is the political choreography that is most damning. Congress leaders like Digvijaya Singh turned court proceedings into talking points. From branding the RSS a “bomb-making factory” to blaming Hindutva groups for attacks ranging from Malegaon to Samjhauta Express, Singh was the public face of a campaign that had deeper roots within the government. In 2010, Home Minister P. Chidambaram infamously warned of a “saffron terror” threat. In 2013, Sushilkumar Shinde, then Home Minister, alleged that BJP and RSS were running “terror training camps.”


The recent judgment lays bare the institutional rot. The ATS failed to follow basic protocols and no link could be proven between the accused and any explosives. The NIA, after inheriting the case in 2011, eventually dropped charges under MCOCA and admitted the ATS’s investigation was riddled with serious lacunae.


What the Congress really ended up doing was corrupt the very machinery of justice. Justice delayed is tragic. But justice perverted is unforgivable. The Congress owes an apology, not just to the falsely accused but to the country it sought to divide by creating ghosts it could never exorcise.


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