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How to beat Inflation

Asefa Hafeez
beat Inflation

Presenting Investor Education Originals, where we simplify the basics of personal finance and investing for you. In this video, we will learn how to beat inflation by investing in ELSS mutual funds.

 

Inflation reduces our purchasing power. The things you can buy now, you might not be able to buy in the future at the same cost. For example, 1 liter of petrol used to cost Rs.9.84 in 1990 costs Rs.105.03 in 2022.

1 kg of wheat grain which used to cost Rs.2.35 in 1990, costs Rs.55 in 2022.

 

Let’s talk about the present-day scenario. Say you have Rs. 1000 in 2022. Assuming a 7% annual inflation rate, its inflation-adjusted value in 2032 will be Rs 1967. What does it mean? Everything you might buy with Rs.1000 in 2022 will require you to spend Rs.1967 in 2032.

 

Now, how does one beat it?

It is a bug that can only be cured by putting your money in assets with a high probability of delivering returns at a higher rate than inflation . Equity Linked Mutual Funds are one such instrument. Over the last decade, Sensex has produced gains of more than 10%, whereas the average inflation rate stood at 5.98%.

 

According to statistics, investing in the ELSS category has given an average return of around 15% over 10 years. Therefore, investing in ELSS will not only inflation-proof your wealth, but also provide you with higher long-term gains with tax exemption benefits of up to 1.5 lakh under Section 80c.

 

Start investing through a platform that brings goal planning and investing to your fingertips. Visit kuvera.in to discover Direct Plans and Fixed Deposits and start investing today.

 

#MutualFundSahiHai #KuveraSabseSahiHai #PersonalFinance #InvestorEducation

 

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