Earning well, still broke: CA explains reason for techie's financial stress

IT professional trapped in 'house rich, cash poor' cycle despite earning monthly salary of Rs 2,20,000

Indian working professionals would regard an annual salary package of Rs 40 lakh as financial bliss. But even that kind of money won't be enough without financial planning, according to a social media post by chartered accountant Nitin Kaushik.

 

Kaushik wrote about a 32-year-old Mumbai-based IT professional who is financially stretched despite earning Rs 2,20,000 as monthly salary. The reason? Lifestyle, loans, and limited investments.

 

The breakdown: Where the money really goes

Here’s how the IT professional spends his salary:

 

-Housing equated monthly installment (EMI): Rs 1,12,000 for a Rs 1.25 crore loan on a Rs 1.5 crore flat in Mulund, Mumbai

 

-Car EMI: Rs 5,000

 

-Living expenses: Rs 50,000 monthly

 

-Monthly savings or investments: Rs 30,000- 40,000, if everything goes to plan

 

A disruption, like job change or a medical emergency, could derail his finances.

 

“Welcome to being house rich, cash poor,” said Kaushik on X, summing up a situation where an individual owns assets but lacks sufficient liquid cash to stay financially secure.

 

The real issue: Poor financial planning, not income

Kaushik’s post reflects a larger trend in India’s urban salaried class. The key problems he highlights include:

 

No real investments: Money spent to buy a home that doesn’t generate returns

 

No emergency fund: A basic safety net is missing

 

No liquidity: Nearly all income is tied up in EMIs and fixed expenses

 

Lifestyle inflation: Spending rises as income grows

 

No retirement planning: Long-term goals are ignored in favour of short-term comfort

 

Lessons for every high earner

Kaushik’s message is simple but critical: a high salary doesn’t guarantee wealth. Net worth may look impressive on paper, but cash flow is king.

 

Here’s what professionals can do differently:

 

1. Spend mindfully: Avoid expanding lifestyle in step with income

 

2. Invest for returns: Prioritise mutual funds, equities, or other productive assets

 

3.Build liquidity: Keep an emergency fund that covers 6–12 months of expenses

 

4. Beware of aspirational debt: Don’t borrow for the sake of social image or peer pressure

 

High salary without a sound money plan will make you feel broke. As Kaushik puts it: “Instead of just chasing bigger salaries, start chasing financial freedom.” For young professionals, the takeaway is clear: real wealth is about smart money management, not just a big paycheque.