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How I ACTUALLY Spend My 66 LPA Salary in Bangalore
Perspective By InCred Money
Overview
This video details the financial life of Satvik Bhatra, a software engineer at Google earning a 66 LPA CTC. It breaks down his salary components, including base pay, bonuses, and RSUs, and meticulously outlines his monthly expenses, categorized into 'responsible' and 'bonus' spending. The video also covers his investment strategy, current portfolio, and his personal definition of success, emphasizing financial independence and providing for his family.
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Chapters
- Total CTC of 66 LPA comprises base salary (40 LPA), performance bonus (6 LPA), and RSUs (20 LPA).
- RSUs (Restricted Stock Units) are a significant component, vesting over time and taxed upon vesting.
- Annual take-home salary differs from the total CTC due to stock vesting schedules and taxes.
- Previous roles at Morgan Stanley (22 LPA) and early Google tenure (43 LPA) show career progression.
Understanding the components of a CTC is crucial for accurately assessing one's actual income and financial planning, as not all components are immediately liquid or equally taxed.
Satvik's 66 LPA CTC includes 40 LPA base, 6 LPA bonus, and 20 LPA in RSUs, illustrating a typical tech compensation structure.
- Gross monthly cash from base salary is ~3.37 lakhs, with ~80,000 deducted for income tax.
- Monthly vested stocks (RSUs) are valued at ~1.6 lakhs and are taxed at the broker level (~75,000).
- Other deductions include PF (~10,600) and professional tax (~200).
- Annual take-home pay after all taxes is ~39.74 lakhs, or ~29.54 lakhs excluding RSUs.
This section highlights the significant impact of taxes and deductions on gross salary, revealing the actual disposable income available for spending and saving.
After taxes and deductions, Satvik's monthly cash take-home is approximately 2.46 lakhs, demonstrating the difference between gross and net pay.
- Rent and maintenance are the largest expense (~20,500), shared with housemates.
- Utilities like electricity are paid (~1,000), while Wi-Fi is company-sponsored.
- Groceries (~5,000) and mobile recharge (~200) are modest expenses.
- A home loan EMI (pre-EMI phase) is currently 10,000, expected to increase.
- YouTube channel expenses (editors) are ~15,000, viewed as an investment.
Categorizing expenses helps in identifying areas of necessary spending versus discretionary spending, allowing for better budget control and financial discipline.
Satvik pays 19,200 for rent and 1,500 for maintenance, totaling 20,700 for his share of housing costs.
- Food delivery (~5,000) and dining out (~5,000) are significant discretionary expenses.
- Entertainment (movies, events) and subscriptions (streaming, gaming) add up (~700 and ~2,225 respectively).
- Spending on gadgets (~850), grooming (~250), and clothing/footwear (~2,500) occurs less frequently but is budgeted monthly.
- Fitness subscriptions (Fitso) cost ~1,000 per month.
- Travel expenses, including trips home and with friends, average ~15,000 per month.
Understanding discretionary spending patterns reveals lifestyle choices and potential areas for savings if financial goals require it.
Satvik budgets approximately 5,000 rupees monthly for food delivery, indicating a reliance on convenience.
- Company-provided gym access and free cabs to/from office offer significant savings.
- Work-from-home essentials like monitors and hubs are also provided.
- Corporate health insurance covers ~7.5 lakhs annually.
- Free meals at the office contribute to monthly savings.
- Company-provided gadgets like Pixel phones and Fitbit watches are valuable perks.
Company-provided benefits can substantially reduce personal expenses and should be factored into the overall financial picture, not just salary.
Free office meals and sponsored Wi-Fi are highlighted as significant cost-saving perks.
- Investment is primarily in direct equities, with ~1 lakh invested monthly.
- An 'emergency/opportunity fund' of ~37,500 is maintained for market fluctuations and unexpected needs.
- EPF contributions total ~10,600 per month.
- No current investments in mutual funds, fixed deposits, or cryptocurrency.
- Current portfolio value is ~70 lakhs, dominated by equities (including Google stocks) and real estate.
A clear investment strategy and diversified portfolio are key to long-term wealth creation and financial security.
Satvik's equity portfolio, including vested Google stocks, is valued at approximately 44 lakhs, forming the largest part of his investments.
- Success is defined by upgrading basic needs ('roti, kapda, makan') to the highest possible level.
- Avoiding regrets in life is a primary goal.
- Financial independence allows for providing for family and pursuing personal goals.
- Pride in his parents' support and his mother's encouragement are significant motivators.
Personal values and definitions of success shape financial goals and spending priorities, influencing long-term life satisfaction.
Satvik aims to upgrade his family's basic necessities to the best possible standard, reflecting his definition of success.
Key takeaways
- A high CTC does not directly translate to high disposable income; taxes, stock vesting, and deductions significantly reduce take-home pay.
- Distinguishing between 'responsible' and 'bonus' spending is essential for effective budgeting and lifestyle management.
- Company-provided perks and benefits can offer substantial financial value, reducing personal expenses.
- Direct equity investment and maintaining an emergency/opportunity fund are key components of Satvik's investment strategy.
- Long-term financial success is tied to personal definitions, including providing for family and living without regrets.
- Understanding the difference between RSUs and ESOPs is important for valuing stock-based compensation.
- A significant portion of income is allocated to investments, demonstrating a focus on wealth building over immediate consumption.
Key terms
CTC (Cost to Company)LPA (Lakhs Per Annum)RSU (Restricted Stock Unit)ESOP (Employee Stock Option Plan)Base SalaryPerformance BonusVestingPre-EMIDirect EquitiesEmergency/Opportunity Fund
Test your understanding
- How does the breakdown of CTC into base salary, bonus, and RSUs affect an individual's actual take-home pay?
- What are the main categories of expenses Satvik tracks, and what is the significance of this categorization?
- How do company-provided perks and benefits contribute to an employee's overall financial well-being beyond their salary?
- What is Satvik's primary investment strategy, and how does he differentiate between an emergency fund and an opportunity fund?
- How does Satvik define success, and how does this definition influence his financial decisions and spending habits?