My travel writer friend is getting extremely impatient these days. He hates this big city ‘Delhi’ and wants to break free from the ‘stifling corporate life’. But then to pay the bills he needs to go on. My condition is kind of similar. But I can’t do this so early. He has reached a stage where he possibly can take a call. Today he told me that he wants to live in a small village up in the mountains. A village where everybody knows everybody… a place where the entire population falls asleep by 10pm…a place from where he can see the snow capped mountain blessing him every morning. The perfect place where he can write his novel uninterrupted. But then to live this kind of a dream life one needs to have a constant flow of income. We are not Ambanis! So I told him to take a pension plan and keep investing heavily over the next 10 years. And keep his exposure to equity at high level. He should be able to have a good corpus even at an average growth of 10% per year. Equity gives good returns over the long term. But the problem is Inflation.Inflation is the monster which eats away everything. Look at the food prices growing astronomically every week. The humble potato quoting Rs 25 per kg! How will my friend sustain? I think there should be a product which will take care of the inflation. Like a bond which gives…say 6% post inflation…the inflation can be whatever amount...the rate of returns remains at 6%. So if inflation is at 12% the rate of return is at 18%. I guess no bank has the balls to devise a product like this. Inflation is something on which hardly anyone has control. How can they factor that in their product? But then I ask why not? You bankers and the Investment Bankers (now almost extinct) guys are speculators…So speculate guys! Charge us money and gives us the product! I bet that if a product like this come in the market it will be a huge hit…specially with the senior citizens and people nearing their retirement. A 5 year fixed deposit can look attractive at 8% but with inflation shooting to 10% the return turns negative. :(
Is anybody listening? Can we have this fundoo product Mr Banker?
