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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.)

The Accidental Manager: When Competence Outruns Capability

Most managers weren’t chosen to lead. They were promoted because someone had to.

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The Promotion No One Prepared For. Every small company eventually reaches the awkward middle.


The founder can’t do everything anymore, so the best performers are handed new titles.


They move from doing the work to managing it. And overnight, the organization’s rhythm changes.


At The Workshop … the same design firm we met last week … Meera had just been promoted.


She’d been the backbone of every project: dependable, detail-obsessed, the one who fixed what others missed.


The founder called her into his office and said, “You’ll lead the design team now.


You’ve earned it.” She smiled, said yes, and stayed late that night out of pride.


Two weeks later, she was staying late again … but this time out of confusion.


The Shift Nobody Named

On paper, nothing had changed. Same office. Same colleagues. Same projects. But now, the people who used to brainstorm with her waited for “instructions.” Her inbox filled with questions she didn’t know how to answer.


Her calendar filled with meetings that didn’t move work forward. By month’s end, she wasn’t designing anymore. She was approving, mediating, firefighting.


No one had done anything wrong. But everyone was suddenly off-beat. This is how most leadership layers are born not by design, but by necessity. Competence gets mistaken for readiness. Performance becomes a proxy for potential. And somewhere between enthusiasm and exhaustion, a new creature emerges in every growing team: the accidental manager.


Why Good Performers Struggle

The problem isn’t talent. It’s translation. High performers are wired to fix things themselves. Managers are meant to help others fix things. That’s not a small jump; it’s a psychological migration. But no one tells Meera that.


Her founder assumes she’ll “figure it out.” Her team assumes she already knows. Caught between admiration and expectation, she learns to improvise authority. Soon she’s trying to be everyone’s buffer and everyone’s boss. The team starts avoiding her not because they dislike her, but because they sense her uncertainty.


She starts avoiding them because every conversation now feels like confrontation. This is how chaos enters quietly … not through rebellion, but through inexperience.


The Skill–Role Gap

In most growing companies, the first layer of managers carries the highest invisible risk. They’re skilled enough to lead but untrained to manage. They understand deliverables, not dynamics. They can control outcomes, but not energy.


And because the system hasn’t caught up. No check-ins, no review rhythm, no clear handoff rules … everyone ends up guessing. The founder feels the team is “losing discipline.” The team feels the founder is “micromanaging again.”


Both are right, and both are tired. What’s really broken isn’t intent. It’s scaffolding.


The Reframe

Leadership isn’t a promotion. It’s a change in identity. A good manager doesn’t stop doing work; they start shaping the conditions where work gets done better. They replace intensity with rhythm, pressure with process, instinct with insight. And none of that happens by accident.


Yet in most organizations, the phrase “we’ll train them later” is where growth begins to fray. Because by the time you notice management chaos, it’s already culture.


The Human Moment

One evening, Meera stayed back after everyone left. She opened her laptop, stared at the half-finished design she hadn’t touched since her promotion, and whispered to herself, “I miss being good at my job.”


That line stays with me every time I meet a first-time manager who feels lost inside a title they never trained for. They didn’t fail upward. They were just never taught how to turn authority into rhythm.


The Quiet Reflection

The accidental manager isn’t the villain of growth; they’re its first casualty. They expose the gap between what a company celebrates and what it sustains. Between rewarding effort and equipping evolution.


If The People Paradox began with emotional drift, this chapter is about functional drift, the point where good intentions collide with missing design.


(The writer is co-founder at PPS Consulting. He helps growth-stage leaders design systems where people and performance evolve together. Views personal.)

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