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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.)

Giving Plastic a Second Life: From Hazard to Resource

Instead of letting plastic waste reach landfills, we recycled it into reusable materials, turning a hazard into a resource for the circular economy.

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In my earlier article, I shared how our biomedical waste facility in Thane grew from humble beginnings into a recognised, multi-district service network. But the journey was about more than just machines and compliance. Alongside building a state-of-the-art treatment centre, we transformed the surrounding debris-strewn land into a thriving green space—what would become Ankur Theme Park. This initiative turned barren soil into a living classroom, where students, citizens, and environmental enthusiasts could learn directly from nature, explore innovative waste management techniques, and witness sustainable practices in action.

Our commitment to sustainability extended from greening the land to managing hospital waste responsibly, particularly medical-grade plastics that could be recycled rather than discarded.”

Recognising their potential, what began as a simple need to manage waste responsibly evolved into a full-fledged journey: setting up recycling units, upgrading facilities, and navigating regulatory and operational challenges over the years.

Various plastic items or devices used in hospitals during treatment are made from high-quality, medical-grade plastics, including polycarbonates, polypropylene, and polyethylene. Generally, these are collected and transported in red-coloured bags to the common facility and sent to the landfills after proper treatment. This results in the loss of precious resources. This plastic can be recycled and reused following a circular economy path.

When we realised the importance of this plastic, we started our own plastic waste recycling unit in Murbad MIDC after obtaining all the necessary permissions and authorisations from the concerned authorities. Our team used to disinfect plastic waste received in red bags from the hospitals in an autoclave. Such disinfected plastic was then shredded into pieces in a mechanical shredder.

These pieces were then stored in gunny bags and transported to our own recycling unit. For operating this plant, we had employed a few people from the Murbad tribal area. After the Biomedical Waste Management Rules, 2016, came into force, operators were allowed to collect biomedical waste from hospitals within a 75 km radius. New facilities were subsequently established in Vasai-Virar and other areas.

By 2013, we wanted to replace our incinerator, as it had almost reached the end of its life. We wanted to buy a new machine with modern technology. As per the rules, we now needed a bigger place for the installation of new machines. We applied to the concerned authorities in Thane Municipal Corporation for a suitable plot and to the Maharashtra Pollution Control Board for authorisation to install new machines, particularly the incinerator.

As per the law, the Thane Municipal Corporation was responsible for providing suitable land. We were allotted a plot of about three acres in size in Daighar, near the ShilPhata area. All paperwork was done. We got the land in our possession and started planning for erecting the required infrastructure on that plot. We hired an architect and started working on it. However, one fine day, suddenly, we were asked to surrender the plot, as the said plot is to be allotted to a company for their highly ambitious waste-to-energy project. We were stunned and unsure how to proceed.

Then the 2019-2020 coronavirus pandemic struck humanity all over the world. The number of patients admitted to hospitals due to coronavirus infection started growing. In that proportion, the volume of infectious waste also started growing. This waste comprised of personal protective robes, gowns, masks, and other disposables, which were extremely hazardous.

Our workload increased manifold, as this was in addition to our regular workload. All our workers did an amazing job working almost around the clock to make sure that the waste was properly treated. To our surprise, none of our workers caught the coronavirus infection.

By the time the pandemic was over, we received a notice from MPCB asking us to stop the work in this facility because we were not taking any measures to upgrade our systems. We pleaded that unless TMC provides us with suitable land as required by the law, we cannot upgrade our system.

MPCB and TMC went on tossing the ball in each other’s courts, and finally, in 2022, with heavy hearts, we were compelled to close down our facility.


(The author is an environmentalist. Views personal.)

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