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By:

Kaustubh Kale

10 September 2024 at 6:07:15 pm

How wealth creation is beyond chasing returns

When we talk about personal finance and investing, most conversations revolve around returns. How much did an investment make last year? Which asset is performing best right now? But seasoned investors know that wealth creation is not just about chasing returns. It is equally about understanding risks, especially the ones that quietly derail long-term financial goals. Whenever you invest in any product or asset class, there are three important risks you must analyse before committing your...

How wealth creation is beyond chasing returns

When we talk about personal finance and investing, most conversations revolve around returns. How much did an investment make last year? Which asset is performing best right now? But seasoned investors know that wealth creation is not just about chasing returns. It is equally about understanding risks, especially the ones that quietly derail long-term financial goals. Whenever you invest in any product or asset class, there are three important risks you must analyse before committing your money. The Risk of Temporary Volatility The first and most visible risk is temporary volatility. This refers to short-term fluctuations in the value of an investment. Assets like equities, equity mutual funds, gold, and real estate can move up and down over short periods. Prices may rise, fall, recover, and remain volatile for some time. This volatility often creates anxiety because losses appear on paper, even though nothing permanent has happened. Importantly, temporary volatility does not mean the investment is bad. It simply reflects market cycles or short-term sentiment. What investors must understand is that temporary volatility is largely outside their control. Reacting emotionally to these movements often leads to poor decisions, such as exiting good investments at the wrong time or losing out completely on eventual opportunity gains. The Risk of Permanent Loss of Capital The second risk is far more serious - the risk of permanent loss of capital. This occurs when there is a possibility that you may lose a part of your capital or, in extreme cases, the entire amount permanently. Examples include speculative options buying, investing in junk stocks based on tips, or investing in real estate with questionable legal titles or assets that eventually find no buyers and become highly illiquid. In such cases, the money does not recover with time. Once lost, it is lost for good. Before investing, it is critical to ask a simple question. Is there a scenario where my capital can be permanently destroyed? If the answer is yes, that investment demands far higher scrutiny and strong risk control. The Risk of Not Beating Inflation The third risk is extremely critical and most ignored - the risk of not beating inflation. Inflation quietly erodes purchasing power over time. If your investments do not grow faster than inflation, your wealth may increase in numbers but decline in real value. Many so-called safe investments fail this test. While they may protect capital, they may not help you achieve long-term goals such as retirement, children's education, or financial freedom. This risk is often ignored because it does not show up immediately. But over long periods, it can significantly reduce your probability of achieving financial goals. Where Should Investors Focus? Temporary volatility will always exist and should not be the primary concern. Instead, investors should focus on avoiding permanent loss of capital and ensuring their investments beat inflation over the long term. Successful wealth creation is not about eliminating risk completely. It is about choosing the right risks and avoiding the wrong ones. (The author is a Chartered Accountant and CFA (USA). Financial Advisor.  Views personal. He could be reached on 9833133605.)

Lingua Pragmatica

Updated: Mar 20, 2025

As Southern leaders like M.K. Stalin rage against Hindi, Andhra Pradesh’s Chief Minister Chandrababu Naidu offers a model of pragmatism over parochialism.

Chandrababu Naidu
Andhra Pradesh

Amid the cacophony of opposition in southern states to Hindi, Andhra Pradesh CM N. Chandrababu Naidu has taken a markedly pragmatic stance by remarking recently in the state Assembly that there was no harm in learning other languages. Hindi, Naidu noted, was useful for communication across India, particularly in political and commercial hubs like Delhi. His remarks, though avoiding explicit mention of the NEP, were widely seen as an endorsement of multilingualism and a rebuke to the linguistic chauvinism that has gripped parts of the South.


Few issues in India stir political passions quite like language. It is not merely a means of communication but a marker of identity, a relic of colonial resistance, and a source of political mobilization. In the southern states, where anti-Hindi sentiment has long been entrenched, the National Education Policy (NEP) 2020 and its three-language formula have reignited old tensions. No state embodies this defiance more than Tamil Nadu, where the ruling Dravida Munnetra Kazhagam (DMK) led by M.K. Stalin has framed the policy as an assault on its linguistic autonomy.


Naidu’s words, welcomed by his ally and Deputy Chief Minister Pawan Kalyan, mark a sharp contrast with the DMK’s position. Tamil Nadu’s hostility towards Hindi dates back to the 1930s, when C. Rajagopalachari’s attempt to introduce it in schools met with fierce resistance. The anti-Hindi agitations of the 1960s cemented the DMK’s ideological stance, with its first Chief Minister, C.N. Annadurai, famously warning that Hindi imposition could push Tamil Nadu towards secession.


The question, however, is whether this rigid opposition serves Tamil Nadu’s interests. While Stalin, with an eye to the upcoming Tamil Nadu Assembly polls, has been relentlessly portraying Hindi as a threat to his state’s regional identity, Naidu, a partner of the BJP-led Centre, is framing it as a tool for economic mobility. His argument is not that Hindi should replace Telugu or English but that it offers a competitive advantage.


The economic case for multilingualism is compelling. Indians who speak multiple languages tend to have better job prospects, higher earnings and greater geographic mobility. Andhra Pradesh’s Telugu-speaking diaspora is a case in point. Telugus make up a significant proportion of Indian-origin professionals in the United States, the Gulf, and Southeast Asia as Naidu pointed out, hinting that this success story was built not on linguistic rigidity but on adaptability.


In a country where inter-state migration is rising and where Hindi remains the most widely spoken language, refusing to learn it amounts to self-imposed isolation. Tamil Nadu’s approach, by contrast, risks limiting its youth. The DMK government has refused to implement the three-language policy, keeping schools strictly bilingual with Tamil and English. Its justification that Hindi is not necessary for global success could be true in a narrow sense but ignores the domestic context. If Tamil filmmakers can dub their movies into Hindi to expand their audience, why should Tamil students be denied access to the language that could open more doors for them within India?


The DMK has accused successive central governments, particularly under the Bharatiya Janata Party (BJP), of pushing Hindi at the expense of regional languages. Yet, rejecting Hindi outright is an overcorrection. The reality is that Hindi is an important language in India’s economic and political landscape. Naidu’s position, one of accommodation rather than confrontation, offers a middle ground that other Southern leaders would do well to consider.


Some states already recognize this. Karnataka, despite its own history of linguistic pride, has allowed Hindi to be taught as an optional language. Kerala, whose migrants work in Hindi-speaking regions and the Gulf, has been less hostile to Hindi education. Naidu’s model, balancing regional identity with practical necessity, offers a way forward. Languages should be embraced, not politicized. Southern leaders would do well to listen to him.

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