Do you remember the Ten Rupees chocolate bar of yester-years… Yes! … exactly that one which guests used to gift us. We used to distribute a portion of it and still have a decent portion left to satiate our sweet tooth. A few days back I bought a chocolate bar of Ten Rupees… and would you believe … it actually got lost in my pocket. The size was so small …it felt almost like a cube rather than a bar. And that is what we call Inflation.
Talk about the very humble…but very tasty Samosa. Something which I used to buy at rupees one a piece in my childhood … takes my peace away when I have to pay rupees fifteen for the same thing. Again the same villain ‘ INFLATION!’.
So think what Inflation can do to your hard earned money. Of course it mercilessly depreciates the value.
A common practice …most of us do . Whenever ,we switch jobs … we continue to keep the erstwhile salary account with whatever balance left as it is. Reason… we do not have time to do anything separately… it feels comfortable to have that little surplus lying idle. Result…the value of our little ‘heap’ reduces day by day.
Fixed Deposits are instruments whose post-tax returns are hardly satisfactory. But we feel very secured to have our capital protected. Rather than concentrating on beating inflation … appreciating our earnings in the long run, we are more inclined towards the safety of capital …hence we continue to heap our savings. So our precious heap goes towards fixed deposits … resulting in notional appreciation causing actual depreciation.
Last but not least … be it fixed deposits or mutual funds, we investors love to get dividend here and there. In most case, we do not actually need it … in fact to trace the amount of dividend received becomes a herculean task. So why do such an untraceable heaping? Wouldn’t it be better …if the dividends were again reinvested at the same rate as our investments … and we reaped sumptuous benefits on maturity,
The moment you start heaping your money…it becomes too lazy to race inflation … So invest today … let your money beat inflation to reward you with better returns