A 32-year-old Indian software engineer transforms his savings approach, moving beyond traditional bank deposits to beat inflation through purpose-driven asset allocation and disciplined investing.
A 32-year-old software engineer in India learned that keeping money “safe” can still be a losing strategy. According to a post on LinkedIn by Abhishek Kumar, a SEBI-registered adviser at SahajMoney, the man had accumulated ₹15 lakh in savings but left almost all of it in a bank account for four years, assuming that avoiding risk meant avoiding loss.
The problem was inflation. His savings were earning about 3% a year, while prices were rising at roughly 6%, meaning his cash was quietly losing purchasing power over time. That is a familiar trap for savers, and Kiplinger has recently warned that standard savings accounts can lag inflation, leaving households poorer in real terms even when the balance appears to be growing. The publication has also noted that some high-yield accounts and certificates of deposit are now offering returns that can beat inflation, offering a better place for short-term cash.
The fix, Kumar said, did not involve complex trading or speculative bets. Instead, the first step was to give each pool of money a clear purpose. About ₹4 lakh was ring-fenced as an emergency reserve through a mix of a sweep-in fixed deposit and a liquid fund. Another ₹6 lakh was set aside for a house deposit over five years, with most of that money moved into debt funds because the time horizon was too short for heavy equity exposure. Kiplinger has made a similar point in recent coverage, arguing that savers often fail not because they pick the wrong product, but because they never assign their money a job.
The rest was directed towards long-term goals. The investor started a monthly ₹45,000 systematic investment plan in equity funds for retirement, his first step into stocks, and later increased it after becoming more comfortable with market swings. Before taking on more investment risk, he also arranged protection with a ₹2 crore term insurance policy and ₹10 lakh of health cover, at a combined annual cost of less than ₹30,000. Eight months later, his conclusion was simple: not acting at all had been a decision too, and not a particularly good one.
Disclaimer: This article is intended to inform and educate, not to recommend or endorse any financial product, investment or strategy. Please consider your own financial circumstances and seek professional advice where appropriate before making financial decisions.
