The Silent Killer of Wealth: Inflation, Lifestyle Creep, and Hidden Fees

Money doesn’t disappear—it just silently sneaks away. The biggest thieves? Inflation, lifestyle creep, and sneaky hidden fees. Let’s break these down with some real-world examples, historical anecdotes, and most importantly—data. Because your money deserves better.

Inflation: The Invisible Pickpocket

If you kept Rs. 10,000 under your mattress in 2014, it could buy you 5 fancy dinners at a Mumbai fine-dining restaurant. Today? Maybe 2, if you’re lucky. That’s inflation—your money losing value without you even realising it.

India’s Inflation Story

• Between 2013-2023, India’s average inflation rate was 5-6% per year. Actual inflation for most of us reading this, it would be over 10% p.a.

• The price of a litre of petrol in Mumbai was Rs. 68.14 in March 2015, today it’s Rs. 103.

• The cost of an MBA from the top IIM’s was Rs 5 Lakhs in 2005, today it’s Rs. 20 Lakhs.

• The price of 1kg of tomatoes in 2005 was Rs. 6 - 10/kg, now it is at about Rs. 30 - 60/kg depending on the season.

  
  

Inflation erodes your purchasing power (i.e. Your ability to buy the same thing at the same price). If your investments don’t beat inflation, you’re actually losing money.

How to Beat Inflation?

1. Invest in Equities

The Nifty 50 has delivered about 12% CAGR over the last 20 years, beating inflation (~6%). If you’d invested Rs. 1 lakh in 2004, you’d have Rs. 9-10 lakh today. If you didn’t? Well, you still have Rs. 1 lakh, but it buys far less.  

2. Avoid Cash as Long-Term Investments

Cash in hand is great, if you are saving up as gunpowder for an upcoming investment or for an expense you just have to bear. Otherwise, you’re left with peanuts. Maybe groundnuts.  

3. Own Productive Assets

Stocks, businesses, even real estate (if done right) grow with inflation. Anything that helps & increases your earnings & networth is a great mix to beat inflation over the long term. 

4. Gold

Gold has consistently shown decent long-term returns (9-10% CAGR). Add in its ability to liquidate instantly at a time of crisis or take a loan against it & we actually have quite a good asset for your asset allocation mix. 

5. Upskill & Earn More

Your job is also an investment. Everytime you are able to upskill and earn more either via promotions, incentives, bonuses, job change or side gigs you are able to earn more & deploy more capital to earn even more. Skills beat inflation.  

Your money is at war with inflation. Make sure it wins.

Lifestyle Creep: Your Future’s Worst Enemy

Remember when you were happy with an Ola Mini? Now, it’s only Ola Prime or Uber Black. That’s lifestyle creep—when increased earnings lead to increased expenses.

Signs You’re a Victim:

• Your first salary was Rs. 25,000, and you survived on Maggi and chai. Now, you make Rs. 1.5lakh, but somehow still save nothing.

• You were fine with a Samsung Galaxy M Series. Now, you “need” an iPhone 15 Pro Max.

• You used to be okay with experiences for yourself. Now, you need to buy and do things for the #gram.

How to Fight Lifestyle Creep?

1. Save First, Spend Later –

Automate investments & have separate accounts for spending, saving & investing so money leaves your account before you can splurge on the 900 Rs.cocktails.

2. Anchor Yourself to a Modest Lifestyle –

We all know that after a certain point we don't need to splurge more. We kind of have the realisation that these brands of clothes, food and other stuff is more than enough for the rest of our life.

3. Follow the 50-30-20 Rule –

50% needs, 30% wants, 20% savings/investments. Look, I am not trying to say don't spend on things & experiences you truly enjoy. You’re only going to be young once so go & do it. All I’m saying is, what if you choose to not spend on the other things that you regret after purchasing.

Hidden Fees: The Small Leaks That Sink Big Ships

1. Bank Charges: The Modern-Day Pickpockets

Ever checked your bank statement? You should. Banks silently deduct Rs. 150-500 per month for things like:

• Minimum balance non-maintenance

• SMS alerts (ironically, they charge you for telling you they charged you)

• Debit card fees (whether you use it or not)

2. Mutual Fund Expense Ratios

A 2% expense ratio on a mutual fund might seem small, but over 20 years, it can eat 30-40% of your returns. Choose index funds (expense ratio 0.2-0.5%) instead.

3. Credit Card Late Fees

A Rs. 10,000 unpaid credit card bill can turn into Rs. 15,000 in three months thanks to 40%+ annual interest. Always pay your full bill, not just the minimum amount.

4. Subscription Overload

Netflix, Hotstar, Spotify, Amazon Prime, Zee5, Apple TV, Youtube Premium, Sony LIV, Voot, MX Player, & what not — if you have all of them, you’re spending Rs. 3000+ per month. Do you really need all of it?

Final Thoughts: Protect Your Wealth Before It’s Too Late

Money mistakes are often silent, but their impact is loud. Inflation eats your savings. Lifestyle creep makes you spend mindlessly. Hidden fees rob you bit by bit.

Want to get rich? Control what you can—invest wisely, spend consciously, and cut the silent wealth killers before they drain you dry.