‘ ₹50 lakh salary, ₹60 lakh debt’: Research analyst warns how high earners could fall into debt trap
In an analysis, a research analyst illustrates how high salaries can mask financial instability, which could even lead to a debt trap. The analyst advocates for prioritising wealth building over living an extravagant lifestyle on EMIs.
A person with ₹50 lakh annual salary, a BMW, a Gurgaon flat, and International vacations might sound like a success story; but this image of “rich on paper” often means “broke in reality", shared Priya Jain, a Sebi-registered research analyst, taking inspiration from her daily encounters.
In a LinkedIn post, Jain explained how extravagant lifestyles and a lack of financial planning can lead to debt traps that plague high-earning professionals in India.
Jain shared an analysis in which she detailed the life of a fictional person who earns ₹50 lakh annually but carries a burden of ₹60 lakh in loans.
Instagram life vs bank account reality
The case highlights the life of a character named Priya who works as a software engineer, drives a BMW, which she bought on EMI and owns an apartment in Gurgaon with a ₹40 lakh loan.
This person also maintains an active online presence, complete with Dubai vacation posts and over 10,000 LinkedIn followers.
Yet, their reality consists of a bunch of liabilities which come with living a “rich-on-paper” life. Priya has ₹60 lakh in total debt, monthly EMIs of ₹85,000 and zero emergency fund. She is living paycheck to paycheck and just one medical emergency away from bankruptcy, Jain said in her post.
"As a SEBI-registered research analyst, I meet these "rich-on-paper, broke-in-reality" people daily," Jain noted.
Math leading to debt trap
Jain's analysis reveals the illusion in the numbers. A ₹50 lakh annual salary translates to roughly ₹2.8 lakh take-home pay after taxes. The fixed monthly outflow is massive — ₹85,000 in EMIs and ₹50,000 in basic expenses, totalling ₹1.35 lakh.
While this leaves the person with a ₹1.45 lakh saving, this surplus is quickly consumed by the hidden costs of a luxury life, which include car maintenance, insurance and repairs, along with home maintenance and society fees. Medical expenses and family emergencies also add up to the expenses from that surplus money. On top of these expenses, lifestyle inflation pressure also eats up savings.
The actual monthly savings left are often zero, Jain noted.
The middle-class debt trap
Jain said that such a lifestyle can create a “middle-class debt trap.” The individual appears successful to others but is deeply stressed inside. Every month becomes a struggle, yet stopping EMIs feels like “failure”.
Her final lesson is that “real wealth isn't what you earn. It's what you keep.” An individual's financial health is defined as their assets minus liabilities. If this number is negative, then the person by definition is broke, regardless of their salary.
In another comparison, Jain argues that a delivery professional earning ₹30,000 monthly but consistently saving ₹15,000 is financially richer than the fictional character Priya with a monthly salary of ₹2.8 lakh.
The post calls for high-earning professionals to get real about their money and prioritise wealth building over maintaining an expensive lifestyle.