Who’s Stealing my Money ??

“Today I have accumulated enough money to buy a new bicycle for myself” , said Rahul, a 13 year old kid, who was saving money from last 3 years in his piggy bank. He was quite impressed with his father’s philosophy of saving money to fund your requirements. “Dad, please take this money and buy me a new bicycle with this” urged Rahul with glittering eyes.

“This money isn’t enough to buy your bicycle, Son” Said his father, Suresh.

“But Dad, I had checked the price of the bicycle. It was Rs. 1800. And thus I was saving Rs. 50 every month since last 3 years, so that I accumulate Rs. 600 every year and Rs. 1800 at the end of 3 years” Said Rahul.

“The money is Rs. 300 Short of what is required to buy the bicycle” Said Father Suresh.

“No Dad, that’s not possible. It was properly locked in my piggy bank. Who can steal it from there ??” Rahul was confused.

“Rahul, the one who has stolen your money is ‘Inflation’” Said Father Suresh.

“Who is this inflation, Dad? Why is he stealing my money ?”

“Son, inflation means the rise in prices. Your piggy bank money still counts Rs. 1800. But the price of bicycle has gone up in these 3 years to Rs. 2,100. This is how the inflation has reduced the value of your money by Rs. 300 in 3 years. Or you can say, that it has “Stole” Rs. 300 from your savings.” Explained father Suresh.

“How can I protect my money from getting stolen by inflation Dad? I thought it was absolutely safe in the piggy bank” asked worried Rahul.

“The biggest risk we can take about our savings is, not investing it, Son. We think that our money is absolutely safe in our Lockers and Savings Accounts. But without even we coming to know about it, the giant called inflation eats it up. We are now talking about only 3 years. Ok, can you take a guess what would a bicycle might be costing when I was your age ?” asked father Suresh.

“I Can’t be sure Dad. But somewhere around Rs. 1000-1200.” guessed Rahul.

“Well, the right answer is Rs. 465.” Smiled father Suresh.

“Oh My God !! Are you Serious Dad? That was a steal. You could have bought it with only two months savings na?” asked the super-thrilled Rahul.

“No Son. I did not used to get a pocket-money of Rs. 250 p.m. like you. My Pocket-money at that time was Rs. 50 a month. Out of which I used to save Rs. 35 every month for my bicycle. And rather than keeping it idle, I would invest it in a small savings scheme which gave me a return of around 10% p.a. at that time. This ways, I was able to accumulate an amount of Rs. 465 in a span of less than 13 months.” Explained father Suresh.

“That was really thoughtful of you Dad. I have learnt two lessons from this

  1. I will increase my saving proportion from the present 20% to at least 50% as I do not have any responsibilities currently.
  2. I will invest the money smartly to generate a return higher than the inflation rate so that the “Inflation Giant” doesn’t steal my money” said Rahul.

Rahul has learnt his lesson. When are we planning to learn?

We look forward to your feedback and comments on the above article. Please feel free to contact us on saurabh.nidhiinvestments@gmail.com if you have any questions.

(All the characters in the above article are hypothetical. There resemblance to any person, living or dead, will be purely coincidental)







