Earning more than two lakh rupees every month may sound impressive, but it does not automatically translate into financial security or independence. Chartered accountant Nitin Kaushik recently highlighted that a heavy paycheck often creates a false sense of stability. Many professionals assume that a higher salary equals freedom, yet in reality, it can become a financial trap if one is entirely dependent on active income.
The Golden Cage of Earnings
Kaushik explained that even drawing three lakh rupees monthly cannot be considered true freedom if quitting the job tomorrow is not an option. This scenario, he suggested, resembles being stuck inside a luxurious cage—comfortable, but still restrictive. High income might pay for present comforts and lifestyle choices, but without proper financial planning, it does not provide lasting independence.
What Real Wealth Means
True prosperity, according to Kaushik, emerges when money itself generates returns without constant personal effort. Financial freedom is reached when investments consistently cover living expenses. For instance, if a household spends around one lakh rupees monthly, then passive income should at least equal that amount to achieve independence.
The Mathematics of Freedom
Kaushik illustrated this with simple calculations. To sustain monthly expenses of one lakh through investments, one needs to build a corpus that delivers returns large enough to cover costs. At an annual return rate of 6 percent, a fund of two crore rupees would be required. However, at a higher return rate of 10 percent, the necessary fund reduces significantly to 1.2 crore rupees. These figures show that the pathway to financial liberty lies not in higher salaries, but in productive investments.
Shifting the Focus
Kaushik concluded that salaried income merely supports routine expenses, while investments pave the way to long-term autonomy. Instead of running endlessly after bigger paychecks, individuals should focus on accumulating assets that generate steady passive income. The ultimate goal is to create financial systems that continue to pay even when one is no longer working actively. This shift in mindset—from salary dependence to asset creation—forms the foundation of genuine financial freedom.
Why ₹1 Crore Is No Longer Enough for Retirement
On LinkedIn, chartered accountant Abhishek Walia emphasized that the once-aspired retirement goal of saving one crore rupees is no longer practical. He pointed out that treating this figure as a final destination only leads to disappointment.
For many, one crore appears to be a powerful benchmark—a number that feels like the ultimate financial cushion, almost like a magical milestone that guarantees security. Yet, the reality of inflation slowly erodes that belief.
To understand this impact, consider the effect of inflation at just seven percent annually. Over two decades, the value of one crore shrinks dramatically, retaining purchasing power equivalent to only about twenty-five to twenty-six lakh. This decline represents a staggering seventy-five percent erosion in value—without any actual spending involved.
The consequences are clearer when translated into everyday expenses. For example, a school fee of one lakh today could rise to nearly four lakh in twenty years. Similarly, a medical treatment costing five lakh in the present could escalate to around nineteen lakh in the same timeframe. Such increases highlight how misleading it is to assume that saving a single crore is enough to secure financial stability in the future.
The takeaway is simple: setting a fixed target without considering inflation is a flawed strategy. Instead, financial planning must always incorporate inflation-adjusted goals. The focus should be on building wealth that not only matches rising costs but surpasses them. This requires balancing safer options with growth-oriented investments, such as equities, that have the potential to outpace inflation over the long run.
In short, one crore should not be seen as the finish line of retirement planning. It is merely the opening stage of a longer journey toward true financial security.
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The Golden Cage of Earnings
Kaushik explained that even drawing three lakh rupees monthly cannot be considered true freedom if quitting the job tomorrow is not an option. This scenario, he suggested, resembles being stuck inside a luxurious cage—comfortable, but still restrictive. High income might pay for present comforts and lifestyle choices, but without proper financial planning, it does not provide lasting independence.What Real Wealth Means
True prosperity, according to Kaushik, emerges when money itself generates returns without constant personal effort. Financial freedom is reached when investments consistently cover living expenses. For instance, if a household spends around one lakh rupees monthly, then passive income should at least equal that amount to achieve independence.The Mathematics of Freedom
Kaushik illustrated this with simple calculations. To sustain monthly expenses of one lakh through investments, one needs to build a corpus that delivers returns large enough to cover costs. At an annual return rate of 6 percent, a fund of two crore rupees would be required. However, at a higher return rate of 10 percent, the necessary fund reduces significantly to 1.2 crore rupees. These figures show that the pathway to financial liberty lies not in higher salaries, but in productive investments.Shifting the Focus
Kaushik concluded that salaried income merely supports routine expenses, while investments pave the way to long-term autonomy. Instead of running endlessly after bigger paychecks, individuals should focus on accumulating assets that generate steady passive income. The ultimate goal is to create financial systems that continue to pay even when one is no longer working actively. This shift in mindset—from salary dependence to asset creation—forms the foundation of genuine financial freedom.Why ₹1 Crore Is No Longer Enough for Retirement
On LinkedIn, chartered accountant Abhishek Walia emphasized that the once-aspired retirement goal of saving one crore rupees is no longer practical. He pointed out that treating this figure as a final destination only leads to disappointment.For many, one crore appears to be a powerful benchmark—a number that feels like the ultimate financial cushion, almost like a magical milestone that guarantees security. Yet, the reality of inflation slowly erodes that belief.
To understand this impact, consider the effect of inflation at just seven percent annually. Over two decades, the value of one crore shrinks dramatically, retaining purchasing power equivalent to only about twenty-five to twenty-six lakh. This decline represents a staggering seventy-five percent erosion in value—without any actual spending involved.
The consequences are clearer when translated into everyday expenses. For example, a school fee of one lakh today could rise to nearly four lakh in twenty years. Similarly, a medical treatment costing five lakh in the present could escalate to around nineteen lakh in the same timeframe. Such increases highlight how misleading it is to assume that saving a single crore is enough to secure financial stability in the future.
The takeaway is simple: setting a fixed target without considering inflation is a flawed strategy. Instead, financial planning must always incorporate inflation-adjusted goals. The focus should be on building wealth that not only matches rising costs but surpasses them. This requires balancing safer options with growth-oriented investments, such as equities, that have the potential to outpace inflation over the long run.
In short, one crore should not be seen as the finish line of retirement planning. It is merely the opening stage of a longer journey toward true financial security.
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