Nithin Kamath’s Financial Advice: Earn Smart, Spend Smarter, and Always Be Prepared
Zerodha CEO Nithin Kamath recently shared a powerful video and an equally impactful message about personal finance, emphasizing that earning more doesn’t always translate into saving more. In fact, he warns, a higher income often results in increased spending—on gadgets, clothes, dining out, or other purchases aimed at impressing others. The illusion of wealth, he says, often masks deeper financial instability.
Kamath identifies two key mistakes that quietly drain people’s finances: unnecessary spending and borrowing to fund that lifestyle. He dismissed the idea of stock market shortcuts, reiterating that real wealth isn’t built through tips or quick trades but through discipline, good habits, and patience.
“I often get asked for a stock tip, something that will make people rich,” Kamath posted on X (formerly Twitter). “Unfortunately, there are no shortcuts to getting rich. It takes good habits and patience. Things like buying stuff you don’t need, or worse, borrowing to buy them. The other big one is not having health insurance. Things like these can really hold you back.”
The video he shared critiques the conventional middle-class path to “success”—get a job, take out loans, buy a house, and live what seems like a prosperous life. But beneath the surface, it’s often a trap. “You end up working for the bank,” it says, noting that cars, phones, and even homes are usually owned by lenders, not the buyers. What appears to be financial success may just be a cycle of debt.
A critical point in the video is how people treat their monthly salary as an “endless waterfall” of income. Many spend first and think later, leading to a cycle where they are always catching up. Kamath stresses the importance of flipping that pattern—by spending consciously and investing early.
Even small steps can have a big impact. For instance, if you spend ₹50,000 a month, just saving 1%—₹500—by skipping a single online order and investing it in an index fund with 10–12% annual returns can create long-term financial growth. It’s not about making huge sacrifices, but consistently trimming excess.
The video ends with a sobering reminder: people rarely go broke because they earn too little. Financial ruin often stems from a single unexpected event, like a health crisis or job loss. In India, rising medical expenses can wipe out savings overnight, making health insurance and an emergency fund absolutely essential.
Kamath’s message is simple but urgent—track your expenses, avoid unnecessary loans, build a safety net, and most importantly, get health cover. True financial strength lies not just in growing wealth, but in protecting it.
IT.
