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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.)

Plane crashes two min after take-off

  • PTI
  • Jun 12
  • 3 min read

Authorities say chances of survivors slim. Former Gujarat CM Vijay Rupani among the passengers

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Ahmedabad: An Ahmedabad-London Air India plane carrying 242 passengers and crew crashed into a medical college complex here minutes after takeoff on Thursday, possibly killing all on board in one of the country's worst air tragedies.


There was no official count of those killed even hours after the Boeing 787 Dreamliner (AI171) crashed in the city civil hospital and BJ Medical College near the Sardar Vallabhbhai Patel International Airport and burst into a ball of fire.


As rescuers struggled to find survivors in the charred wreckage and pull out the injured, many of them with grievous burns, officials tried to assess the human magnitude of the disaster. Unofficial reports said chances of survival of those on board were remote and up to 25 people in the medical complex could also have died.


The pilot of the twin-engine wide bodied aircraft issued a 'Mayday' distress call, denoting a full emergency, soon after takeoff at 1.39 pm, the Air Traffic Control at Ahmedabad said.


The search was also on for the aircraft's black box -- the flight data recorder and cockpit voice recorder -- for clues to understand what happened in the last crucial moments.


The 11-year-old aircraft could be seen from miles away, losing altitude rapidly and combusting in a fiery blaze that sent plumes of thick black smoke spiralling up in the air.


The aircraft climbed just about 600-800 feet before plummeting to the ground almost immediately, aviation sources said.


Former Gujarat chief minister and BJP leader Vijay Rupani was among the passengers on the doomed flight to London's Gatwick airport.


“The aircraft departed from Ahmedabad at 1339 IST (0809 UTC) from Runway 23. It gave a MAYDAY Call to ATC, but thereafter no response was given by the aircraft to the calls made by ATC,” according to a statement from the Directorate General of Civil Aviation (DGCA).


Visuals from the wreckage area showed bodies being pulled out and the injured, many with burns, wheeled into the city civil hospital close by.


Intense blaze

Eyewitnesses in Ahmedabad said the blaze was so intense that it led to several multi-storey buildings being burnt, trees singed and cars damaged. One image showed the snout of the plane crashing through the top floor of a building that appeared to be a dining area of the hostel of nurses and doctors.


Elsewhere too, there were scenes of complete devastation with mangled metal of the wreckage, snarls of tangled wire and smoke rising from burning embers.


Airport operations in Ahmedabad were temporarily suspended and resumed towards the evening.


The shock of the disaster echoed through political corridors in India and abroad with heads of states and others offering their condolences.


The incident

The ill-fated flight was under the command of Capt Sumeet Sabharwal along with First Officer Clive Kundar. While Sabharwal has 8,200 hours of flying experience, Kundar 1,100 hours, the DGCA said in a statement.


Immediately after departure from Runway 23, the aircraft fell on the ground outside the airport perimeter, it said.


“On Jun 12, 2025, Air India B787 Aircraft VT-ANB while operating flight AI-171 from (Ahmedabad to Gatwick) has crashed immediately after takeoff from Ahmedabad," the statement said, adding that they were 242 persons on board, including two pilots and 10 cabin crew.


Several eyewitnesses on the busy, everyday afternoon described the horror of what they had seen.


“The plane was flying very low and it crashed into the residential quarters of doctors and nursing staff of civil hospital and BJ Medical college,” Haresh Shah told PTI.


“There are several five floor buildings which are residential quarters of doctors and nursing staff. Many people in those apartments were injured as along with the plane the buildings also caught fire,” he said.


Another said several cars and vehicles parked in the premises also caught fire.


Aircraft maker Boeing said in a statement that it is in contact with Air India and stands ready to offer any support to the Tata-owned airline.


Thursday's tragedy is the second major air disaster in Gujarat's principal city.

On October 19, 1988, an Indian Airlines plane crashed in its final approach to the Ahmedabad airport, killing 130 people.


First Boeing crash

This is the first crash involving the Boeing Dreamliner, feted for its advanced features. It is also India's second biggest air disaster since 2020 when an Air India Express flight skidded off a wet runway while landing at Kozhikode in Kerala and split into two. Of the 190 people on board, 21, including two pilots, lost their lives.


242 – Passengers and crew on the ill-fated plane

25 – No of feared casualties at hostel complex where the plane crashed

230 passengers: 169 Indians, 53 British, 7 Portuguese, 1 Canadian.

2 pilots, 10 crew members

600-800 – Feet of height the aircraft climbed before plummeting to the ground almost immediately

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