Ritesh Sabharwal CFP®

W.M.W #9: Your ₹1 crore today will be ₹17.4 lacs in 30 years

Reading time: 4 minutes - August 16, 2025

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Hey Reader

If you think ₹1 crore makes you “set for life,” I’ve got bad news just being a crorepati won't be enough.

I can’t tell you how many times I’ve heard people proudly say, “I have ₹1 crore in savings, I’m sorted.”

It’s a nice round number, sounds like a big milestone… until inflation quietly eats away at it. And inflation doesn’t knock - it just moves into your house and slowly drains out the wealth.

Today, let’s talk about:

• How to measure inflation’s real impact on your money
• The Rule of 70 and how to apply it within seconds
• How to grow your money faster than inflation

3 Things You Need to do to Keep Your Money’s Buying Power Intact (Even if Prices Keep Rising)

To make sure your wealth actually works for you long-term, understand these simple but powerful ideas.

Let’s break them down.

1️⃣ Learn the Rule of 70 (It’s easier than it sounds)

The Rule of 70 is a quick mental math trick to estimate how long it takes for your money’s value to halve due to inflation.

The formula:

2️⃣ Your portfolio must beat inflation after tax

It’s not enough for your portfolio to grow at 6-8% if inflation is also at 6% - that means you are not moving forward.

Worse, taxes eat into your returns. If you earn 8% and pay ~2% tax (assuming 20-30% tax rate), you’re effectively earning 6%. That barely covers inflation.

In last 10 years, only Equities, Real Estate and Gold have managed to deliver post-tax returns that beat inflation. Many traditional options like savings accounts and fixed deposits have struggled after accounting for both taxes and inflation.

*Past returns (source platforms like FundsIndia, just for example purposes, does not mean will continue in the future.

This is calculated assuming the 30% tax bracket and 12.5% long term capital gains but in case you want to redeem earlier, the 12.5% tax rate could be 20% short term capital gains tax as well.

3️⃣ Combine these 2 Rules of Money to assess the inflation impact

Let’s take ₹1 crore as of today. Sounds like a lot, right? Now, let’s run it through two simple but brutally honest rules.

Rule of 114: Divide 114 by your expected annual return % to know how many years it’ll take for your money to triple. If you invest with an expected 12% return, ₹1 crore becomes ₹3 crore in about 9.5–10 years.

Rule of 70: Divide 70 by the inflation rate % to know how long it takes for your money’s value to halve. At 7% inflation, the purchasing power of your money halves in about 10 years — meaning ₹3 crore in 10 years will feel like ₹1.5 crore today.

✅ On paper, your ₹1 crore grows to ₹3 crore.

❌ In reality, after inflation, it’s worth just ₹1.5 crore in today’s terms.

That’s the silent killer most people ignore when they dream about “future wealth.”

Here’s what you learned today:

• Rule of 70 = 70 ÷ inflation rate = years for value to halve
• Your post-tax returns must be above inflation
• Combine the rule of 114 and rule of 70 to assess the inflation impact

The action step?​
Run the Rule of 114 and rule of 70 on your own savings today. Then ask: “What am I doing to make sure my portfolio beats inflation and taxes?”

If you don’t have an answer - you need one now, not later.

P.S - if you need help building your portfolio, reply to this email with "Portfolio Help"

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