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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.)

Whatever life is destined is destined: Salman on death threats and security

  • PTI
  • Mar 27
  • 2 min read

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Mumbai: "Jitni umar likhi hai, utni likhi hai," a philosophical Salman Khan said in his first comments about death threats from the Lawrence Bishnoi gang and the heightened security that has significantly restricted his movements.


The security protocol has impacted his daily routine, Khan told reporters on Wednesday night.


"Bhagwan, Allah sab unpar hai. Jitni umar likhi hai, utni likhi hai. Bas yahi hai. (It is up to Bhagwan, Allah. Whatever life is destined is destined. That's all)," Khan said in a rare interaction in which he opened up about his personal life and the many challenges after the death threats.


"I cannot do anything about it (security). Khallas. So I go from Galaxy (home) to shoot to Galaxy, no detours," he added.


The 59-year-old could earlier be seen cycling around the city unhindered by his security team.


His security concerns escalated in 2018 when incarcerated gangster Bishnoi openly threatened to kill him during a court appearance in Jodhpur over the actor's involvement in the infamous 1998 blackbuck poaching case


Since then, Khan has faced multiple threats. In April 2024, two shooters, allegedly from the Bishnoi gang, fired gunshots outside his Bandra residence before being arrested.


After this, security was enhanced with bulletproof glass protecting his balcony and CCTV cameras keeping watch on the road outside. Two months later, Navi Mumbai Police claimed to have discovered a plot to kill the actor when he travelled to his farmhouse at Panvel near Mumbai.


Security around the actor was further tightened following the murder of politician Baba Siddiqui, who was known to be a close friend of Salman, in October 2024.


Asked about the elaborate security around him, Khan said, "You guys are sweet; that's why they are sweet to you. I don't wish for them to be sweet with those people who are not sweet."


"It's not when I'm with the press, but when I'm without the press. This (security) cramps my style," Khan said in the interaction ahead of the release of his film "Sikander" this Sunday

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