First time i think this heading but i chnage it. Two Incomes, Zero Savings: Why India’s Richest Generation is Actually Broke: Of course money is important. But at times, in our pursuit of chasing materialistic happiness through money, we forget the real meaning of happiness. We are like that deer in the Ramayana who kept chasing the fragrance which actually was coming from his own body.
I don’t understand why people work 9 to 5 jobs, earn money, and still hate their jobs. I work every day from 10 pm to 4 am, even without the intention of earning money, and I enjoy it so much. But somewhere along the way I started noticing something about how people around me were living. Something did not add up. And today I want to talk about that.
People don’t want to listen to your sad story. They want to hear how you faced alone the doubts they are still struggling with, and they want the specific details that are applicable to their lives. So let me get straight to it.
One Salary Was Enough. Two Are Not. What Happened?
Around 1990 and 2000, a family in India also lived on one salary. Often the father of the family would work in a bank, some small job, or in a shop and the mother of the house would sit at home. The house rent was paid from this one salary. The living expenses were covered. Two children were raised. And some savings were also gradually accumulated.
Today you can go to any small or big city. In big cities, often both members of the family will be working. He may also be raising two children. Actually, many people are raising only one child and even then they are not able to cover the expenses with both the salaries. Savings are a far cry. Loan EMIs are not getting cleared.
Technically this should be impossible right? Ideally, if your salary has doubled because two people are working, the savings should also double, or at least be good. The children became one from two. The income has increased from one to two. But even then, somewhere these figures are not matching.
And the craziest thing is that when I talk to people in money matters, the situation is such that the salary comes and goes away within a week. Those people who are drowning in debt and do not have any emergency fund. Those who do not have any savings. Those who do not have any investments. They are often not the poorest households. They are very good householders. According to his earnings, he might be earning two to three lakh rupees per month. But even then, somewhere or the other, compensation is not being made.
So I want to answer a very simple but powerful question. How did it happen that despite having two incomes, India became poorer or at least is unable to survive. Something or the other had exploded somewhere. Let us try to know what it is. And we will also try to understand how to escape from it.
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The Research That Shocked America, And Is Now India’s Reality
First of all, this idea is not mine. I am saying this observationally that I can see this. But it is also established in research.
In 2003, an American law professor named Elizabeth Warren wrote a book with her daughter Emily. The Two Income Trap. She basically spent years studying bankrupt families in America. Why do people go bankrupt? How is it that they have nothing left? The earlier hypothesis was that these would be families who do not have money, who are poor and who are not able to earn. But the research came up with something shocking. The highest probability of going bankrupt in America in 200 years was dual income families with two kids.
This was so shocking because initially it was not thought that these people with two incomes would end up in bankruptcy. But what was even more shocking was that if we adjust for inflation, those two income individuals or families were not able to save even as much as a single income family could save in 1970.
Why? Because the income of those two income families was not going into savings. It was going to fight a different battle. The war that was happening in America around the year 2000. And I feel this is happening in India now in 2026.
There has been a very clear demographic shift in India in the last 15 years. Female labor participation is gradually increasing. Still very little. But if you see it in urban India it has steadily been increasing. You can go to any urban city. If the family is nuclear then the mother, father and two children or one and both are working. This has become a default. Whether you go to Koramangala, Hinjewadi, Gurgaon, anywhere.
On paper this generation is the richest generation that India has ever seen and produced. The couple might be working in the IT sector. They must be easily earning Rs 1.5 to 3 lakh per month. To put things in perspective, they earn as much in a month as their parents or perhaps only their father used to earn in a whole year.
So because of that the savings data should be full of sixes and fours. Meaning a lot of money is being saved. Investment is happening. Deposit capital is going to be created. Reserves are incredible. But no, they actually look like a graveyard.
The Numbers That Tell the Real Story
Around 2010, India used to save about 7 to 8 percent of its GDP. Today that number is around 5.3 percent. The number has decreased. GDP continued to grow. So as a percentage this ideally should have stayed the same. It has actually gone down. Household debt a family pays used to average around 26 percent of GDP. That number has now increased to 43 percent of GDP. Unsecured lending, personal loans, credit cards are growing at 20 percent year on year.
They were increasing so rapidly that RBI had to intervene and say that the interest rates being charged on these unsecured loans will have to be regulated. Some people are asking for interest at the rate of 40, 45, 50 percent per annum. And people are also ready to give it to them.
So now combine these two things together. Our income has doubled and our savings are at a 47 year low.
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The Second Income Did Not Create Wealth. It Created Eligibility.
So this second income did not create wealth. It created something else. It created eligibility.
There is ineligibility in many things in life, especially in our country. You cannot be in that club. You do not have the guts. You cannot get admitted to that school. You do not have the guts. You cannot buy that house in that society. You do not have the guts. You cannot enter the showroom of that car. You do not have the guts. You cannot enter the showroom of that brand. You do not have the guts.
