I Eat your Money But you still DONT CARE!

         
                           If in recent memory, there is one public servant that we did not have the option to select but were happy to see at work, then that has to be this Gentleman-  


Most of you would know him already. He was the Governor of RBI, our central Bank. His name is Raghuram Govind Rajan. He was also known as Rockstar Banker. Apart from working for Government. he also worked for Droplet Wealth Advisors. Now you know why was Droplet happy to see him at work? Yes, he kept speaking about the most important thing that Droplet gives most importance to? 

Well now connect the dots - Banker/Wealth Advisors. Oh.. So both of us give importance to MONEY.. So Rajan was talking about MONEY. WRONG.. FULL WRONG Guess. Its like We are trying to make you Dhoni, you want to become Saha.. then one Big Swaaaha for you! 

Alright lets cut the crap now. He spoke about INFLATION. We told he is important to us because he gave us a very important concept - Dosanomics. to explain the effect of INFLATION

Refer below - 


In case you did not note what Rajan and we wanted you to note, we have put the image back here highlighting the thing to be noted - 


I N F L A T I O N

Yes, Today we want to bring to your attention this Wealth eating termite that Inflation is.
Inflation is such a thing that it robs your saving of the power of making you rich. Lets assume that your Parents already saved 6.50 some 35 years ago in fixed deposit. The FD generally has returned a average of 9% interest. If you were to withdraw that money today you will get Rs 132. This is a handsome return since your money has increased by 20 times. But mind you, Inflation has been there too but you have not been mindful about it. So you simply ploughed your saving into FD thinking that it will help you in retirement days. Lets look what happened - 


Alas! With Rs 6.50 you would have bought 500 Gms of Amul butter 35 years ago. But today even after saving and letting the same Rs 6.5 grow @ 9% you will not be able to buy 500 gms of Amul with the wealth generated. Blame no one but Inflation. 

Below is the list of items and how much their cost has increased over period of time due to inflation. 
What do you suggest we do then? Simple. Save your hard earned money in products which gives returns that beat inflation. Be it real estate, Financial products or any other investment, Apply enough prudence and decide whether the investment will help you buy Equal Amul or Less Amul or More Amul in future. 

If you have got hold of this concept then you have hit Inflation for a SIX! Like what Rajan shows below- 


Or if you continue to ignore, even if you save, Inflation will get you will get out! 

Ignored Inflation? Yes, you are out he says!

To those feeling like below - 

What are they trying to tell, I dont understand anything, please talk to us;)

At Droplet, we want you to help yourselves be better saver and reach financial independence. 

Comments

Post a Comment

Popular posts from this blog

Why Investing is Easy - Chapter#1

Image
 We have been planning to write a piece with this title for sometime now. It so happened that last week I was speaking to a good friend from Investing community and he shared a experiance with me. He chanced upon a Doctor and learnt that there are from the same place. So the conversation boiled down to - "What puts food on the plate question". So One was a doctor and another was a full time investor/advisor. The Doctor was quick to point out that - Being Investor is such a easy profession unlike others, One can easily make 30-50% returns every year. My investor friend would only laugh since he knows that he is the not 1st and he will not be last to "think" that investing is Easy.  But of course, Investing is easy. Let me put the facts out here.. Lets say this is Jan 2019 and you started simply started SIP of 10K in a Mutual Fund that invests only in Top 100 stocks or lets say just did a one time purchase of about 1 lac. Here is how the results will look today -  In
Read more

Interim Budget - 2024

Image
 We promised to bring you the Chapter#2 of the Why Investing is easy but in the interim, Government published the Interim Budget and I think its reasonable that our readers expect us to write about it and we write about it. So Chapter#2 can wait... Here's the News from the Interim Budget. “ If it ain't broke, don't fix it.” The Government has not done much mumbo-jumbo in the budget and there is hardly anything for middle class as such. Things look far better now than they were in the past and good thing is Government not trying to tinker things, that are working fine, just for the sake for some "Budget-drama".  Where does that leave us? If you have been reading our budget blogs , you will appreciate the fact that we always want to give a personal touch to what the take aways from the Budget!                                    Take Away# 1 Fix it if its Broken This is so much in contrary to what the Government has done with the Budget but gives a very important cu
Read more

Happy New Year 2024

Image
                      Happy New Year! This is the 7th New Year for Droplet Wealth and each year, we share the rules of personal finance but this year we wanted it to be a bit different. So we will tell you a real story about how one gentlemen turned 29 Crores into 5000 Crores and the financial lessons we can learn from it. The Story -   The Gentleman we are talking about was a Managing Director in a Luggage brand company and the bosses at the company moved on, gave the control to the second generation. The second generation was not keen to work with our MD. Our MD realized this soon and resigned from the company, purchased a 56% stake in its competitor for 29 Crores. Mind you, He had that much money to invest! Now he was his own boss and working in his own company, though his company had limited market share and was much smaller than his previous company. The slog went on for 12 years and today, his company has overtaken the company where is worked as MD and is valued at 10,000 Crore.
Read more