Be aware of the ‘thief’ that will steal your wealth silently

Many people focus on income earning but they are forgetting on the “silent killer- Inflation” in creating wealth to their loved ones. Generally parents wants to transform their wealth to their next generations, for that they “save money” but whatever they saved is nothing after 20-25 years! Surprised? Are you too surprised to hear that 1 crore rupees worth today is nothing after 25-30 Years?Do you know the reason why? To know more read the rest story!

  • In 1960 one cup of tea costs 5 paisa but now in 2022 it is 6-8 rupees
  • In 1970 cost of newspaper is 50 paisa but now it is 6 rupees/day
  • In 1980 Movie ticket in a metro city is 2 rupees but now it is 200 rupees
  • In 1990 cost of leafy vegetable is 1 rupee, but now it is 10 rupees
  • In 2000 Milk packet of 1 litre cost 6-8 rupees, but now it is 60 rupees/litre
  • In 2010 petrol costs 50-60 rupees/litre but now it is 112 rupees/litre

When we observe the past trends prices are almost doubled in each category and so it will be in future too! Still not convinced! First know the meaning of inflation in detail-

As per Economics Inflation is general rise in prices of goods and services and thus reducing the purchasing power of money

What 1 rupee cost 20 years ago is 100 rupees now and 100 rupees cost 20-25 years ago was 1000-2000 rupees now! The above examples of inflation from the past 30-40 years shows that your wealth will be eroded if you still “save money” Then what to do?

The answer is simple! Invest your hard earned money that will beat inflation in the long term! To beat inflation diversify your investments among shares, mutual funds, gold and real estate. Investing in bank fixed deposits is o.k, but it should be for short term needs. Don’t deploy your hard earned money in bank fixed deposits for long term! The reason for this bank fixed deposits generally don’t beat inflation, if you invests your money in F.D’s for 5-10 years the returns generated will not beat inflation, in deed returns from fixed deposits are taxable(added to the income of the depositor and taxed as per his applicable tax slab)That means you are getting poorer(as the returns generated from fixed deposits are far below the inflation where the post tax return will be negative)

So from the above, one should understand that to beat inflation- one should not “save” inspite he should “Invest” his hard-earned money in inflation beating products. Again it depends on the investors risk-taking capability. One should analyse his risk-profile and select suitable products as per his risk appetite.

For that he may take help of a trusted financial advisor(if needed)or taking help of online risk profiling tools available on the net to analyse your risk profile yourself and invest your money in inflation beating products to live happily in the future. Do you want to pass-on your wealth to your next generations- you should not “save” rather “invest” in inflation beating products

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