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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.)

Veteran Actor Manoj Kumar Passes Away at 87


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Legendary Hindi film actor Manoj Kumar has died at the age of 87. He passed away at Kokilaben Dhirubhai Ambani Hospital, where he had been admitted due to heart-related complications. As per the hospital’s medical certificate, a secondary cause of death was decompensated liver cirrhosis.

 

Manoj Kumar, known for his iconic patriotic films, left a lasting mark on Indian cinema with classics such as Shaheed (1965), Upkar (1967), and Purab Aur Paschim (1970). His deep connection with patriotic themes earned him the nickname ‘Bharat Kumar’. Over the years, he also starred in memorable films like Hariyali Aur Raasta, Woh Kaun Thi, Himalaya Ki God Mein, Do Badan, Patthar Ke Sanam, Neel Kamal, and Kranti.

 

In recognition of his contribution to Indian cinema, he was awarded the Padma Shri in 1992 and the prestigious Dadasaheb Phalke Award in 2015.

 

Born as Harikrishan Giri Goswami in what is now Pakistan, Manoj Kumar not only acted but also ventured into filmmaking. In an interview with rediff.com, he recalled how his directing journey began unexpectedly:

 

“I never intended to be a director in the first place. I became one by default when during Shaheed I had to direct the film unofficially. Then Lal Bahadur Shastri raised the slogan of Jai Jawan Jai Kisan. That’s how I made Upkar.”

 

Paying tribute on social media, Prime Minister Narendra Modi shared old photographs of the late actor and wrote:

 

“Deeply saddened by the passing of legendary actor and filmmaker Shri Manoj Kumar Ji. He was an icon of Indian cinema, who was particularly remembered for his patriotic zeal, which was also reflected in his films. Manoj Ji’s works ignited a spirit of national pride and will continue to inspire generations. My thoughts are with his family and admirers in this hour of grief. Om Shanti.”

 

Actor Akshay Kumar, whom Manoj Kumar once referred to as his ‘natural successor’, also shared a heartfelt message:

 

“I grew up learning from him that there’s no emotion like love and pride for our country. And if we actors won’t take the lead in showing this emotion, who will? Such a fine person, and one of the biggest assets of our fraternity. RIP Manoj Sir. Om Shanti.”

 

Speaking about being known as ‘Bharat Kumar’, he told Lehren TV:

 

“Bharat ka to taaj yeh jo bharatwashiyon ne mujhe pehnanya hai woh filmon aur vyaktigat jeewan mein nibhana bahot bada bhoj aur zimmedari hai. Yeh bada upkar hai unka mujpar. Main kitna safal aur asafal hua, woh mere deshwashi jante hai. Main ek sadharan sa nagrik hoon.”(“The crown of Bharat that my fellow countrymen have placed on me is a huge responsibility, both in films and in personal life. It’s a great honour. How successful I’ve been, only my fellow citizens can tell. I am just an ordinary man.”)

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