Reading through Warren Buffet’s books, I learned two things: he invests for cash flow and pays very little tax. When I say ‘invests for cash flow,’ read it as if he has a PPF fund that produces around 22% annually, and there is no cap on how much he can invest in that fund every year.
And why did I say PPF and not a mutual fund? PPF, the capital or interest is not taxed. This is another way of saying you should consider PPF. But I wanted to make you understand the importance of yield being tax-free. As his investments generate cash, he can create a new investment. But this post is supposed to be about Growpital. Yes, it is. Growpital is for Indians only, so if you are non – Indian, you can read and find similar opportunities in your geo.
Growpital: the elevator peach
First of all, this is not a paid post. I am sharing my experience and thoughts. I have already made some small investments to test the Gropital platform. Hence I have first-hand experience now. In India, agricultural income is free. And as the farm sector is not formalized yet, and the current generation is not very keen on plowing the field and growing crops, I think there is an opportunity to formalize the sector in bits and pieces.
Growpital is investing in this sector, generating cash and distributing the income. That is why the investor can generate regular tax-free income.
Where Does It Fall Short?
Growpital falls short in the fact that it is almost like an actual farming investment; it is not perpetual; once you harvest, you will have to redeploy the seeds and wait for them to grow so you will be able to harvest again. Think of this as a bond investment that pays the dividend monthly or quarterly, and then the bond matures and stops paying after one year or three years. I hope you get the idea. But again, the point here is that the income is supposed to be agricultural, which will be tax-free in 2023.
Is Growpital Legit?
I am not sure yet. They took my PAN and verified my account, which looked like a legit operation so far. They credited the monthly income, and I could withdraw it to my bank account immediately. But in agriculture, you earn the income only after harvest, so how are they paying monthly? I understand that they may be growing some crops that they can harvest in a quarter. Maybe there are vegetables which can be sold monthly also. Anyway, we need to watch this for years before we can conclude. So I have not taken a big bet, nor do I recommend you.
The good news is there are multiple investment plans, and you can start with as low as five thousand rupees. And there is an option to invest one and a half lacs also. You will have to do KYC, add a nominee, add a bank account, ETC, before you can start. I did transfer funds with UPI; you can too.
Other Platforms to Generate Tax-Free Income
You can check out Sustvest; they have solar projects where you can invest and make tax-free yields. But honestly, I could not support my money in any of their projects yet. And I am aware of another platform called Pyse, which has many investment options.
I started dividend investing because the dividend income used to be tax-free ( and also regular passive income); now that option is gone, so I have been searching for such options. PPF is another good way to invest, but investment is capped, and you do not get to withdraw whenever you want. So if you are looking for regular cash flow and that too tax-free, then check out these platforms.