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.)

The People Paradox: When Teams Stop Behaving Like Families

ree

Over the next few weeks, I’ll explore the invisible side of growth: people.

Not the spreadsheets, not the strategy decks … but the quiet human mechanics that decide whether a company truly scales or quietly stalls. These essays won’t offer full-stop solutions. They’re observations, patterns, lived confessions from years of watching teams evolve and drift. If the Cognitive Load Trap series exposed how systems overload the mind, this series turns the lens outward to the unpredictable world of human behavior inside those systems.


The Drift

Every company that grows begins with warmth. A handful of people sitting too close, finishing sentences, staying late not because they must but because the dream feels shared. Someone jokes, “We’re like a family here,” and everyone nods, half-embarrassed, half-proud.


But somewhere between the fifteenth hire and the fiftieth, something shifts. Deadlines replace dinners. Updates replace conversations. The same word ‘family’ starts to sound like a promise the company can’t keep. No one betrays anyone. The drift is quieter than that.


The myth

The idea of family culture was born in a world where families themselves were predictable. Fathers, sons, cousins worked together, argued together, retired together.


Loyalty was inherited. Conflict was seasonal, not existential. That world is gone.


Today’s families are nuclear, migratory, practical. We love each other, but we also outgrow each other’s dreams. Affection no longer guarantees alignment. Yet many businesses still chase that nostalgia … trying to freeze a vintage idea of togetherness in a generation that prizes autonomy.


The result is confusion on both sides: leaders wondering why loyalty feels fragile, and teams wondering why care comes wrapped in control.


New Reality

Workplaces today are emotional hybrids. People want safety and freedom, mentorship and mobility, structure and space. They join for purpose, stay for momentum, and leave when growth feels asymmetrical. It isn’t disloyalty. It’s evolution.


The same independence that makes people ambitious also makes them transient. And so, every growing business faces the same paradox:


When Care Turns into Control

At one design firm … let’s call it The Workshop … the founder still spoke the language of family. “We take care of our own,” he’d say proudly. But for younger managers, the word felt loaded. It meant unpaid overtime, emotional policing, and decisions made “for your own good.”


They didn’t want to be his children. They wanted to be his colleagues. When one senior designer resigned, her note said, “I didn’t leave because I stopped caring. I left because caring here meant never being free.” That line stayed with me. Because that’s what happens when affection outlives alignment.


Hidden Cost

Leaders who cling to the old family metaphor unknowingly create two kinds of fatigue:

  1. Emotional fatigue: constant closeness leaves no room for honest distance.

  2. Cultural fatigue: every disagreement feels personal instead of professional.


The more a company insists on being a family, the harder it becomes to have the conversations real families avoid … about accountability, mismatch, and change.


Family to Tribe

Maybe it’s time to retire the word. A company isn’t a family anymore. It’s a tribe, a moving formation of people who travel together while their purposes align. Tribes evolve. Members join, contribute, move on, sometimes return. What keeps a tribe alive isn’t blood; it’s direction.


The leader’s role isn’t to hold everyone forever. It’s to make the journey worth staying for.


Final Reflection

The People Paradox isn’t about blame. It’s about seeing that modern humans no longer fit inside old metaphors. Teams aren’t families. They’re living ecosystems … breathing, rotating, constantly renegotiating why they stay. And that’s not decline. That’s evolution.


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

Comments

bottom of page