Is ₹1-crore annual income enough? high earners speak

This is how some people get to lead their lives. In Mumbai, Varun Kakkar is living it up with his annual income 1 crore. “What this income provides is the ability not to think about small things. Me and my family can live independently without budgeting for day-to-day expenses,” said Kakkar, who works in an FMCG company.

Kakkar lives in a 3-BHK apartment in a posh township in Thane which he bought in 2021. “It was an expensive purchase. I pay around 40% of my monthly income towards home loan EMI. One big ticket purchase at a time,” Kakkar said.

earning Akash Sethia 6.5 lakhs (after taxes) per month, no longer budgeting for some luxury experiences. While on a recent Europe vacation with his wife and parents, he rented a convertible that cost him 60,000 for three days. He also went on a paragliding adventure which cost 80,000. “Every month I am left with enough surplus. Hence, I can easily splurge on such experiences without giving much thought,” said Sethia, a management consultant.

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Kakkar and Sethia are just two of the many whose salaries are enviable. Income tax data shows that only 131,000 Indians earned more than this 1 crore annually in FY21, roughly 0.01% of the country’s population. India’s top-paid 1% earners, says a 2020 report by Bloomberg 55 lakhs and above. To be sure, many businesses and self-employed individuals under-report income to avoid higher taxes.

Mint spoke to several ‘millionaires’ in the age group of 27 to 37 about their lifestyles. most of them believe 1 crore doesn’t make them rich enough but unanimously agreed that the income gives them enough financial freedom.

Is 1 crore enough?

The number of years it takes to reach this income level is factored in by inflation, taxes above 30%, and other financial obligations.

Sumit Saurabh, 27, a Noida-based techie, doesn’t consider himself particularly rich, though he earns more 6 lakh per month (after taxes). “My cash flow can afford me a luxurious lifestyle, but it falls short if I want to create meaningful wealth,” he said. 22 lakh loan taken by his parents for his education and his sister’s marriage, he bought back his mother’s gold ornaments which she had mortgaged and bought a house from his parents who live in Bihar. Bought a mid-range car.

Saurabh said, “If I want to buy an apartment in Noida, I can easily pay the EMI, but arranging the down payment is a challenge.” what will be the earning of 1 crore for me 50 lakh is for many people who have ancestral property and are not the sole earners.”

Rohan Chandrasekhar from Bengaluru, who runs a content management firm, lives a minimalist lifestyle despite earning a little more 1 crore annually. he drives a hatchback worth 7 lakh from mid-segment clothing brands and online shops. He said that one crore is not enough to do everything one wants.

“If you consider the inflation rate and high taxation coupled with my social impact aspirations as well as my desire to provide unconditional comfort for my family, the income starts to feel a bit insufficient,” the 37-year-old said.

In Ghaziabad, 27-year-old Shubham Garg says that a particular income level is not a milestone for him to have a successful career. “beyond the 2 lakh, incremental income has become a number for me,” said Garg, founder of a software development company, who earns approx. 12 lakhs every month. “Yes, we (Shubham and his family) have upgraded to a bigger house, like any middle-class family with increased income, but my personal lifestyle has not changed in a big way.”

Taxes and inflation bite, said Devaraj, a resident of Bengaluru, who insisted on using only his first name. “What bothers me more is that despite high taxes, I still pay separately for private medical care, higher studies and drive everywhere or take cabs due to lack of good public transport options I am,” the 32-year-old said.

Where do they invest?

Chandrasekhar’s savings can put many to shame. He invests around 80% of his net income in direct stocks and a mix of active and passive mutual funds. He has made this possible by choosing to live below his means. “I am a big supporter of the FIRE (Financially Independent Retirees Early) ideology and have social impact goals. I want to create a “100 crore portfolio of liquid assets by 2030 that can fund both,” Chandrasekhar said. It also helps that he lives in his own house and has no EMIs to pay.

Meanwhile, Sethia manages to save around 30% of his income without even trying. “I pay my bills and EMIs, send money to parents, spend the entire month and save whatever is left at the end,” he said. , etc., which offer high-yield and have limited risk buffer. Till now I could not do that as there are minimum investment amount restrictions in these products,” he said.

A significant disposable income and regular bonuses can also ensure that you are able to build wealth before taking on other financial responsibilities. For example, Garg has already invested in two real estate properties and recently started investing in mutual funds.

fulfill their dreams

For most, a higher income helps fulfill small aspirations that seemed out of reach while growing up.

“I am able to take international and domestic vacations frequently and the ability to spend on experiences were a distant dream,” said Devaraj, who works with a multinational company. Although he and his wife earn together 1.3 crores annually.

Kakkar said that flying in business class still gives a special feeling. Another is when he afforded a trip for his parents and siblings. “I flew them to Kerala and Kashmir and arranged for their stay in top hotels. It brought him incomparable joy,” he said.

For others, higher income enables them to give back to society. Saurabh is passionate about supporting the underprivileged, but believes in being a capitalist first and then a philanthropist. “I pursued these causes after my income reached a certain level,” he said.

He has founded a non-profit organization that upskills gig workers and sponsors scholarships for students who do not have the means to fund their education. This is apart from the regular financial assistance provided by them in the form of clothes, food and medicines to those in need.