The Current Scenario
Despite being a $3.89 Trillion economy with a massive 1.4+ Billion population, financial independence is a far away dream for many Indians.
Most Indians are not even aware of the concepts of financial independence. The awareness is so low, that the term appears as a new word in the dictionary.
In simple terms, financial independence means having enough wealth and passive income streams to cover your living expenses, without having to rely on a paycheck from a job. It’s the freedom to choose how you spend your time, whether that’s working on things you are passionate about or spending time with loved ones.
However, this concept remains largely under the radar for the average Indian, who is often focused on meeting immediate financial needs—like paying bills, covering education expenses, or saving for family weddings.
Expenses too high
| CATEGORY | EXPENSE |
| Rent (Metro/Tier -1) | 12,000 to 30,000 INR |
| Travel Expenses | At least 3000 INR |
| Healthcare (incl Insurance) | 800 to 4k INR pm |
| Food, living (family of at least 2) | Min 5k to 20K per month |
Total average expense – At least10k and above
Lack of Investment knowledge
Many Indians, especially those in the age category of 50-60 years old are quite appalled by the concept of investing in share markets. Their resistance is passed on to most of their teenage kids. Despite the initial reluctance, some of them take a daring leap to invest in share markets, only to lose money in the process.
This cycle of fear, followed by risk-taking without sufficient understanding, prevents many from learning how to invest smartly. The reality is that investing in the stock market can be a valuable way to grow wealth over time, but it requires a good understanding of how markets work, the importance of diversification, and the need to be patient.
Unfortunately, these concepts are often not taught at home or in schools, leaving many Indians unprepared to make informed investment decisions.
Sky Rocketing Inflation
This is exactly where most of the FI [Financial Independence] calculators fail. India has a high inflation rate across the years – much more than the rate of increment most Indian employees get.
We spoke with few people, who have silently noticed inflation in their lives. Here are their observations
| Commodity | Price Before | Price after |
| Vicks – (Common balm) | INR 45 | INR 48 |
| Curd (Food) | INR 27 | INR 30 |
| Canteen ( Personal ) | INR 35-45 | Avg increase of 10 rs |
The above were personal observations by a group of candidates based in Chennai, Bangalore and Gujrat. Although the prices do not seem to make any big difference in the lives of common Indians, they reflect a massive hike in price.
Although they are not indicators of inflation, but they still reflect how prices could increase without our notice. [Source : Gov of In ]
Moreover, Year-on-year inflation rate based on All India Consumer Price Index (CPI) for the month of October, 2024 is 6.21%. Corresponding inflation rates for rural and urban are 6.68% and 5.62%, respectively. Not a very good number for most FI calculators.
“Hidden inflation is the largest threat to any economy”
Painful Taxes
Also read : Indian Education has been highly commercialized
We understand the pain of the Indian government as well. Despite having 1.4 Billion population, the amount of people who have filed for an ITR is a meagre 7.28 Crores. But there is a strong and unbeatable consensus that a majority of the middle class people are milked in taxes.
A large list of taxes – 12.5% LTCG, 20% STCG, 28% GST, Road tax, toll, Health Insurance premium tax don’t go well with the ever-rising inflation and forever stagnant salaries. Apart from this, a large number of hidden charges do exist. Corruption is rampant as well. The common Indian man does not receive any proper facility from the government.
Moreover, there is no guarantee that the taxes will reduce in the future. Therefore, every common man must be prepared for this tax uncertainty, which is certainly painful.
No calculators are capable of predicting where and how the government will increase taxes.
No Money to Save
School fees are at an all time high. Medical Insurance is getting costly, salaries are stagnant and grow at a low pace if not. Where do you save money?
The largest barrier to financial independence is that Indians are not even paid enough to save their money
When 90% of the Country makes less than INR 25,000, is it really possible to plan for Financial Independence?
Maybe it is possible, but not in Tier-1/Metro cities, not even in Tier-2 cities if we consider Indian Ambition. It is impossible to sort a house and other conveniences while planning for necessities like insurance and food all with a meagre 25,000 INR per month
Also Read – Essential Smartphone apps that simplify your life
Yes, we can be financially independent. Finance is independent of us
Master Oogway in Bangalore Office.
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