The ghost of Inflation has started to grip us. May be a few thousands who have a plenty to spend are not feeling the heat. The monthly budget has gone haywire.... saari jeb mahine ki 15 taarikh tak khatam ho jaati hai or ab to bank balance bhi nosedive kar raha hai. Inflation @10 % means even ur good old FDs are also not able to keep pace with the inflation and deduct the TDS out of it and you are nowhere. Post office/ KVPs/ NSCs/ PPF etc., the good old darlings of saving schemes and retired persons are giving us returns which are not able to fight inflation. As per one statistics the petrol would cost @400/- per litre by 2020...LPG gas @ 1000/-, Movie ticket @400/-..even a masala dosa would cost around 250/- by 2020. If Inflation remains at around 10%( I am talking about retail inflation) a family living on Rs. 20000/- a month will need around Rs. 400000/- PER MONTH, 30 years from now. Will the earnings increase at the same pace? I am sure the population will. If GDP growth of USA is any clue we will increase @3-4% after a decade...may be earlier if the US recession hits the whole world including India. So what can we do now. Start saving now. Unlike USA the backbone of indian economy is savings and not expenditure hence we don't require a rate cut but an increased interest rate. some economist may disagree and I am not an economist. I am a commom man who wants to live peacefully and wants his family to live peacefully. Take this simple example : If we put Rs. 10000/- per annum for 35 yrs. and at a growth rate of 15% (compounded annually), It becomes almost 1 cr. The return of 15% can only come via share market and if you know nothing about it go for mutual funds with a tenure of 10 -15 years. A SIP investment plan being the best option. The other day I was listening to a financial expert and he was emphasizing on buying a plot of 250 yds in a B grade city. His thinking was simple. India is growing in population at a very fast rate and every body will need land to live. Our land area will remain the same so we will have a shoratge of it. A very good idea. He also insisted on taking a loan from the bank to get income tax benefit. Isliye kehta hoon aamdani athanni kharch rupaiya bahut bhari padne wala hai.