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Investments And Growing Wealth
- 5. Understanding Inflation and Riskapetite
Inflation Eats away your Money . Your Bank FD will return around 67% return
after tax , Thats equal to average Inflation rate ,which means you dont get
"return ON money" , you actually get just "return OF money" , Your Long term
Returns Must be atleast 56% above Inflation and tax , else you are not
maximising your money , you are just saving it , and people who leave it in the
savings account are actually loosing it . Inflation is the termite of Money , You wont
see it , and wont feel it , but its eating it away slowly ...
Risk Appetite is the maximum loss , after which your mind , body and your soul
says "ooch!! No more" and your Psychological pain is at the maximum . Dont take
risk more than that !! .
Longer the time frame , lesser the risk !!