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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.)

‘CA’ — Two Letters, One Lifetime of Struggle: The Inspiring Story of Priyanka Jadhav

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Bhiwandi: In a remarkable story of determination and grit, Priyanka Jijabai Suresh Jadhav, a differently-abled girl from Savad village in Bhiwandi taluka, has successfully cleared the Chartered Accountancy (CA) examination — a feat that has brought immense pride to her family, her village, and the entire taluka. Despite growing up in poverty, with her mother selling vegetables and her father working as a cleaner in a warehouse, Priyanka never allowed hardship or disability to stop her from achieving her lifelong dream of becoming a Chartered Accountant.


Despite financial hardships and your physical challenges, how did you manage to achieve your dream of becoming a Chartered Accountant?

Life was never easy — limited means, health issues, and financial struggles were part of every day. But I had decided that becoming a CA was not just my dream; it was my way of honoring my parents’ hard work. Many times my health made it difficult to study, but every time I thought of my parents and their sacrifices, I found the strength to continue. Consistency, discipline, and self-belief made it possible. Even in moments of failure, I reminded myself that this dream was mine — and theirs too.


Tell us about your parents’ role and the struggles they faced to support your education.

My parents are my biggest inspiration. My mother toils in the fields under the scorching sun, growing and selling vegetables to support our family. My father works in a warehouse doing cleaning work. My mother would wake up before dawn, take vegetables to the market, return to the fields, and still make sure I had food and time to study peacefully. Their sacrifices gave me strength. Every achievement of mine is because of their relentless support.


What was the biggest challenge during your journey, and how did you overcome it?

The biggest challenge was maintaining faith in myself. Being differently-abled, people often looked at me with pity or doubt. Society constantly compared me with others. But I kept telling myself — you are not weak, you can achieve your dreams. Whenever my results were not as expected, or my body didn’t cooperate, I chose not to give up. I turned every failure into a learning experience. I truly believe —when your mind is strong, no challenge is too big.


What message would you like to give to girls from rural and modest backgrounds?

Never let your background define your future. Your village may be small, but your dreams should be big. Success depends on your effort, not your circumstances. Education is your greatest power — no one can take it away from you. Believe in yourself and never fear failure; it is only a stepping stone to success.


What are your future goals? Do you plan to contribute to society or your village?

My next goal is to use my knowledge to give back to society. I want to organize career guidance workshops for rural and differently-abled students, to show them that limits exist only in the mind, not in life. I want them to believe that they too can achieve whatever they dream of.


How does it feel to finally call yourself ‘CA Priyanka Jadhav’?

It’s an emotional moment beyond words. Those two letters — ‘CA’ — hold years of struggle, tears, failures, and my parents’ sacrifices. It’s not just a title, it’s the realization of a dream we nurtured together as a family.


What message would you give to other differently-abled students?

Your body may have limitations, but your mind does not. Keep faith in yourself. Move forward a little every day. Even when you fail, don’t stop. Success is born from struggle. Believe that you can — because you truly can.


Priyanka’s inspiring journey proves that determination and perseverance can overcome even the harshest challenges. From a humble vegetable-selling family in a small village to earning one of the toughest professional qualifications in the country, CA Priyanka Jadhav stands as a beacon of hope for countless students fighting against odds to fulfill their dreams.

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