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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.)

From Headspace to System Space: Designing the Cognitive Off-Ramp

Scaling begins the day your head stops being the system.


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Over the past three weeks, we’ve explored the hidden traps of cognitive load. The inbox inside a founder’s head. The debt created when decisions stay in memory. The illusion of delegation that doubles the load instead of reducing it.


This week, I want to close the arc by showing what happens when the system finally begins to carry the weight.


At “The Factory,” our composite SME case, the founder had built a capable team. Managers understood their functions. Processes were documented. Tools were live. And yet … the company still slowed whenever he wasn’t available.


The problem wasn’t team capability. It was the absence of exits. There were no structured pathways for decisions to move out of his head and into the system.


Scaling begins when those exits are built.


Invisible bottleneck

Every leader knows the feeling: the team can act, but they still wait. A shipment ready to go. A proposal ready to send. A hiring decision everyone agrees on.


And yet the pause lingers: “Better confirm first.”


The irony is that leaders often read this as team weakness. In truth, it’s a system design issue. If every road still leads back to your brain, you haven’t built a company. You’ve built an extension of yourself.


That’s not scale. That’s fragility.


Designing off-ramps

At The Factory, the turnaround began with one question: “How do we build exits?”

The answer was deceptively simple: design cognitive off-ramps visible, structured mechanisms that allow decisions to leave the founder’s headspace and enter system space.


The team introduced three shifts:

  • Role charters that made ownership explicit, so decisions didn’t bounce upward by default.

  • Decision ladders that defined who could decide what … and when to escalate.

  • Escalation windows that created clarity: if the founder didn’t respond in 24 hours, the team could proceed.


Each design was an exit. Each exit moved mental RAM out of the founder’s head and into visible system pathways.


Mental RAM release

The most immediate effect was relief. The founder no longer carried every loop. For the first time in years, he wasn’t replaying vendor negotiations at night or tracking overtime approvals in his mind.


This is what we call mental RAM release the deliberate freeing of leadership attention through structure.


Without exits, the founder’s brain was the server. With exits, the system absorbed the load.


System absorption

The deeper change was cultural. Teams stopped waiting.


When charters, ladders, and windows were visible, hesitation dropped. Managers acted with confidence because they weren’t guessing invisible rules. They could point to the structure and say: “This is mine. This is how we move.”


That’s system absorption: when the organisation itself takes in cognitive load and prevents rebound into memory.


At The Factory, velocity doubled. Not because the founder worked harder, but because the system carried what his head once held.


Human confession

When I asked the founder what felt different, he smiled: “For the first time, I wasn’t the bottleneck. I wasn’t scared the company would stall without me.”


That’s the moment scale becomes real. Not when dashboards glow green. Not when teams are hired. But when your brain stops being the system.


Final reflection

Cognitive load is invisible until it breaks. For many leaders, the real barrier to growth isn’t markets, funding, or even talent. It’s the quiet truth that every road still runs through their head.


Designing cognitive off-ramps is how companies escape that trap.

  • Role charters.

  • Decision ladders.

  • Escalation windows.


Dashboards that replace midnight pings.


These aren’t administrative tools. They’re structural exits. And every exit frees mental RAM that leaders desperately need. Scaling without chaos begins when the system, not the founder, becomes the place where decisions live.


Read more in-depth insights at: www.ppsconsulting.biz/blog


(Rashmi Kulkarni is Co-founder at PPS Consulting. She helps growth-stage founders design execution systems that free leadership headspace and build organizational velocity. Views personal.)

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