This two income household fulfilled the passion and instinct to clear this eligibility. Because now they could make it happen. A family that could not afford a home on just one income or could not afford a home that was beyond their means. Now with dual income they went out in search of those houses. Went out in search of that car. Went out in search of that school. Went out in search of that lifestyle.
The fault is not in the desire. Not in desire. The mistake is that you considered that eligibility as your success. You felt that the purpose of your life was to reach such heights where you could show all these things to the society. And that botched you down.
Why the House You Ran After Ran Away From You
Let us pick up schools for example. Schools are demanding crazy fees and they are getting it. The fees of a pre-school, not even a formal school, just preparing for school, A B C D Ka Kha Ga One Two Three Four, they charge Rs 4000 to 6000 per month. There are big and good schools which charge Rs 1 lakh per month. But that is not the entire story. That school is in a colony where house rates are increasing like crazy. Why? Because this school is accessible only in those houses.
The number of houses around the school cannot increase beyond a limit. Supply is a constraint in a way. So as soon as that supply constraint was removed and families with dual incomes increased, the demand increased while the supply stayed the same. So that house that might have been worth x before is now worth one and a half times. It has doubled. It is growing even faster because the supply of those homes is limited. But demand in terms of the income potential is increasing.
So surprisingly, the house for which you all created a dual income household to afford it, became expensive for you. Because every person went on dual income. You essentially realized the most basic principle of economics that when everybody gets money, nobody gets rich, things just get costlier, so every single everyday thing remains roughly the same. But the things we really need, school, health care, lifestyle, the things we wished we could buy with money, all of those have become insanely expensive.
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The Golden Cage Nobody Talks About
But that is not all. The prices of things increased because the demand increased, but the supply remained roughly the same. Be it good schools, good houses, good restaurants.
And in a way, the insurance has also been removed.
What do I mean by that? In today’s family, both mother and father are working 10 to 10 hours. The children are being raised by nannies. The iPad is being held. Full day boarding school is fostering. Because parents do not have time. And it is understandable because they are trying to earn money in their life so that they can give all the things to their family that they want to give.
Now God forbid a person may have to leave their job. It could be a layoff. It could be forced maternity. So after maternity leave when you have to go back but you cannot for whatever reason. It could be an accident. It could simply be burnout. For whatever reason, the family instantly collapses. Because earlier, when only one person in the family was working and due to any compulsion, if any obstacle was faced by the family, the other person could help. I could have said that I will help.
If I had a mother at home, she could have taken tuitions. Take up some small job. Teach in school. But I can make it happen. That one insurance has expired.
So you have upgraded your lifestyle. You started paying the EMI for that house. Started paying EMI of the car. The children were put in a good school. Everything is absolutely fine. But one person’s salary is gone and you have no savings. You cannot even fulfill your monthly obligations with one salary.
When this insurance is removed, you surprisingly get caught up. Because now this job of yours is not solving your problems. It is not giving you peace in life. It has become a golden cage for you. You are trapped in it. You cannot leave this job even if you want to. Because you know what will happen if one of you leaves your jobs. So starting something of your own is a far cry.
People start to tremble when they think I am feeling burned out. But I cannot even take a three month leave. I cannot even look after my kids and be an at home parent if I want to. I cannot think of pivoting into a new job. I cannot think of quitting and wanting to travel. It is not possible. Because you have completely bought into the dual income household theory and created that golden cage for yourself.
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A Real Example: Rs 2.1 Lakh Income, Zero Savings
I received an email just the day before yesterday. Combined household income, wow, it sounds cool. So the combined household income of this gentleman is Rs 2.1 lakh per month. Savings are also good. Rs 40 lakhs have been saved. They live on rent. But now he wants to buy a house worth Rs 1.7 crore. Why? Because the society is good. It is near the children’s school. It is a gated community. He feels that he has lived long enough and wants to get to that lifestyle.
Then I asked him basic math. Rs 2.1 lakh is your combined income. If you buy a house worth Rs 1.7 crore, even if you invest all your savings in down payment, you will have to take a loan of Rs 1.3 to 1.4 crore. Even if you take a loan for 25 to 30 years, the EMI will be around Rs 1.1 to 1.2 lakh per month. But your income is combined. How much do you get after deducting tax?
Around Rs 1.7 lakh in hand. How to run a house on zero? And his monthly expenditure today is already Rs 1.2 lakh. So today he is earning Rs 1.7 in hand. The cost is Rs 1.2. He is able to save Rs 50,000. But because he desires the house, now he will pay EMI of Rs 1.2 lakh plus Rs 1.2 lakhs monthly expenses which is Rs 2.4 lakh. Income is Rs 1.7 lakh. I asked how will we fill the gap? He said I am looking for a job. Will get a 30 to 40 percent increment. The wife will also do the same. Will reach Rs 2.4 lakh.
And we reached there too. What after that? Can you imagine every single day of your life now where your income is Rs 2.4 lakh, your cost is Rs 2.4 lakh, your savings are zero. And God forbid, if even one person’s job gets affected even a little, it all collapses instantly.
