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....

min read

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.)

Remove plastic waste stigma

Rajendra Joshi
Aug 18
2 min read

Ganeshotsav offers an opportunity to push for a plastic-free state

Mumbai: Maharashtra generated 4.8 lakh metric tonnes of plastic waste in 2024, the highest in the country. Of this, Mumbai alone contributed 1.2 lakh metric tonnes, official data shows.

To curb plastic use, the Union government had in July 2022 prohibited the manufacture, storage, import, distribution and use of single-use plastics below 120 microns thickness, under the amended Plastic Waste Management Rules, 2021. The law provides for penalties of up to Rs 1 lakh and imprisonment of up to five years.

Despite these measures, plastic waste continues to pile up across cities and villages. Experts say enforcement has remained weak, and unless citizens themselves stop using plastic bags and other banned items, the situation is unlikely to improve. With the upcoming Ganesh festival, environmental groups believe there is a chance to launch a wider public campaign against plastic use.

Health, environmental concerns

Plastic waste is now seen as one of the biggest challenges to human health and the environment in the 21st century. Being non-biodegradable, it blocks natural drainage systems and affects water resources. The chemicals used in plastic manufacturing are known to have harmful effects on health.

Studies in recent years have reported microplastic particles in human organs, while leachates from stored plastic waste have been linked to cancer risks. Environmentalists warn that if plastic continues to cover water bodies, Maharashtra could face a severe water shortage in the future.

Maharashtra’s share

Across India, 9.3 lakh metric tonnes of plastic waste was generated in 2024, with Maharashtra alone accounting for more than half. While laws exist to check pollution — whether water, air or noise — activists point out that implementation remains a major problem. Factories located along riverbanks, many said to be politically connected, often escape action.

The state has spent thousands of crores laying pipelines to bring drinking water from faraway reservoirs, even as local water sources remain polluted. Noise pollution too remains unchecked, with enforcement agencies accused of going soft due to political pressure.

Citizens’ role

Environmental experts say that governments alone cannot solve the problem. Citizens need to change their habits and refuse plastic bags and other single-use products.

If Ganesh mandals across the state take the lead in spreading awareness and ensuring plastic-free celebrations, campaigners believe Maharashtra can move towards becoming plastic-free. A breakthrough in the state, they argue, would significantly reduce India’s overall plastic.

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