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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.)

Principal’s dismissal sparks protests

Updated: Mar 21

Archana Mohite

Dombivli: Parents and students staged a massive protest outside Greens English School in MIDC, Dombivli, after the abrupt termination of Principal Archana Mohite by the school administration. Mohite, who had served as the principal for over a decade and received the Best Principal Award, alleged that she was dismissed for opposing the administration’s arbitrary decisions.

Speaking to 'The Perfect Voice', Mohite stated that she was given just 48 hours to respond to an official notice. Despite submitting her reply, she received a termination letter via courier on March 18, declaring that she had failed to respond within the stipulated time. The letter also warned her against entering the school premises from the next day.


Mohite further claimed that the school management had installed high-quality audio-visual surveillance cameras in her cabin without her consent, violating her right to privacy. “These cameras allowed people to monitor me remotely, which is a serious legal offense. Even as a woman, my privacy was completely disregarded,” she said.


She also accused the administration of failing to follow due process. “Even a criminal is given a chance to present their case, but I was terminated without any inquiry, discussion, or a hearing with the management,” Mohite added.


Mohite mentioned that the school’s management is currently under dispute, with legal cases pending before the Charity Commissioner. She claimed that individuals with no legal authority were exerting pressure on her and interfering in school matters. “I was caught between two conflicting committees. The rightful management should take charge instead of creating confusion and harassment.”


She alleged that in December, a newly appointed teacher-still under probation-was given undue preference over experienced teachers with 25-30 years of service. However, the school’s governing body has refuted Mohite’s claims. Shirish Deshpande, Vice President of Dombivli Progressives, stated that Mohite had submitted false educational credentials and misled the institution.

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