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The Way Out: One Rule That Changes Everything
That is the problem that I am talking about. Now how to solve this?
Number one, I am not recommending that it is often the women who make the sacrifice of not doing the work at home. Of course not. Every person has the right to work. Stand on your feet. Be financially independent. In fact it is proven that if the lady of the house starts earning and is financially independent, the family prospers a lot more. So I do not have any desire to say that only one person in the family should work. Both should work. Absolutely do it.
I am not even saying that you should not live your life, or why are you desiring to have a house, a car, a school, to give the best facilities to your children. I am forcing you to look at life and especially your money in a different way.
What is that? If you have two incomes, what you have is an incredibly powerful mechanism to take control of your life and your money. Use one income. And let that be the higher income, for whoever it is, to live your life. Make your life dependent on that one income. That means you can wish for all the things. But your scope will be a little limited. The life that will be created from that one income, the lifestyle that will be created, will be your real life, your real lifestyle.
So you will buy a house accordingly, the car accordingly, the school accordingly, the phone accordingly, all these things you will make those conscious choices. You can stay on Golf Course Road in Gurgaon and pay a monthly rent of two to three lakh rupees. But one can also stay on Golf Course Extension Road or Sona Road where the rent is low, the facilities are almost the same, but it is a little different. And you in your head will have to start thinking that yes, if only my salary could afford the Sona Road and not the Golf Course. That is how you will have to start thinking. I do not want to reach the level of status that my two salaries allow me to. I have to think about how much I can live on one salary.
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What To Do With the Second Salary
Then what do you do with the second salary? That second salary becomes 100 percent of your investment and your safety net. You will use that second salary to take control of your life. Because if you are able to do that for even 10 years, 15 years, you will escape this rat race. Because that income, if it is made to work, will deliver every desire that you have. It will come a little late but it will definitely come.
Let me give you my own example. The numbers are a little crazy but the concept is the same. Between my income and my wife’s income, we earn Rs 1.25 crore every year. My wife earns Rs 75 lakh and I earn Rs 50 lakh a year. My salary of Rs 50 lakh, after whatever tax is deducted, runs the household. Children’s fees are quite high. The rent of this studio is what we pay. We could even live in a fancier place if we wanted to. You can also pay rent of Rs 3 to 4 lakh. Why do we live in Faridabad?
It is not bad. It is a wonderful luxury apartment. But the rent here is only Rs 75,000 and it is super convenient, our house is upstairs, everything is close to whatever we need. So that is the choice we have made. We have one car, not many. Our expenses are very limited. We do not believe in wasteful spending. We spend a lot on eating right. But whatever it is, we know that it is only that one Rs 50 lakh salary which is around Rs 3.5 to 4 lakh a month in hand after tax. We have to spend all our money on this.
My wife who earns nearly Rs 6.5 lakh a month, after tax she invests 100 percent of that money. She probably spends a few thousand rupees a month on her own personal expenses. As soon as her salary comes on the first date, if I ask her on the 5th how much money she has, she must have a few thousand. I look at my bank at the end of the month.
Last month, I am recording this on the 6th, when I checked my bank balance on 30th June, it had Rs 464. Everything is either invested or spent. Same is the case with her. There will be only a few thousand left by the end of the month. All the remaining lakhs have been invested. And that is the reserve and the insurance that we are building.
And that means we can save around Rs 40 to 50 lakh every year. And that means if we do it right, then in 10 to 15 years this number can easily be anywhere between 5 to 10 crore. And that is enough for us to live our lives on the same lifestyle that we have today. It is within 10 to 15 years that you have escaped the rat race. Which is what you can do as well.
Start Today. No Matter Where You Are.
So if you are single and not yet married, this is still relevant for you because it will ensure that you know how to think of your life when you get married. If you are already married and you have been doing this the wrong way, please start today. There is no better time to start what you feel is the right thing to do. And if you have already been doing this, my congratulations. You are smarter than most of us because you figured something that most of us still have not.
You cannot control house prices, school fees and so on. But you can control your commitments and your desires. I am not saying this to stop them or to strangle them. I am just saying that you should spread your legs as much as your blanket allows under one income. Devote your second income to creating a beautiful future.
Time is the biggest wealth building factor by a mile. Educate yourself to get into the game. Then just let time do its thing. You will become wealthy.
If you want to build wealth, keep your living costs low, increase your income, invest the difference. Do not overcomplicate it.
You came naked. You will leave naked. You came without anything. You will leave without anything. So why so much hatred, resentment, envy, and pride over a lifestyle that you were never going to keep forever anyway. We will all go empty handed. Everything we have earned, we earned here, and we will leave it here only. The only thing that actually matters is whether the choices you made gave you peace or gave you a golden cage.
The choice is yours. And the time to make it is today.
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About The Author
Hemant Singh
Hello friends, I am Hemant, Technical Writer & Co-Founder of Education Learn Academy. Talking about education, I am a student. I enjoy learning things related to new technology and teaching others. I request you that you keep supporting us in this way and we will continue to provide new information for you. :)
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