Why do so many people religiously read publications like The Financial Express, The Wall Street Journal, Economic Times, or Financial Times, or tune in to CNBC? The answer lies in their desire to keep tabs on their investments.
In today’s fast-paced world, people constantly check their phones, almost obsessively, to monitor whether the price of their investments is rising. This habit has become as addictive as scrolling through Instagram or TikTok.
The motivation is simple: they have invested in assets like stocks, gold, or real estate to safeguard their wealth against the slow erosion of purchasing power caused by inflation. As local currencies—whether it’s the Dollar, Rupee, or Euro—lose value over time, these investments offer a sense of financial security.
For many, staying informed through business media isn’t just a matter of curiosity; it’s a strategy to make better financial decisions in an unpredictable world.
Source: This image I created myself from data of Bureau of Labor Statistics for my TED talk.
The chart above illustrates what has happened to the U.S. Dollar’s purchasing power over time—it’s steadily declined. The Indian Rupee tells an even harsher story. The Rupee, which traded at 25-30 Rupees range to the Dollar in 2000, fell to the 60s range by 2014 and hovers in the 80-90s range in this decade.
For most people, investing is not just about growth; it’s about survival. As inflation erodes the value of local currencies, individuals turn to historically appreciating assets like stocks, gold, and real estate to preserve their wealth. These investments act as a safeguard against the diminishing value of salaries and savings. After all, no one wants their hard-earned money today to lose its purchasing power tomorrow.
But what if the rules of the game were different? Imagine if stocks or gold consistently lost value every year—people would stop investing in them. Similarly, if the purchasing power of a currency continually increased, there would be no reason to invest at all. People would simply hoard cash, locking it away in vaults or even under mattresses.
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