Most Indians lose money thinking they're saving: CA Abhishek Walia advices 3-step strategy to build real wealth

In an era of rising living costs and inflation, many Indians believe that regularly saving a portion of their income is enough to secure their financial future. However, financial experts warn that this conventional approach may not be sufficient to preserve wealth over time. Chartered Accountant and financial planning professional Abhishek Walia explains why this perception can be misleading.

“Most Indians don’t realise they’re losing money even when they’re ‘saving’,” Walia wrote in a recent LinkedIn post.

The Hidden Risk of Inflation

Walia explained that a common practice among salaried individuals is to set aside a fixed amount, such as ₹10,000 per month, in savings accounts. While the habit reflects financial discipline, it may not actually protect wealth. The reason lies in the difference between interest rates offered by most savings accounts and the prevailing inflation rate.

• India’s average inflation hovers around 5–6% annually.
• Savings accounts generally offer interest rates between 2.5–3.5%.

“This means the real return on your savings is negative,” Walia noted. “So yes, you’re ‘saving,’ but technically your money is shrinking over time.”

Three-Step Method to Secure Financial Future

To counteract the erosion of wealth and build it, Walia suggests a simple three-step approach:

• Build an Emergency Fund: Keep three to six months’ worth of expenses in a liquid fund or high-interest savings account to handle unexpected financial challenges.

• Invest Strategically: Even modest contributions through Systematic Investment Plans (SIPs) in equity mutual funds can deliver returns that outpace inflation, preserving and growing wealth.

• Automate Investments: Treat investments like EMIs. Automating contributions ensures consistency, discipline, and long-term wealth accumulation.

“Please know that saving is just step one. But investing smartly is what actually protects and grows your wealth,” Walia emphasized.

Changing the Mindset

Financial experts often warn that merely saving money is no longer sufficient in an inflationary environment. While a savings account may provide short-term security, long-term financial goals require investments that generate real returns. Walia’s advice highlights the need for individuals to shift from a purely savings-oriented mindset to one that emphasizes strategic investment and disciplined wealth creation.