Published by professorbajaj

Prof. Saurabh Bajaj is an Author, Mentor, Motivational Speaker and Wealth Planner. He has done his MBA from Narsee Monjee Institute of Management Studies (NMIMS) Mumbai, one of the top 10 management institutes in India. He holds the prestigious FRM (Financial Risk Manager) degree awarded by Global Association of Risk Professionals (GARP), USA. Till date, there are less than 15,000 professionals in the world, who have been honored with this degree. He has also been awarded CFGP (Chartered Financial Goal Planner) Certification by AAFM (American Academy of Financial Management). After his MBA, he joined J P Morgan, the second largest Investment Bank in the world. He has worked with J P Morgan as Risk Analyst for more than two years. Prof. Bajaj also holds an Advisory certification awarded by AMFI (Association of Mutual Funds of India). During his stint at Bombay Stock Exchange, he has handled Investment Management and Treasury operations of the BSE Corpus. He has set up an entrepreneurship venture in the field of Wealth Planning and Investment Consulting under the name “Nidhi Investments” and holds the profile of CEO. Prof. Bajaj sits on the Expert Panel of CAClubindia.com and MBAClubindia.com as Investment Expert. He is actively involved in investor education through his blog www.professorbajaj.com which has a readership from 78 Countries all over the world. His articles are also regularly published in caclubindia.com , mbaclubindia.com , totalca.com , charteredclub.com, bankbazaar.com and lawyersclubindia.com . He has been awarded the title of “Best Article Writer” from caclubIndia.com in Jan 2012 and has been selected amongst “Top 5 Technical Writers” from all over India in Feb 2013. He has been invited by various TV Channels like SPIN TV, CNBC TV18, UTV Bloomberg Etc for programs like "Expert Advice" , "What Markets Want ", "Budget Analysis" etc. He has been invited by Several organisations like Lions Club, Rotary Club, Agrawal Welfare Foundation, Rajasthan Mandal, Agroha Vikas Trust, Union MF, UTI MF, Arthamitra Gurukulam, Vidyalankar Institute of Technology etc for expert lecture on "Smart Investing", "Life is A Celebration", "Financial Freedom", "The Digital IFA" etc. He was ranked 8th Merit at All India level NMAT which got him selected for MBA programme at NMIMS, Mumbai. He did his MBA with Capital Markets as his specialisation. Soft Skills has become an inevitable part of every selection process and teaching learning process these days. The students from small towns and tier II cities, in spite of being talented and well equipped with technical skills, are seen struggling in the selection process. This is because of their lack of exposure to these soft skills. Mr. Bajaj has a zeal for training candidates to develop these skills and has been imparting the same on since last two years. This zeal and passion inspired him to set up his own firm called “Knowledge Circle” which aims to train candidates for soft skills. Till date, he has trained more than 5000 participants from over 220 organizations across various fields of soft skills. He has been associated with MSBTE (Maharashtra State Board of Technical Education) to conduct Soft skills training workshop for the faculties of Polytechnic Colleges in Entire Maharashtra (Mumbai Region, Pune Region, Aurangabad Region and Nagpur Region) since last 8 years. He has also been associated with ICAI (Institute of Chartered Accountants of India) for training CA Students on various topics related to Communications skills, Group Discussions etc. He was invited by Fr. Agnel Polytechnic College, Vashi for a motivational workshop for faculties. He was also invited by Vivekanad Polytechnic College for "Communication Skills and Email Etiquette" training for non-teaching staff. Apart from these, he has conducted “Capacity Building Soft Skills workshop for Faculties” at ITI Gunj, ITI Pusad, ITI Digras and ITI Umarkhed. This was the first ever soft skills workshop for faculties in the history of ITI’s in Vidarbha. He was also invited by Shivaji Education Society to conduct similar Soft skills workshops for the faculties and office staff of Shivaji Junior College Pusad, Shivaji High School Pusad, Shivaji Vidyalaya Belora and Shivaji Vidyalaya Bhojla. He has conducted training workshop on “Effective Presentation Skills” for the relationship managers of HDFC Mutual Fund, Andheri Branch, Mumbai. He has also been invited at College of Management and Computer Science, Yavatmal, College of Dairy Technology, Warud, B N College of Engineering, Pusad, B D College of Engineering, Wardha, College of Engineering and Technology, Akola, Dr.N.P.Hirani Institute of Polytechnic, Pusad etc. for the Guest lecture on “Developing Interview Skills”.

12 thoughts on “Who’s Stealing my Money ??

  1. Wow “Inflation” explained so nicely and in simple words that even grandmother can understand. Nice article sirjee.

    1. Thank you Sirjee.

      In fact, the best people who can explain inflation are grandmothers only. We can always find them complaining, “Aajkal toh kya daam ho gaye hai chhoti chhoti cheezon ke”. What they are referring to, is the compounding effect of inflation.

      Thanks again for your visit and feedback. Looking forward to more in future.

  2. Simple and Lucid Article !!

    It hits the importance of savings and investments, right on its head !!

    Just too Good !! Keep Writing

    1. Thanks for the Compliments Anmol !!

      Yes I have seen people saving but not investing as they feel that saving is a good enough step. I have just tried to highlight the same here.

      Thanks again for your visit and feedback. Look forward to more in future.

  3. Sir Jee….. A Simple, Sober but indeed a great way to wake up people like me…. I salute you sir…..

    mujhe lagta h ye article mere liye hi likha h aapne….. is article se first lesson to mujhe hi mila h ki increase the saving and invest smartly…..

    1. Thanks Giriraj Bhai !!

      Its indeed a great compliment to hear. Feels really nice to know that all these articles are proving to be of use to you.

      Thanks again for your visit and feedback. Looking forward to more in future.

  4. hey………………………really gr8 job………………………………

    socha tha main tarif to nahi karungi but could not stop……………..he he sachm e gr8 job ji…keep it up…….

  5. Brilliant piece Saurabh.. Very simply written but drives home the point! Great work. Have u started your own company?

    1. Thank you so much for the compliments Swati !!

      Yes dear, by Grace of God and wishes of all you friends, I have started two companies of my own. Nidhi Investments is serving a clientele in 7 states of India in a period of 1.5 years. God willing, we plan to serve all over India and also expand globally.

      Thanks again for your visit and feedback. Looking forward to more in future.

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