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.
Advantages Of Leasing
Let's look at these 8 important advantages of leasing:
- Less Volatile Than The Stock Market
Let us give you an example from the equity market. In 2017, most small-cap mutual funds provided 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 market forces do not control your returns. This allows you to invest in the short run as well as the long run.
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 risk-adjusted returns, which gives you an opportunity to diversify your portfolio.
- Tax Benefits
We are 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.
- 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 willing to invest for 1.5-4 years.
- 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.
- You Do Not 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 INR 20,000.
- 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 incomplete.
- Mitigate Risk
It's always healthy to have a diverse financial portfolio to have a healthy balance of different instruments. Leasing provides that equilibrium and is a good balancing factor if you have riskier instruments like stocks and mutual funds in your portfolio.
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Disclaimer - Investments in debt securities are subject to risks. Read all the offer-related documents carefully. The investor is requested to take into consideration all the risk factors before the commencement of trading. This communication is prepared by Grip Broking Private Limited (bearing SEBI Registration No. INZ000312836 and NSE ID 90319) and/or its affiliate/ group company(ies) (together referred to as “Grip”) and the contents of this disclaimer are applicable to this document and any and all written or oral communication(s) made by Grip or its directors, employees, associates, representatives and agents. This communication does not constitute advice relating to investing or otherwise dealing in securities and is not an offer or solicitation for the purchase or sale of any securities. Grip does not guarantee or assure any return on investments and accepts no liability for the consequences of any actions taken based on the information provided. For more details, please visit https://www.gripinvest.in/.
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