The Fear Nobody Talks About

I had a conversation with someone recently. Smart person, good income, stable life. We were talking about money, not in a formal way, just over chai.

He told me he has kept most of his savings in FDs for the last 12 years. Not because he thinks FDs are the best option. But because he once saw his father lose money in the stock market in the year 2008, and that memory stuck.

So, he chose safety. And that felt good.

But here's what he hasn’t calculated. His FD was giving him about 6-7% a year. After tax, closer to 4.5%. Well, Inflation over the same period? About 6%. Which means every year, his money was losing purchasing power while his bank balance looked like it was growing.

The number went up. The value went down.

And that's the fear nobody talks about. We are all aware of the fear of losing money. It's loud. It shows up on the screen in red. Makes headlines.

But the fear of never growing it? It doesn't show up in any app. No notification tells you “Your savings lost 1.5% of real value this year." It just occupies a place, looking safe, while life gets more expensive around it.

I am not saying FDs are bad. They have their own place. But when your entire financial life is built on the fear of one bad memory, that fear becomes more expensive than the loss it's trying to avoid.

Sometimes the safest-looking choice could be the most expensive one.