If you’re struggling between leasing gold or keeping it in physical form, you’re not alone in navigating this complex choice. In a world where traditional investments still prevail, and gold is considered a metal to store in lockers, for investors looking for exposure to this precious asset, choosing between leasing and owning gold for personal use is crucial. Just like every other thing in this world, both leasing and owning also have different benefits for investors.
However, when you delve into the nuanced examination of the benefits of both, you will realize that the benefits of leasing gold are much more valuable than owning it. Today, leasing gold has outshined many investment options and is slowly becoming the top priority of the riches and investors. Join us as we embark on a journey to understanding the benefits of both gold leasing and owning to help you make informed decisions.
Benefits of Gold Leasing
Gold Leasing is an innovative investment strategy in which investors lease or rent their digital gold to the lessee, who can be a jeweler, mining company, or anyone else. The lessee uses gold as their working capital and, in return, provides interest at the rate of 4%- 5% annually to the lessor. Have a look at the benefits of gold leasing and why it is better than other gold funds investments or owning gold at home:
Enhanced Returns
Gold leasing has a high return potential depending on the market condition compared to owning gold at home. While traditional gold investments return 11% and home storage yields no return, gold leasing allows you to earn an extra 4% – 5% over that 11%, making it a total of 16%, which is even more than returns from a mutual fund. High returns boost your overall portfolio performance, reduce risk, and enhance wealth accumulation.
Compounded Interest and Value Appreciation
Owning gold at home does not contribute to compounded interest, whereas leasing gold contributes to both compounded interest and value appreciation. When you lease gold, you gain more gold because of the return and receive compounded returns over time, resulting your gold holdings to expand to a particular level. When gold holdings increase, it automatically results in value appreciation, which enhances overall wealth.
Diversification of Income
Leasing gold adds a new source of income to your portfolio, diversifying your income streams that effectively hedge against inflation and economic uncertainties. You get income from leasing gold in the form of return on investment every month, which adds up to your investment portfolio. This income even grows along with the duration of the lease. Furthermore, when you have several income streams and are less reliant on a single source, your risk exposure decreases.
Flexibility
Leasing gold gives you the flexibility to adjust the size, duration, terms, and conditions of the lease agreement based on your investment goals, market conditions, and liquidity needs. With this flexibility, you can manage your investment portfolio and diversify the investment areas.
Utilization of Idle Assets
Gold is an idle asset until you invest it in gold funds, leasing, or other investments. Therefore, if you are not using it for personal or business use, it’s best to lease it out to make the asset to work and generate extra income and returns for you. The more investments there are, the better the overall efficiency of the portfolio.
Retention of Ownership
If you seek financial aid, you have to sell gold you own at home, which results in transferring ownership. However, with leasing, you retain the ownership of gold and access its value after appreciation in the future or whenever needed. Therefore, when you need cash immediately in future, leasing allows you to monetize gold and sell it instantly.
Security Concerns
The simplest benefit of leasing gold is high security. When you keep gold at home, it is more vulnerable to security risks like theft or loss. However, leasing gold removes the risk associated with physical storage and provides peace of mind.
Cost Efficiency
Leasing gold is a cost-effective alternative to owning gold at home, which includes many expenses. When you store gold at home, you have to bear expenses like security, storage, insurance, maintenance, etc. However, by leasing gold, you earn rental income rather than bearing these additional costs.
Benefits of Gold Owning
Gold owning simply means storing the gold at home in its tangible form and avoiding all benefits related to its investment. However, even owning gold at home offers some advantages, including:
Security and Peace of Mind
When you store gold at home, you have complete control over its security. You can spend as much as you want to install security systems like alarms, cameras, strong safes, etc. to protect your gold. This security can provide peace of mind but remember that even the safest lockers are prone to theft.
Direct Access
By storing gold at home, you can easily access your precious metal. You don’t have to rely on lessee or financial institutions to access your gold. This benefit is valuable in times of emergency, financial instability, or economic uncertainty when you seek immediate access to your gold for selling or renting.
Privacy
Keeping gold at home offers a high level of privacy compared to leasing, in which every activity is recorded digitally. When you store gold at home, you may maintain complete confidentiality about your assets without leaving a single digital footprint.
Hedge against inflation
Tangible gold provides a sense of security and financial stability as it is not subject to risks related to other assets. It works as a hedge against inflation because when the market goes down, the price of gold increases, which protects your purchasing power, which gets reduced due to high prices.
No risk from third-party
Leasing or renting gold involves a certain degree of counterparty risk when the lessor may not be able to return the leased gold or pay the interest amount. However, keeping gold at home helps you avoid such financial losses due to third parties and keeps your assets safe. However, you can completely avoid this risk by choosing a reputable and trusted lessee like Gullak.
Conclusion
We have discussed the benefits of both gold leasing and owning in detail to help you understand which one is better as per your needs and preferences. If you want direct access to gold, storing it in your home is ideal, but leasing is the best option if you want to generate income, enhance revenue, increase gold’s value, and explore the glittering gold market. So, understand your goals and preferences and create an informed strategy for managing the complexity of the current financial scenario
