19 October, 2020

Money, Risk, Wealth

As the world gets financially complex, it's time to understand just what's going on—and profit from it.

Madhu Kapparath Imaging by Jayachandran
Money, Risk, Wealth
It is no accident that the word ‘risk’ in the original Arabic meant ‘earning one’s daily bread’.
—Peter F. Drucker, quoted in Jack Beatty’s The World According to Drucker

Om Prakash Aggarwal is a desperate man. At 66, the former engineer with a paints company has no sources of income apart from the investments he’s accumulated in the 31 years of his working life. When he retired at 60, he had his own home, his children were settled and all he had to look forward to was the happiness of grandfatherhood, to be financed by the Rs 17-lakh savings he had amassed. But the past six years have seen his quiet confidence give way to anxiety. Between 1999 and today, interest rates on his investments in post office small savings schemes and public sector bank fixed deposits have fallen by 4 percentage points, from 12 per cent to 8 per cent—apart from the expected 1 percentage point fall post-Budget 2003. "What am I to do?" he asks, as he sees his monthly income crash by two-thirds to Rs 9,900, even as inflation raises the cost of living.

To Aggarwal,...



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