top of page

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.)

Punjab’s Unbroken Spine

ree

My name is Punjab, the land graced by five mighty rivers. My story is one of resilience, woven deeply into India's fabric since 1947, a year that marked both heartbreak and hope. The trauma of the Partition ripped through me, leaving scars that time has not erased. Yet, I rose from those ashes to cultivate my fields once again. The Green Revolution flourished here, transforming me into the breadbasket of India.


Though I lost my beloved city, Lahore, I embraced change and built Chandigarh, a modern capital designed by Le Corbusier, symbolizing a fresh start after partition. Though my territory shrank and my claim on the five rivers diminished, my people steadfast. Hindus and Sikhs-stood firm. Their courage is etched in the history of the Punjab Regiment, Sikh Regiment, and Sikh Light Infantry, which bravely defended the nation's borders through wars and conflicts


My citizens, though making up just about 2.37 percent of India's total population, have contributed immensely to the nation’s freedom struggle. Sikh freedom fighters, though a small community, bore a disproportionate burden. Leaders like Bhagat Singh, Udham Singh and Kartar Singh Sarabha led revolts, inspired by the Gurdwara Reform Movement and Ghadar movement, fighting fiercely against colonial rule.


My essence is shaped by the spiritual teachings of Guru Nanak and the inclusive faith of Sufis, who taught love, peace, and equality. But today, I ask not for division but for justice, for peace, and a better future for my children.


To facilitate visits from Indian pilgrims to the holy shrine of Gurdwara Darbar Sahib Kartarpur in Pakistan. Prime Minister Narendra Modi and Pakistan's counter parts on November 9, 2019, coinciding with the 550th Prakash Purab of Shri Guru Nanak Dev Ji. And renewed in 2024, stands as a poignant symbol of connection, allowing Sikh pilgrims from India to visit the sacred Gurdwara Darbar Sahib in Narowal, where Guru Nanak Dev Ji spent his last eighteen years. This corridor includes a modern highway and immigration facilities, fostering peace and cultural unity between India and Pakistan.


The principles of Guru Nanak Dev Ji-Naam Japna (focused remembrance), Kirat Karni (honest labour), and Vand Chakna (sharing with others) are not just spiritual ideals they are the foundation of a thriving, harmonious society.


The creation of Haryana from my land and the contentious sharing of Chandigarh as a Union Territory have been painful wounds. The darkest chapter came during two decades of militancy, yet my spirit, called Chardi Kala remained unbroken.


That period was marked by a grim proxy war waged by Pakistan through the Khalistan movement, ravaging my lands with violence and economic hardship. The Centre’s failure to adequately support the counterinsurgency forces left me burdened with debt that will weigh on future generations General Zia-ul-Haq's strategy of “a thousand cuts will bleed India” epitomized the persistent strain placed upon me. The policies of late Prime Minister Indira Gandhi, initially fostering Bhindranwale and later suppressing the movement, deepened my wounds. The legacy of that period persists, when corruption entrenched itself as a centralized system. According to the National Crime Records Bureau (NCRB), corruption cases in Punjab rose by 13.2 percent in 2021, following a negative growth of 15.3 percent two years earlier.


But I am Punjab. Through blood and sacrifice, through hardship and renewal, I endure. I call on India to treat me with the justice and respect I deserve. For I am not separate from this nation - I am its heart, its guardian and its undying spirit. I am the land of five rivers, forever flowing strong within the soul of India.


(The writer is a former journalist and Vice-President, Punjab BJP unit. Views personal.)


Comments

bottom of page