A recent post by Abhishek Kumar, Sebi-registered investment adviser and founder of Sahaj Money, is grabbing attention, not because it reveals a secret formula, but because it exposes how easy it is to twist numbers and confuse people.
He wrote on LinkedIn, “How can Rs 36 lakh turn into Rs 38 lakh in 30 years even with 12% returns?”
“Spoiler: Someone’s mixing numbers, and it’s not in your favour. Math looked solid, but there’s a tricky fallacy lurking in those numbers,” he pointed out a classic mistake, “Mixing real (inflation adjusted) and nominal (actual money) figures is like comparing apples to oranges. You’ll always get a weird answer.”
THE CORE MISTAKE: APPLES VS ORANGES
Kumar broke it down simply. The Rs 36 lakh mentioned in the example was the total money actually invested over 30 years — meaning it was in nominal terms. But the final value of Rs 38 lakh, which looked shockingly low, was shown after adjusting for inflation.
This, he said, creates an illusion that returns barely beat inflation.
To put it plainly: if your investment amount is shown in today’s rupees, then your profits, taxes, fees, and final value must also be shown in today’s rupees. You can’t adjust one side of the equation and not the other.
INFLATION ADJUSTMENTS DONE WRONG
According to Kumar, the above calculation made three key errors. It treated the invested Rs 36 lakh as actual money, but treated the final corpus as inflation-adjusted money.
It applied inflation only to the final value — not to taxes, commissions or the invested amounts. This made costs and fees appear disproportionately high, and the outcome unusually small.
“If you invest Rs 36 lakh in actual money, your profits, commissions and taxes must all be shown in actual rupees too,” he said.
WHAT SHOULD INVESTORS DO INSTEAD?
Kumar offered a simple rule for anyone analysing long-term returns. Either compare everything in nominal terms, without adjusting for inflation, or adjust every single figure — contributions, taxes, fees, and final value — for inflation.
“True wealth-building means looking at all the figures the same way. Want to see the real impact of inflation? Adjust everything for inflation, or compare only nominal numbers.”
He also flagged how selective inflation adjustments can accidentally mislead readers into thinking equity SIPs barely deliver real returns, when historically, they have significantly beaten inflation over long periods.
The post has reminded many retail investors that numbers alone can mislead if framed poorly. Before accepting viral finance claims, Kumar recommends a basic question: “Are all figures on the same scale? If not, it’s a calculation that’ll confuse more than help.”
His final prompt to followers summed up the mood online: What’s the weirdest finance ‘math hack’ you’ve seen online?”
Simply put, it’s a timely reminder for investors — not everything that looks like maths is actually ‘good maths.’
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