8 Reasons Why You Should Consider Leasing in 2022

Millennials are constantly looking for opportunities to diversify their portfolio. Gone are the days when one waits for their ancestral wealth to materialize, or a fixed deposit to mature. Things are faster, digital and convenient today.

While many of you are well aware of the rendezvous that happens in the stock market, how many of you are familiar with leasing? Not many we presume.  Leasing can give you various benefits that you probably didn’t think of, which can help you attain your future financial goals.

So, let's jump right in.

8 Advantages of Leasing

Let's look at these 8 important advantages of leasing: 

1. Less Volatile Than the Stock Market

Let us give you an example from the equity market. In 2017, most small-cap mutual funds were providing an average 5-year return of 50%. And currently, the 5-year return is 5%. Can such volatility be right for you in the short and medium run?

In leasing, you are awarded by a much more stable system, because your returns are not controlled by market forces. This allows you to invest in the short-run, as well as long-run.

2. Returns

Enunciating on our previous point, since leasing is a relatively stable medium, the rate of returns is also more or less stable. In fact, leasing can give you an IRR of 20%+, This gives you an opportunity to diversify your portfolio.

3. Tax Benefits

We're all looking for a way to pay less tax and finance leasing gives you a great opportunity to garner tax benefits. While there are mediums like ELSS mutual funds that give you tax benefits, these mediums are risky.

4. Works Well to Achieve Short-Term Financial Goals

Leasing works well to achieve short financial goals and therefore is adequate for people who have just started their careers or even students who are willing to invest for a period of 1.5-4 years.

5. Strong Collateral

The money you invest as a lessee is guarded by strong collateral. This means the asset you’re investing in, is secured and stable.

How do you define strong collateral?

It’s simple. The stronger the asset, the stronger the collateral. Think of it this way. A big apartment would be stronger than a tiny concrete house. This is one of the reasons why people garner stable returns!

Additional Advantages when you invest via Grip

The above 5 are some of the major advantages of leasing. Apart from this, investing via platforms like Grip has exclusive advantages of its own.

6. You Don't Need a Huge Investment Amount

According to a recent study, less than 10% of Indians employ their money in alternative means. One of the major myths that harbor is that you need to be rich to invest, or that you will lose money if you invest in the so-called unsafe 'mediums'.

Neither of these statements is true. Leasing in particular requires you to have a small amount and one can even start investing with a sum as low as ?20,000.

7. Co-Invest with Others

Leasing is basically a way for many investors to come together, pool in money for the same asset, and then share the returns with each other. Hence the loss if any is shared amongst the investors as the ownership is fractional and not complete.

8. Mitigate Risk

It's always healthy to have a diverse financial portfolio so that you have a healthy balance of different instruments. Leasing provides you with that equilibrium and is a good balancing factor if you have riskier instruments like stocks and mutual funds in your portfolio.

Happy Leasing!
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