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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.)

‘Women do not want to be a doormat anymore’

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While cases of violence against women, often rooted in patriarchal norms, are sadly commonplace, incidents in which women are the perpetrators, particularly of murder, are rarer and more jarring. When such cases do arise, society tends to search for justifications: was it self-defence? Was she provoked? In an exclusive interview with Ruddhi Phadke, News Editor, The Perfect Voice, noted psychiatrist Dr. Harish Shetty discusses the psychology of murderers and the evolving societal response to women who kill.


Are cases of women plotting murders on the rise?

Violence and valour are not new to women. Many have fought for independence, using both to drive out the Portuguese, Dutch, British and others. It is well known that women possess a masculine side - one that has always existed. History is replete with female warriors and freedom fighters who have taken up arms for a cause. Today, however, that masculinity is sometimes expressed through meaningless and unreal violence, which can harm not only others but also the women themselves.


Is there a change in society’s reaction to women murdering men?

Cases of women murdering men have always existed. In the past, however, such acts were often committed in response to atrocities such as abusive husbands, and courts tended to show leniency. Today, the dynamics appear to be shifting. The masculinity in women is no longer used solely for self-protection but, at times, to inflict harm. The stereotypical belief that women are passive and incapable of killing is steadily eroding. That said, it is important to note that women continue to face far more violence than men. The ratio is still roughly 100 to 1. The growing attention to female perpetrators is also telling; society often finds it more compelling to discuss a woman who kills than a man who does. Nevertheless, the NCRB data for 2023 is expected to show a rise in crimes against women, with Uttar Pradesh likely topping the list.


Your thoughts on the recent murder of the former DGP of Karnataka?

The murder of the former DGP is, quite frankly, unbelievable. His wife stabbed him multiple times, a shocking act in itself. It is no longer valid to assume that only a psychopath is capable of murder. Increasingly, even seemingly ordinary individuals are taking such drastic steps. This is, of course, a high-profile case and the investigation will proceed in due course. But it is essential to ask: what compelled the woman to act as she did at that particular moment? The analysis must take place within the context of contemporary social norms, not outdated frameworks. That said, I must admit there are countless individuals including women, who may harbour psychopathic tendencies hidden in plain sight within families and communities, waiting for the right conditions to emerge.


What is the psychology behind choosing murder over divorce or a police complaint?

We must recognise that modern life breeds alienation and equanimity. The ability to remain calm and think through one’s actions is increasingly rare. In the Stone Age, humans responded to threats through the amygdala - fight or flight. If a tiger appeared, the brain chose one of those two responses instantly. But over time, as the human brain evolved, particularly the prefrontal cortex, we became more mindful and less impulsive. This ‘newer’ brain allows us to pause, reflect and respond with reason. Unfortunately, in today’s world, that capacity is being eroded. Emotional hijacking has returned with a vengeance. People react before they think, often with devastating consequences.


Is there a shift in the psychology of women in Indian society?

Yes, certainly. Women today are asking for more as they no longer want to be treated as doormats. They seek emotional, physical and psychological fulfilment. But in this pursuit, many are overtaken by speed and emotional volatility, leading to poor judgement. For instance, a woman might believe her boyfriend will care for her forever, and when reality doesn’t match that belief, the emotional rupture can be extreme. This kind of faulty judgement can lead to emotional fragility and in extreme cases, to a decision to eliminate the partner and move on. Anonymity, meanwhile, gives a false sense of security - a belief that one won’t be caught.


Is the gradual shift in social values a factor leading to life partners killing each other?

Yes. Initially, there was the Industrial Revolution. Then came the engineering revolution. Now we are in the midst of a technological revolution shaped by globalisation. Over 150 years ago, French sociologist Émile Durkheim predicted that as the pace of life increases, people will become alienated. Disconnection, he said, would become society’s gravest illness.


We no longer live in clusters or close-knit communities. People now operate in isolation or within small nuclear families. Work hours have stretched from eight to twelve or fifteen. As people grew more distant, technology allowed them to stay remotely connected but that has paradoxically deepened the anonymity.


What is anonymity, and what are its implications?

We now live under a haze of anonymity. Nobody really knows one another. The social pressure that once acted as a moral check on latent violent tendencies has disappeared. Frustration has risen and tolerance has plummeted.


People want everything now, no matter the cost. Many act on impulse, deluded into believing that hurting someone will relieve their emotional pain.


Women, too, fall prey to emotional blindness. Impulsivity is a direct consequence of this high-speed world. Today, men and women no longer meet; they bump into each other. It has fundamentally changed the nature of human relationships though not necessarily for the better.


Is there no longer any fear of consequences?

Guilt has diminished, replaced by shifting value systems. People increasingly hold the false, delusional belief that what they’re doing is right without thinking about consequences. Emotional blindness is rampant. Stress compounds this: when under strain, people lose their ability to reflect and make sound judgments. The brain becomes deaf, dumb and blind, persuading itself that nothing bad will happen.


Is the trend more pronounced in cities?

Yes, urban centres are hotspots. The fast pace of life and social isolation push spouses towards temptation and experimentation. “I’m happily married, but I need something new” is a common refrain. This experimentation, however, comes without understanding that love isn’t just about mating but meeting and sustaining intimacy.


In marriage, people evolve. They get bored. But sustaining a relationship takes effort. Instead, people chase novelty.


Are we addicted to instant gratification?

Absolutely. Instant gratification trumps long-term satisfaction. Impatience defines modern behaviour. If your Uber takes ten minutes, you cancel and look for a faster option.


The same applies to relationships and life choices. Nobody inspects vegetables anymore – they are ordered via an app. People now want everything instantly: vegetables, sex, happiness.


Earlier, one might sing bhajans to feel connected or relaxed. Then came alcohol. Now, alcohol is too slow. People working 12-15 hour-days turn to weed, hash or cocaine for an immediate high. The craving for speed affects all aspects of life.


How are relationships between men and women changing?

People forget that a boyfriend and girlfriend don’t remain the same after marriage. Meeting in a hotel room is different from living together under one roof. Many marriages today are deeply unhappy. There is emotional and physical distance between partners. Sex has become a temporary stress reliever rather than a form of intimacy. People are willing to take risky decisions for momentary satisfaction. Many middle-aged men and women are lonely, leading to unnatural and often unhealthy relationships.


Addiction and sleep deprivation further impair judgment. There is growing morbid jealousy between genders. People now want customised partners or turn to multiple partners to fulfil different emotional or physical needs.

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