Salary cannot make you wealthy, says CA: Explains why you'll always be behind expenses and what to do

In an era where the cost of living is rising rapidly, many professionals assume that a steady salary and regular increments are enough to secure financial stability. However, experts warn that relying solely on a paycheck may not lead to real wealth. With inflation steadily increasing and lifestyle expenses growing, earning more does not necessarily translate into greater financial freedom.

Salary Growth vs Inflation
Chartered Accountant Nitin Kaushik recently highlighted on X that while regular paychecks ensure day-to-day survival, they often fail to create long-term wealth. The key reason lies in the dynamics of salary growth versus living costs. Kaushik points out that even with a consistent annual increment of around 10%, a salary typically takes over seven years to double, based on the well-known “Rule of 72.”

However, living expenses, driven by inflation, generally increase by 6–7% each year. This means that despite earning more, the real purchasing power of an individual barely improves. Simply put, a growing salary does not automatically translate into increased financial freedom or wealth accumulation.

Your Salary Won’t Save You 🚨

Even if you get a 10% annual increment,
➡️ Your pay doubles only in ~7.2 years (Rule of 72).

But here’s the catch:
📈 Living costs (inflation) often rise 6–7% yearly.
Meaning: Your real purchasing power barely grows.

So if all you do is your job…

— CA Nitin Kaushik (FCA) | LLB (@Finance_Bareek) September 28, 2025

Why You’ll Always Be Behind

The combination of slow salary growth and rising costs creates a situation where employees are often just keeping pace with expenses rather than building surplus wealth. Kaushik emphasizes that focusing solely on a job may lead to a life where income covers necessities but leaves little room for wealth creation. In such a scenario, one is perpetually “running behind” financial goals despite hard work.

Shifting Focus Beyond the Paycheck
To break this cycle, Kaushik suggests dedicating a portion of your time—roughly 20%—to activities that can significantly multiply growth. This includes developing additional skills, exploring investments, engaging in passion projects, or starting business ventures. While a salary ensures financial stability, these additional avenues offer the potential for exponential wealth generation.

In essence, jobs are designed to pay the bills, but dreams and strategic initiatives are what create real financial growth. By consciously allocating time and resources to income-generating or skill-building pursuits beyond the core job, individuals can build wealth that a salary alone cannot provide.