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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.)

Washroom without privacy

Advocate’s outcry exposes crumbling infrastructure at police station

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Thane: A shocking incident has raised serious questions about the basic safety and dignity of women visiting police stations in Thane. On June 4, Adv. Kanchan Ghanshani visited the Naupada Police Station along with her husband regarding an FIR inquiry, only to face a deeply disturbing experience inside the women’s washroom. The toilet, located inside the so-called "Women’s Safety Cell" of the police station, had no internal lock an appalling lapse in a facility meant to serve as a secure space for female visitors and staff.

 

Rather than fixing the lock, police had posted a humiliating notice outside the washroom, asking visitors to “confirm if someone is inside before pushing the door,” due to the non-functional latch. To make matters worse, a female police personnel not in uniform reportedly pushed open the door while Ghanshani was inside, without warning. She described the intrusion as not only indecent but also a violation of basic privacy and human dignity.

 

“What kind of administration has money for air-conditioned officer cabins, but not for a simple latch on a women’s bathroom door?” asked Ghanshani angrily, pointing to the misplaced priorities of the police department. The episode sparked outrage over how fundamental safety infrastructure for women is ignored even in critical government institutions like police stations.

 

Compounding the safety concerns, Ghanshani also pointed out that the electrical wiring for fans and lights in the station’s public waiting area is dangerously exposed a clear threat during the monsoon season. “It only takes one short circuit for a tragedy to happen,” she warned.

 

Adv. Ghanshani has demanded that senior police officials preferably female officers visit the police station and conduct an on-ground assessment of the facilities. Her immediate demands include:

 

When contacted, Senior Police Inspector Abhay Mahajan of Naupada Police Station stated that the bathroom in question did have a lock, but it required extra force to latch. “After we were made aware of the problem, we have ensured that the lock has now been fixed properly,” he added.

 

“This is not just about me,” Ghanshani emphasized, “It’s about every woman who visits a police station and expects basic respect and safety.” Her experience echoes the concerns of countless women who feel unsafe even in spaces meant to protect them. The incident is a stark reminder that ensuring safety goes beyond policing it starts with sensitivity, dignity, and infrastructure that upholds the rights of every citizen.

 

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