He earns Rs 3.2 lakh a month but saved just Rs 25,000: CA reveals how his client could build Rs 2.75 cr

A high income can create the impression that wealth will automatically follow, but earning more does not always translate into saving more. Lifestyle expenses, EMIs and everyday financial commitments can quietly absorb a large portion of a monthly salary. CA Paaras Gangwal recently shared the case of a 38-year-old client earning Rs 3.2 lakh a month but saving only Rs 25,000. By restructuring his cash flow, the client’s monthly SIP was increased substantially, creating a potentially larger long-term corpus.

38-year-old earned Rs 3.2 lakh but saved just Rs 25,000

Taking to X, CA Paaras Gangwal shared the financial details of his 38-year-old client, who earned Rs 3.2 lakh every month. Despite the substantial income, the client was saving only Rs 25,000 through a monthly SIP. According to Gangwal’s breakdown, Rs 72,000 went towards the client’s EMI, while lifestyle expenses and other costs accounted for Rs 1.8 lakh. This left just Rs 25,000 for investments.

The numbers highlighted a common personal finance problem: a higher salary does not necessarily result in a proportionately higher savings rate.

CA Paaras Gangwal changed the client’s cash flow

Instead of focusing on increasing the client’s income, Gangwal said they worked on restructuring the existing cash flow. The first change was to cap expenses at Rs 1.5 lakh. This created additional room in the monthly budget without requiring a higher salary. The client’s SIP was then increased from Rs 25,000 to Rs 55,000 per month. Gangwal also recommended directing 70% of any bonus towards investments, creating another route for the client to increase wealth beyond the regular monthly SIP.

SIP to increase by 10% every year

The plan did not stop at increasing the SIP to Rs 55,000. Gangwal said the client would also follow a 10% yearly SIP step-up. This means the amount invested would increase annually, potentially allowing the investment corpus to grow faster as the client’s income and financial capacity evolve. A step-up approach can help investors gradually increase their savings rather than attempting to make a very large jump in their investment amount immediately.

Rs 55,000 monthly SIP could become Rs 2.75 crore

According to Gangwal’s calculation, investing Rs 55,000 every month for 15 years at a 12% annual return could result in approximately Rs 2.75 crore. The calculation illustrates how changing the savings rate can significantly alter long-term wealth creation. The potential corpus, however, is based on an assumed 12% return and is not guaranteed, as market-linked investments can deliver different returns over time.

High income alone does not create wealth

The central lesson Gangwal highlighted from the client’s case was that earning a high income is only one part of building wealth. His conclusion was that a high savings rate matters more than income alone when it comes to creating wealth. For the 38-year-old client, the strategy involved controlling lifestyle expenses, increasing the monthly SIP, investing a large portion of bonuses and raising the SIP by 10% every year. The case demonstrates how reviewing where money goes each month can potentially make a significant difference to long-term financial goals, even without an immediate increase in income.