Your Rs 30 lakh salary may mean nothing if you ignore this one number, says CA Nitin Kaushik

A high-paying job often feels like the ultimate sign of financial success, but one important number can reveal whether someone is truly building wealth or simply maintaining an expensive lifestyle. According to CA Nitin Kaushik, a big salary alone does not decide financial freedom. The real measure lies in how much of that income a person actually keeps and invests for the future.

Taking to X, CA Nitin Kaushik shared that a person’s salary can become a vanity metric if their savings rate does not improve alongside their earnings. He explained that many professionals focus heavily on increasing their income, believing that moving from a Rs 15 lakh package to Rs 30 lakh means they are automatically becoming wealthier.

However, Kaushik pointed out that if expenses rise at the same speed as income, the person may not actually be progressing financially. According to him, they may simply end up with a more expensive lifestyle while continuing the same financial cycle. He highlighted that the key calculation people should track is their savings rate. This is calculated by dividing total monthly savings and investments by net take-home salary.


For example, if someone earns Rs 2 lakh every month after taxes and puts Rs 60,000 into investments, their savings rate stands at 30%. Kaushik explained that this percentage provides a clearer picture of wealth creation than the salary figure alone. He also discussed the popular 50/30/20 budgeting rule, where 20% is usually allocated towards savings and debt repayment. However, he cautioned that if the entire 20% is being used for EMIs or credit card payments, it does not necessarily mean a person is building wealth.

According to him, a 20% savings rate should be considered the minimum benchmark rather than the ideal goal. People saving below that level may only be managing their current expenses while postponing their financial goals. Kaushik further explained that once a person’s savings rate crosses 35%, the impact on wealth creation changes significantly. With regular investing and market participation, compounding can begin working strongly enough that accumulated wealth starts growing faster than lifestyle expenses over time.


He added that the people who create lasting wealth are not always those with the highest salaries. Instead, they are often the ones who consistently maintain a gap between their income and spending.

For Kaushik, the difference is simple. Income decides the lifestyle someone can afford today, but the savings rate decides how much freedom they can create for tomorrow. If the percentage saved remains unchanged despite salary hikes, a higher income may only mean running faster without actually moving closer to financial independence.