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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.)

Public funds up in smoke

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Ambernath: Despite spending over 1.32 crore on the construction of an eco-friendly crematorium in Ambernath, the facility remains non-operational even after more than a year of completion. Citizens continue to use the old system and are being forced to pay for cremation services that are officially supposed to be free sparking serious public anger and raising questions over mismanagement and possible corruption.


Local resident Vikas Ingle, while speaking to The Perfect Voice, revealed a shocking experience. “My sister-in-law passed away on June 1, and when we went for her cremation, staff at the crematorium openly demanded money. I was told services are free, but I had to pay, and I even have the receipt. The new facility is not operational, and the quality of construction is extremely poor. It clearly suggests a nexus between officials and contractors,” he alleged. Ingle further demanded strict action against those responsible and urged the authorities to open the new crematorium to the public at the earliest.


Ambernath Municipal Council's Chief Officer Umakant Gaikwad claimed that the new eco-friendly cremation facility is fully functional and free for public use. However, this statement was directly contradicted by the Health Officer Suhas Sawant, who admitted that only one unclaimed body had been cremated during a trial run. He added that operational responsibility still needs to be handed over to a managing agency. Sawant also noted that critical infrastructure such as flooring, construction of platforms, and protective roofing to prevent water ingress is still incomplete.


These conflicting statements have fueled further frustration among residents, highlighting the lack of coordination within the municipal administration. More importantly, it points to possible misuse of public funds, especially since the work order issued on 5/10/2023, stipulated that the project be completed within 90 days. Yet, nearly 18 months later, the facility remains incomplete and unusable.


The delay in launching the eco-friendly cremation system is not only seen as a serious administrative lapse but also as a moral failure, given the sensitive nature of the service one that deals with the final rites of the deceased. Citizens are demanding accountability, transparency, and swift completion of the project to prevent further emotional and financial burden on grieving families.

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