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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.)

London’s Vanishing Safety

The global metropolis’ charm and civility can no longer mask a creeping sense of insecurity in Britain’s capital.

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The first thing that strikes you about London (or any part of Britain for that matter) isn’t its weather or its wit but its manners. People apologise when you bump into them. They thank the bus driver. They greet strangers with disarming warmth. Yet, beneath this veneer of civility, a sharper and more disquieting truth lurks: London, the city that prides itself on courtesy and order, is no longer the safe haven it imagines itself to be.


That realisation hit home once again when a train near Cambridge (in eastern England) became the scene of a string of stabbings. Following the shocking incident, the police ruled out terrorism but the attack rekindled a growing fear that violence has seeped into the fabric of everyday life. For a nation that once wrapped itself in the illusion of safety, such incidents have become uncomfortably common.


Which brings us to a more unsettling question: when people dream of moving abroad - to London, Paris or New York - do they ever ask how safe those dreams really are? The illusion insists these cities are among the safest in the world. The data says otherwise.


According to the 2025 Crime Index published by Numbeo, Abu Dhabi tops the list of the world’s safest cities, followed by Doha, Dubai, Sharjah, Taipei, Manama, Muscat, The Hague, Trondheim and Eindhoven. London, astonishingly, does not even make the top 100. Meanwhile, in a sobering twist for those who assume the West guarantees security, Islamabad ranks 77th and Vadodara in India comes in at 79th.


London’s crime record is complex. Its strict gun laws mean shootings are rare, unlike in America. Yet, theft, shoplifting and knife crime have all surged. The statistics are impersonal; the reality, much less so. I saw it for myself as a student in London in 2012.


At my university’s orientation, the welcome note came with a warning: avoid displaying expensive phones; keep at least ten pounds on you to placate potential muggers; never walk alone after dark, particularly in Croydon or Hackney. Passports, we were told, were to be guarded like family heirlooms. It reminded me of an old Marathi admonition - “Saat chya aat gharat” (be home before seven). I had flown thousands of miles, only to find the same rule applied here, too.


At first, I dismissed these cautions as paranoia. Within a week, I learned otherwise. A note taped to a hostel door read: “Whoever stole my laptop, please leave a backup of my project work outside. It’s a request.” In our shared kitchen, food was carefully labelled, and signs pleaded: “Kindly do not eat my food without permission.” Civility, I discovered, was not the absence of wrongdoing but was merely a polite way of negotiating distrust.


That lesson turned brutal when my cousin was surrounded by a gang one evening and beaten for having no cash. Encounters with drug users on the Tube, or being followed by homeless men high on substances, became part of the London experience. Once, while filming a protest of rough sleepers for an assignment, a drunk man snatched my camera and mocked me in the middle of a busy street even as the crowd quietly looked away.


Britain runs on etiquette. “Sorry” and “thank you” lubricate daily life. But in London, politeness often coexists with unease. It masks fear, not always kindness. Behind every warm smile is a quiet awareness that things can turn violent fast.


Even Sadiq Khan, London’s mayor, concedes the crisis. In August, he admitted that while knife crime had fallen by 19 percent between April and June compared to the same period last year, other offences like rape, drug trafficking and possession of weapons had soared. Over the past decade, recorded crime in the Metropolitan Police area has risen by 31.5 percent, with violent crime up by 40 percent. London, he said, still had “a long way to go.”


That long way is what haunts me whenever I walk its streets. The grandeur of Westminster and the hum of Soho coexist uneasily with the boarded-up shops of the East End. Tourists admire the architecture; locals glance over their shoulders.


London remains one of the world’s most desirable cities. It is undeniably vibrant, creative and endlessly alluring. But it is also a city of contradictions: where good manners cannot always hide fear, and where safety has become as fragile as the courtesy that defines it.

1 Comment


This piece highlights real concerns about safety — and that rings especially true when thinking about student accommodation in London. With a growing shortage of safe, affordable options and rising incidents of theft and general insecurity, students need more than just a seat in a hall — they need a secure roof above their heads. It’s alarming how ‘living away for studies’ is becoming a stress of safety and survival rather than education.

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