The Death of Fixed Deposits, PPF & Post-office Savings Schemes

The Death of Fixed Deposits, PPF and Post-office Savings Schemes

I always say that, the old personal finance advises are no longer effective to ensure any kind of financial success anymore. This is because the rules of money have been changed now.

Today, Governments and central banks (USA, China & Japan) from all around the world are printing billions and trillions of dollars out of thin air and diluting the purchasing power of your hard earned money in your bank accounts, cash on hand, Fixed deposits, PPF, post-office savings schemes and other fixed income instruments.

The age old personal finance advise is – Save your money and put it in Bank FDs, PPF, Post-office savings schemes..etc… And do 70:30% of Debt:Equity allocation.

In fact, today still most of the personal finance advisors and bloggers will advise you to invest more in debt and less in equity.

But well, the rules of money have been changed now and following this old financial advise can be disastrous.

Let me explain you How?

Read my following two articles -

QE2 Announcement by Federal Reserve

The effect of QE2 on Stocks, Gold and Silver

The above two articles are clearly show that, since decades, the USA, China and Japanese Government are printing literally billions and trillions of dollars out of thin air. And when this money enters into the emerging economies like India, it seriously cause the asset prices to go up and debt to shrink.

Remember,

Equities, Gold & Real Estate will swell because of this money printing activity while the Debt products (FDs, PPF, Post-office savings schemes…etc..) will shrink.

So if you are right now living on the fixed income instruments or planning to live on the fixed income instruments than beware. This is because very soon your wealth in these fixed income instruments will shrink because of higher inflation and very soon the price of all the goods and services in the economy will go up and it will be difficult for people living on fixed income to live on that fixed income.

So What to do Now?

Well, first of all stop following those age old personal finance advises. Increase your Equity allocation now and reduce your debt allocation no matter in which age group you are.

This is because debt products are no more safe. In fact, they are the most dangerous financial products now…riskier than the Equity also..!!!

Start your own business. Owning your own business is the most secure thing in the current economy and owning a job is the most stupid thing anyone can do. So don’t solely depend on your job security but start your own business so that you can become financially more safe and secure.