Why Rs 40 LPA earners don’t feel richer than Rs 20 LPA earners. CA explains the hidden reason

Do you think a bigger salary means peace of mind? For many urban professionals, doubling their income often means higher EMIs, rising lifestyle costs, and more financial pressure. Chartered Accountant Nitin Kaushik recently explained why people earning Rs 40 LPA often do not feel significantly richer than those earning Rs 20 LPA, despite the sharp jump in salary.

In a detailed post on X, Kaushik argued that “lifestyle inflation” has quietly become one of the biggest financial traps for high-earning professionals. According to him, the problem is not always low income, but the tendency to scale expenses at the same speed as earnings.

Social status

He wrote that people “will never feel rich” if their social status depends on things financed through loans or EMIs. As salaries increase, lifestyles usually expand alongside them. Instead of building long-term wealth, many professionals end up taking on larger liabilities.


Kaushik explained that when someone moves from a Rs 20 LPA package to Rs 40 LPA, they rarely feel twice as financially secure. Instead, they often shift to a more expensive gated society, buy luxury vehicles, or put their children into premium international schools. The result, he said, is that “their surplus stays zero because their overhead has scaled exactly with their income.”

Illusionary savings

According to him, this creates the illusion of financial success without actual wealth creation. On paper, income may look impressive, but monthly obligations continue eating away at savings and investments.

The CA also pointed to social media as a major driver behind this spending behaviour. He noted that modern lifestyles are increasingly shaped by comparison culture, where people constantly measure their real lives against curated online images.

Calling wealth a “performance art” in today’s digital age, Kaushik said people are surrounded by highlight reels that create pressure to appear successful. This often leads to what he described as “comparison spending” — purchasing expensive items not out of necessity, but to maintain a certain image. He warned that many people end up buying things “they don’t need, with money they haven’t earned, to impress people.” Over time, this mindset can quietly damage financial stability.

Affordability and wealth

Kaushik further argued that the growing EMI culture has normalised living on borrowed money. Expensive purchases feel affordable because people focus only on the monthly payment rather than the total cost. According to him, many individuals confuse affordability with wealth. Being able to manage an EMI every month does not necessarily mean someone can truly afford the product itself.

He also highlighted the danger of excessive fixed obligations. Rent, insurance payments, EMIs, and other recurring expenses can quickly consume a major chunk of take-home salary. Kaushik cautioned that if fixed expenses take up more than 50 per cent of monthly income, even high earners can become financially vulnerable.

One job loss or missed appraisal away from emergency

In such situations, one missed appraisal cycle, job loss, or unexpected emergency can create serious stress despite a seemingly high salary package. This, he explained, is the reason many people earning Rs 5 lakh a month still feel anxious about their finances and bank balance. High income alone does not automatically translate into financial freedom.

Kaushik stressed that true wealth should not be measured through gross salary figures. Instead, he believes wealth is determined by net worth and by the gap between earnings and spending. “True wealth is the gap between what you earn and what you spend,” he wrote, adding that financial peace begins when people define their own version of “enough” instead of participating in endless status competition.