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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.)

How the Bhagavad Gita Explains the Age and Cycles of the Universe

In Vedic cosmology, the universe unfolds in Kalpas and Yugas — vast cycles that challenge our modern sense of time.

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Akshara Brahma Yoga, the 8th Adhyaya of the Bhagawad Gita, refers to the ultimate goal of life, the nature of the Supreme Being, and how one can attain liberation from the cycle of life and death.


In this Adhyaya, paragraph 17, Lord Krishna says:सहस्रयुगपर्यन्तमहर्यद् ब्रह्मणो विदुः ।रात्रिं युगसहस्रान्तां तेऽहोरात्रविदो जनाः ॥(sahasra-yuga-paryantam ahar yad brahmaṇo viduḥ rātriṁ yuga-sahasrāntāṁ te 'ho-rātra-vido janāḥ)


Lord Krishna explains the cycle of manifestation (Kalpa) and dissolution (Pralaya) by Brahma and describes the life of the universe as the day and night of Lord Brahma.


He states that a day of Brahma, which is equivalent to 1,000 Maha Yugas, is followed by a night of Brahma, which is also equivalent to 1,000 Maha Yugas.


This forms the core of Vedic cosmology and explains how the universe moves in cycles. The life of the universe (Brahmaand) is linked to the life of the creator, Lord Brahma, and this total lifespan is known as a Maha Kalpa.


A Maha Kalpa, or the life of Brahma, spans 100 years of Brahma.Each Brahma year consists of 360 Ahoratras, and each Ahoratra includes one day (Kalpa) and one night (Pralaya).


One Kalpa or Pralaya is made up of 14 Manvantaras, each ruled by a Manu, the progenitor of the human race.Each Manvantara is followed by a shorter transition period called Manvantara Sandhya.


Every Manvantara consists of 71 Maha Yugas, which is why one Kalpa equals 1,000 Maha Yugas (71 × 14 + 15 Sandhyas).


A Maha Yuga consists of four Yugas—Satya, Treta, Dvapar and Kali—amounting to 43,200 divine years or 4,320,000 human years.


Based on these calculations:

  • 1 Kalpa = 4.32 billion years

  • 1 Maha Kalpa = 311 trillion years


This represents the total lifespan of the universe according to Vedic cosmology.


But where are we in this cosmic cycle?And how many years have already passed since the universe came into existence?


According to Vedic cosmology, we are in the Kali Yuga of the 28th Maha Yuga of the 7th Manvantara (ruled by Vaivasvata Manu), during the 1st Ahoratra (day) of the 51st year of Brahma's life.


This means that the universe has already existed for over 155 trillion years.We are nearly halfway through the life of the universe and still 155 trillion years away from the next Maha Pralaya (final dissolution).


This demonstrates the remarkable depth of Vedic cosmology. When compared with modern scientific understanding – which aligns with parts of it – it suggests that Vedic thought had grasped the scale of cosmic time far earlier.


According to the Big Bang Theory in modern science, the universe began 13.8 billion years ago and has been expanding ever since. Modern science views this expansion as linear and predicts that it will eventually end in the “Big Freeze” or heat death.


Only in the late 20th and early 21st centuries did scientific bodies like NASA and ESA acknowledge that the end of the universe lies trillions of years ahead — a timeframe consistent with some aspects of Vedic thought.


While both Vedic cosmology and modern science agree that the universe has a lifespan extending into trillions of years, their timelines diverge widely. Vedic texts place the universe’s age at around 155 trillion years already passed, nearly 12,000 times more than scientific estimates.


Interestingly, modern science estimates the age of Earth at 4.54 billion years, which is strikingly close to one Kalpa (4.32 billion years) — the “day” of Brahma.


This deep understanding of the universe — its creation, sustenance and dissolution — found in Sanatan Dharma’s Vedic cosmology has endured for millennia. Although often labelled as mythology, the principles it contains reflect a profound and expansive view of cosmic time.


The concept of the Maha Kalpa, spanning 311 trillion years, stands as a testament to a rich intellectual and spiritual heritage, offering a cosmic perspective that continues to inform and inspire global thought on the nature of time and existence.


(The writer is Founder and CEO of Beehive Capital Advisors Private Limited. Views personal.)


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