Make sure our investment beat inflation

Inflation is the rate at which the general level of prices for goods and services is rising and, hence, the purchasing power of rupee is falling.

Are we considering inflation while investing our hard earned money?

Let's see the chart of living cost of middle class family.

In Year 1920 cost of living was Rs 1/-

In Year 1940 cost of living was Rs 10/-

In Year 1960 cost of living was Rs.100/-

In Year 1980 cost of living was Rs 1,000/-

In Year 2000 cost of living was Rs 10,000/-

And In Year 2020 it will be Rs. 1,00,000/-

So when we make investments, we’ve to be cautious that as our investments grow, the silent monster of inflation also catches up.

Hence, our overall portfolio should earn at least an amount over & above the inflation, or say a positive real return.

How to achieve that?

·      By including some amount of equity in our portfolio as per our comfort level.

·      While fixed income investments like FD and debt funds give stability, equity MF in the portfolio will bring the much needed growth so that our portfolio beats inflation in the long term.

Don’t plan the future on today's value, always consider the factor of Inflation and Tax.

We can reduce the stress of impact of inflation on our returns by balancing our portfolio smartly.

“Inflation takes from the ignorant and gives to the well informed” – Venita Vancaspel