The Sixth Money Mantra

We have been dogged by the rising inflation ever since attaining Independence. The prices of goods and services keep spiralling up, making any increase in income ineffective. Have you noticed how your expenses creep up to equal your income?

What if the same inflation helps you earn more money? Incredulous, are you?

While traditional investments such as Fixed Deposits punish you with inflation, equity markets reward you. Let’s read Neil’s story to unravel our sixth Money Mantra!


Make Inflation your friend, not your enemy. It can help your money grow tremendously.

 “Hover Above the Inflation!”

‘Neil, I know you are devastated, but always remember, I am your friend and will always be there for you.’

Neil remembered how Joanna had pacified him when he lost his father in an accident a few years ago. Childhood friends, Neil and Joanna, lived in the same neighbourhood, went to the same school, and later, the same college.

‘You kept your promise, Joanna. I will never forget what a true friend you are,’ Neil thought as he walked out of Joanna’s home, feeling relieved, focused and positive.

After his father’s sudden demise, Neil and his mother had found themselves in a financial quagmire. A small business owner, Neil’s father had mortgaged their home to get some working capital for his business. Neil had never been interested in his father’s business. He was a gifted musician and longed for a career in the field. The graduation that he was pursuing had been at his father’s insistence. But now his shoulders were heavy with the burden of his father’s debts. Surprisingly, his father had left little in the form of savings, and he never believed in investing money.

Soon, the mother and son moved to a rented house as the bank took over the mortgaged property. Neil dropped out of college and started taking up gigs in the neighbourhood to support his mother. Although the financial struggle was taxing, Neil took some consolation from the fact that perforce, he was building a career in music.

Years rolled by, and Neil emerged on the local music scene of the state. He wasn’t immensely popular, yet; but he had his hands full. Regular work meant regular income. Neil, having faced financial scarcity, wisely kept aside a portion of his income.

Meanwhile, Joanna completed her graduation and joined an MBA program at a reputed college. Her father had taken early retirement and was working on a hydroponics project of his own. An environment-enthusiast, he had a keen interest in farming and wished to come up with a sustainable solution to the burgeoning food problem in the world. All this while, Joanna and Neil continued meeting and remained the best of friends.

One day, Neil informed Joanna that he was planning to get married. While Joanna felt happy for her friend, she posed him with a practical question.

“Neil, do you have enough savings to fund the wedding? I know that Rose is studying, and she won’t be able to support you financially.”

“Yes, Joanna. I have thought about it. I have been saving a part of my income each month since the time Dad left us for his heavenly abode. I will dip into those funds for the wedding costs and will continue saving in the future.”

“Neil, do you mean you are saving money in a savings account?”

“I am not so stupid, Joanna! I have my money in FDs – they pay you more than your savings account, I hope you know that.”

Joanna burst out laughing.

“Why are you laughing?”

“Neil, I want you to come home with me. Dad has been saying that he wants to meet you.”

“Okay, that’s a sudden change of subject. I will accompany you anyway.”

Soon, they drove to Joanna’s home in her car. Joanna’s mom lavished Neil with some frothy coffee and homemade cake. Meanwhile, Joanna briefed her father about Neil’s finances.

Joanna’s father remained quiet for a few minutes. He remembered his dear friend and silently promised himself that he would not let Neil repeat the financial mistakes made by his father. He called out to Neil, lovingly.

“Son, I heard you are getting married. I am very happy for you.”

“Thank you, Uncle.”

“Son, as one of your father’s closest friends, I want to share something with you that could potentially change your life forever.”

“Tell me, Uncle.”

“Have you heard of SIPs, Neil?”

“Yes, uncle. Systematic investments into mutual funds. But I hear they are risky. I don’t want to put my hard-earned money on the line – who will take care of my family if all my money goes down in the market.”

“Son, that’s very thoughtful of you. But would you believe me if I tell you that I have been investing in SIPs since the past thirty years? Today, it is because of my swelling portfolio that I can follow my dreams and ensure a comfortable lifestyle for my family, too.”

Neil thought for a few seconds and said, “Uncle, I still believe that I am not ready to risk my money to market movements. I would rather have my money safe and sound in Fixed Deposits where I get good returns, too!”

Joanna’s father smiled and said, “Son, you are right in thinking that the returns on FDs aren’t affected by market movements. But did you know that the inflation – the rate at which things are getting more expensive – is increasing every year, which effectively erodes your returns. What’s more, you have to pay tax on the interest earned. No wonder people who put their money in FDs for a long time effectively get negative returns!”

As a perplexed Neil looked on, Joanna’s father explained that inflation is an enemy when one invests in traditional schemes; however, when one invests in the stock market, inflation actually helps in growing the portfolio.

“Take my advice, son, and start investing 20 percent of your salary in well-performing mutual funds. Over a period of ten years and more, mutual funds are known to outperform conventional financial instruments such as FDs and government bonds. In addition, get a comprehensive insurance cover – a small premium each year can be a huge source of support to your family in the future.”

At this point, Joanna jumped in.

“Neil, do you know I am a millionaire?”


“Yes, Neil. I have been investing through SIPs since I was a teenager. I started investing INR 500 from my pocket money each month when I was 15 and continued to increase the amount as my income increased. Today, I don’t need any funds from dad to manage my lifestyle!”

“I don’t know what to say!”

“Well, don’t say anything, Neil. I have fixed an appointment for you with our financial advisor. He has helped hundreds of youngsters manage their money better so that they don’t have to work for money, but their passion!”

Neil was stunned. When he left for home, he couldn’t stop dreaming about the future that awaited him. Finally, he knew what he had to do. They would not be struggling forever! Financial freedom had always been a dream for him – and now, it was about to come true!

Thanks to Joana’s true friendship, Neil avoided the mistake that so many Indians make.

Keep watching this space for reading tales of friendship, camaraderie, love and financial wisdom.

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Dr. Celso Fernandes can be reached at +91-9422058741.