For countless middle-class families, particularly in India, a persistent question echoes through dinner table conversations and online forums: Does relocating to the UAE genuinely help you build wealth faster, or is it merely an alluring mirage painted by social media’s glossy success stories? Chartered Accountant Nitin Kaushik recently ignited a vital discussion, delving into the cold, hard numbers behind this popular belief. His insights redirect our gaze from geographical advantages to fundamental financial habits, from showcasing high incomes to embracing rigorous financial discipline.
At the core of Kaushik’s compelling argument lies a profound truth: wealth accumulation isn’t about where you earn, but rather what you choose to do with your earnings. The crucial query he poses isn’t about nations or currencies, but about individual financial behavior. It’s a challenge to the widespread notion that moving abroad somehow magically accelerates your journey to financial prosperity, with the UAE often being spotlighted as a shortcut to economic independence. But does it truly help you to build wealth faster?
Unpacking the UAE Advantage: Can It Truly Help You Build Wealth Faster?
According to CA Nitin Kaushik, the perception that the UAE offers a fast track to financial success stems from a few tangible benefits. The most significant of these is the absence of personal income tax, a factor that directly inflates an individual’s take-home pay. This tax mathematics, as he calls it, means professionals in the UAE can often save a remarkable 25 to 35 percent more than their counterparts in similar roles back home. Consider an Indian salary of Rs 2 lakh; after taxes, it might shrink to Rs 1.55-1.6 lakh. In stark contrast, a comparable income earned in the UAE typically lands in the bank account almost entirely intact, offering an immediate and substantial boost to investable capital.
Beyond tax benefits, another critical element contributing to the faster accumulation of savings is the monthly savings rate. Many professionals living in the UAE consciously maintain lower living expenses, often opting for shared accommodation and resisting the urge for immediate lifestyle upgrades. This disciplined approach enables some to consistently save between Rs 80,000 to Rs 1.5 lakh per month. When these substantial savings are channeled into consistent investments, the compounding effect can be truly transformative. For instance, a monthly Systematic Investment Plan (SIP) of Rs 1 lakh, achieving a 12 percent annual return, can build a corpus of Rs 1 crore in approximately six years. Even a more modest Rs 50,000 monthly SIP can reach the same milestone in about eleven years. The investment markets and mutual funds remain universal; what changes is simply the speed of reaching financial goals, driven by higher investable surplus.
However, this is precisely where CA Nitin Kaushik challenges the popular narrative that location itself creates wealth. His assertion is clear: savings discipline creates wealth. He highlights a common paradox where professionals in India earning Rs 2 to Rs 3 lakh a month often struggle to save more than Rs 30,000. Factors like lifestyle inflation, hefty EMIs, and premium living costs often erode their income. At this rate, even robust market returns might necessitate 15 to 18 years to accumulate Rs 1 crore. The real distinction, therefore, isn’t between different countries but between differing cash flows. A higher income, in itself, is no guarantee to build wealth faster.
As Kaushik astutely points out, someone earning Rs 3 lakh but consistently saving Rs 1 lakh will achieve financial milestones far quicker than an individual earning Rs 5 lakh but saving only Rs 40,000. What truly dictates financial acceleration is the investable surplus – the amount available to be put to work – rather than the gross salary figure. The perceived advantage many experience abroad isn’t an inherent opportunity of the land, but rather a “forced simplicity.” When spending defaults to staying lower than income, investing becomes almost automatic. This is frequently misconstrued as a geographical perk, when in reality, it’s a behavioral outcome.
The most empowering aspect of his explanation is the reassurance that identical financial results are entirely achievable anywhere, including from one’s home country. By exercising modest lifestyle control, committing to aggressive monthly SIPs, maintaining consistency across market cycles, and sidestepping the temptation to wait for speculative windfalls, individuals can forge identical financial outcomes over time. The wealth formula, as he articulates it, transcends geography: Income minus Expenses equals Investable Capital. Investable Capital multiplied by Time ultimately determines Net Worth. Alter any variable, and your financial future shifts accordingly.
Ultimately, Kaushik’s message is unequivocal. While crossing borders might enhance one’s savings capacity, it doesn’t automatically build wealth faster. What truly does is crossing comfort zones and consistently prioritizing your future. Paying your future self first, month after month, is the quiet, powerful habit that builds genuine financial freedom. No single destination creates wealth on its own; proactive, disciplined financial behavior is how you truly build wealth faster.
Image Credit: Economic Times
