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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.)

Why ‘Final Solution Should Be Discussed?

Final Solution

Some time ago, Anand Patwardhan, a documentary filmmaker chose the documentary Final Solution (2004) among “Ten Greatest Films of All Time” for Sight And Sound (BFI) placing it alongside brilliant works by several filmmakers across the world. Rakesh Sharma’s first reaction to the news was, “I never imagined that any of my films would ever be spoken of in the same breath as Patricio Guzman’s Battle for Chile, Wintonick’s Manufacturing Consent, John Pilger’s The War You Don’t See, Michael Moore’s Bowling for the Columbine or Avi Mograbi’s Avenge But One of My Two Eyes.” Earlier, Final Solution had won the Wolfgang Stautde Award (for Best Feature-length Film at Berlinale 2004 at its premiere, that no documentary ever won before or ever since.


Rakesh Sharma needs no introduction to Indians who have been following the human rights movement in the media. But Final Solution is not the beginning, and most certainly not the end of his journey that established him as one of the most outspoken and independent filmmakers who makes a strong statement against any violation of human rights. He fights with the powers-that-be and he fights with the censor board. His numerous awards won at international film festivals have not gone to his head. Rather, they have strengthened his determination to go ahead and make his statement in the best Aftershocks marked his return to documentary after a gap of 10 years. Though, today, Rakesh is better known for Final Solution that had to fight through a censor ban, he made an equally strong and powerful film, Aftershocks, before Final Solution.


Final Solution is a study of the politics of hate. Set in Gujarat during the period Feb/March 2002 - July 2003, the film graphically documents the changing face of right-wing politics in India through a study of the 2002 carnage in Gujarat in Western India. It specifically examines political tendencies reminiscent of the Nazi Germany of early 1930s. About what motivated him to make Final Solution, Rakesh says, “Post-911, we live in a world where politics of hate and intolerance has gained mainstream acceptance, even grabbed centre stage. The ‘War on Terror’ dominated the electoral discourse in the US presidential elections, with both candidates promising to hunt ‘em and kill ‘em better than the other.


The right wing seems to be tightening its stranglehold across Europe as well, a nationalism being fuelled by the anti-immigrant/anti-Moslem rhetoric. In a world where it has become legitimate to use fictitious intelligence to justify the bombing of innocents in Iraq, where it has become acceptable to launch precision bombs and rockets against non-“embedded” journalists, where shameless politicians divide up oil wells and farm out reconstruction contracts for their $36 million bonuses, where babies are killed and mutilated as acceptable “collateral damage”, we face a challenge greater than ever before. We have earlier lived through many dark periods in history, often justifying our barbarism by using similar rhetoric. Hate, despair, destruction and tragedy cannot possibly be the foundations of harmonious societies and a democratic world.


The Censors banned it but finally cleared it for public screening on the ground that it could incite communal flare-ups. Sharma had appealed to the board to send the film for a review. The Censor Board had previously said, “The film promotes communal disharmony among Hindu and Muslim groups and presents the picture of Gujarat riots in a way that may arouse communal feelings and clashes. Certain dialogues involve defamation of individuals. The entire picturisation is highly provocative.” But when the was shown on October 7, 2004, to the high-profile revising committee comprising Censor Board chairperson Anupam Kher, filmmaker Shyam Benegal, activist Teesta Setalvad, theatre personality Dolly Thakore and filmmaker Ashok Pandit, they said the film could be released without any change. The film has won the prestigious Wolfgang Staudte Award at the Berlin International Film Festival, where it also won the Special Jury Award.


One of the citations by one of the many awards the film has bagged goes like this. “It is an epic documentary focusing on a culture of hatred and indifference in the region of Gujarat, India. The simplicity, clarity and accuracy of the film enable viewers to reflect on the universality of the subject matter and to relate their own human attitudes to it. The filmmaker has chosen a documentary form that completely shuns the use of melodramatic effects and thus makes a stand against the omnipresent “infotainment; industry.”


His financial status though, is not even half as impressive as his grit, his string of awards and his fearlessness. “As a filmmaker, I am extremely poor. My savings have more or less run out. But I do not know what else to do except make films. I am improvising all the time with the tools I know a bit about, such as films and video, so that lack of funds does not become a serious block. I would love to make a funny documentary or a social-anthropological film on romance in changing times. I would to make a murder mystery too, and to play with a form where documentary and fictions merge, moving in and out seamlessly. But I have no choice when I meet people with sorrow in their eyes and hollowness in their spirits. So, I continue to remain an interventionist when something agitates me.”

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