The middle class works harder, saves more, and still loses ground. Meanwhile, the rich sleep, borrow, and pass on massive wealth—legally and tax-free. Chartered Accountant Nitin kaushik reveals the “greatest wealth cheat code nobody talks about”: a simple three-step strategy that builds generational fortune while middle-class money erodes under taxes and inflation. This isn’t magic—it’s strategy, patience, and exploiting rules the average investor ignores.
1. Buy Assets That Appreciate Faster Than Inflation 💰
Middle-class earners follow the predictable path: Earn → Spend → Save, usually parking money in fixed deposits or savings accounts. Post-tax returns hover around 5%—barely keeping up with inflation. Real wealth shrinks.
The rich do something different: they buy assets that grow over time—real estate, equities, businesses, art. A Rs 1 crore flat in 2000 can be worth Rs 5 crore today. That’s compounding on steroids. kaushik says bluntly: “You can’t save your way to wealth—you must own appreciating assets.” Time becomes their silent partner.
2. Borrow Instead Of Selling: Liquidity Without Taxes 🏦
When the middle class needs cash, they sell assets—triggering capital gains tax of up to 20%. The wealthy? They borrow against their assets instead. Loans aren’t income, so they aren’t taxed, and interest may even be deductible.
Example: A Rs 10 crore property secures a Rs 4 crore loan at 8% interest. The property continues to appreciate, the money is tax-free, and the lifestyle stays luxurious. Scale this to Rs 50 crore in assets: borrow Rs 10 crore, enjoy it, and watch the portfolio grow to Rs 130 crore in 10 years. kaushik calls it “funding your life through leverage”—a concept middle-class savers rarely understand.
3. Die Smarter: Preserve Wealth For Heirs ⚰️
The masterstroke: when wealthy owners pass away, heirs inherit assets at current market value, eliminating previous capital gains. In India, inheritance isn’t taxed, meaning the full appreciation is transferred untouched.
Example: Property bought for Rs 10 crore is now worth Rs 40 crore. Borrow Rs 15 crore during your lifetime, enjoy it tax-free. Heirs inherit Rs 40 crore, and taxes on capital gains are zero. The result? Rs 15 crore enjoyed, Rs 40 crore preserved, Rs 0 lost to taxes. That’s Rs 55 crore effectively created and preserved.
4. Real Takeaway: Mindset Beats Income 💡
kaushik stresses: this isn’t just for billionaires. Doctors, entrepreneurs, and landlords use home equity loans, business financing, and collateralized lending on shares. The three pillars:
• Own appreciating assets
• Plan taxes smartly
• Be patient long-term
“Money isn’t about how much you earn,” kaushik concludes. “It’s about how little you lose to tax and inflation.” While the middle class follows Earn → Save → Retire → Die, the wealthy play Buy → Borrow → Die → Repeat. Same effort, radically different outcomes.
Bottom Line:
The middle class fights inflation and taxes while the rich hack the system legally, leveraging assets, loans, and inheritance rules to preserve and multiply wealth across generations. If you want to survive market shifts and avoid losing ground, it’s time to stop just saving and start playing the game smarter.
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