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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.)

‘Ten pc people have shifted to eco-friendly Ganesh idols’

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Mana Shah, a Mumbaikar, began her professional journey at the age of 16 working alongside her father in their family business. In 2006, she came across a documentary ‘An Inconvenient Truth’, presented by former US Vice President Al Gore. The film opened her eyes to the pressing issue of climate change and highlighted just how little action people were taking. Shah changed her path from there. As a mother of two, she felt a strong urge to step up in the issue of climate change. This led her to develop ideas for ‘Green Practices’, a venture where she could channel her entrepreneurial acumen to promote a sustainable future for upcoming generations. Today, her company is also making big profit apart from working for the environment protection. In a conversation with ‘The Perfect Voice’, Shah shares her ideas behind eco-friendly Ganesh idols and the business around it. Excerpts…


Why did you choose to start making eco-friendly Ganpati idols? What inspired you?

When I started, nearly two lakh households in Mumbai were bringing home Ganesh idols made from PoP and painted with harmful, lead-based colours. Every year, during visarjan, we would see the devastating impact in the form of dead fish, polluted waters, and broken idols scattered across the shore. It was heartbreaking. I felt compelled to ask: if Ganpati is returning to his mother, why are we sending him back in a way that harms Mother Earth? We pray to him with so much devotion, but then let his remains pollute the very waters he came from. So I thought, why not offer a more respectful, meaningful way to bring Bappa home and send him off without causing damage? That’s how the idea of eco-friendly Ganpati idols was born. It was an attempt to make sustainability an integral part of how we celebrate without losing the essence of tradition.


How are your customers reacting to eco-friendly Ganesh idols?

People love them! In the beginning, there was hesitation. Many were concerned about the fragility of clay idols or whether they would break easily. There are strong beliefs tied to idol-breaking, so PoP seemed like the safer choice to them. But once they saw how beautiful, sturdy, and detailed the eco-friendly idols could be, and that they dissolve without harming the environment, they were convinced. And once they switch, they rarely go back. Some of our customers have been coming to us every single year for the last 10–12 years. They also love the fact that visarjan can be done at home in a clean, respectful way.


What is the demand like for eco-friendly Ganesh idols today?

The demand has grown significantly. When we started, we made just 50 idols. Today, we’re crossing the 3,000 mark. That tells you how much the mindset is changing. Ganeshotsav is an emotional, deeply personal festival, especially in Mumbai. More and more people are looking for ways to celebrate that are kinder to the planet. Once they discover that eco-friendly options don’t mean compromising on beauty or tradition, they’re eager to make the switch.

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Do you have any idea of the current market size of eco-friendly Ganesh idols specifically in Mumbai?

Currently, around 2 lakh families in Mumbai bring Ganesh idols home each year. Of these, I’d say about 10 per cent have made the shift to eco-friendly idols. That’s a start, but we still have a long way to go. There’s a growing awareness, and we’re optimistic.


Where do you source your idols from? Do you make the idols yourself or collaborate with others?

Most of the idols are handcrafted in our own workshops. But we also work closely with artisans across Maharashtra, for example, those who specialise in paper mache Ganpati idols. Our goal is to offer a variety of eco-friendly options that suit different households and preferences. The paper mache idols are especially popular among families living abroad, as they’re lightweight, durable, and easy to ship. This way, even those far from home can celebrate Ganesh Chaturthi with the same emotion and reverence.

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