Sustainable finance
Some financial planning strategies could do with a rethink, or even ditching it altogether. Image Credit: Shutterstock

Going through business schools and attending numerous investment seminars - and listening to unqualified professors or speakers polluting our naïve (but thinking) minds - has pushed me to collect all these business jargons and buzz words that are completely wrong or mostly misleading.

Diversification is the way

Diversification is the most wrongfully used buzzword used by fund managers and financial advisers. “This method of investing is for the unprofessional investor…” , this statement is made by none other than Warren Buffet himself. Ever wondered what would have happened if the Musks, the Bezos and the Jobs of this world would have diversified?

None of their gigantic conglomerates would have existed today. Investors took a very concentrated bet on an item they deemed valuable, and stuck through because they believed in it. Charlie Munger himself stated that many times his lifetime, he took 100 per cent of his networth on a single position investment.

Diversification is a hedge for when your money is resting, i.e., waiting for the next valuable item to take a concentrated position.


Debt is bad

We all heard of the horror stories of those who went bankrupt and had all their assets seized and foreclosed by the bank. But we never hear the stories of those who succeeded while carrying lots of debt on their balance-sheets.

With human nature, misery is over amplified and easier to remember, while there Is no glory drama in a dry cleaning business that is managing their debt efficiently. Remember capital or working capital is always needed to scale the business. Managing debt is a unique skill that is rarely discussed and almost not taught in our institutions. Yet, banks are vilified when they foreclose on a family, but never celebrated for all the wheat that was financed to make the bread by the same family.

Ray Dalio emphasizes on how debt is valuable tool of growth for individuals and businesses - but if used wisely.

Get a good paying job

The most common advice for fresh graduates is ‘Get a good paying job’. This is the worst career or financial advice ever given to young professionals. At that phase of life, money earned compared to future earnings is insignificant to be a determining factor for a career.

As opposed to joining an establishment where it believes in mentorship, personal growth and interpersonal development, the focus should be learning a craft, obtaining a unique skillset that renders all the employee’s current and future jobs with tenure status.

The label of ‘job security’ is something that the employee creates, not something that is offered by the employer. This must be highlighted to the young professionals, as we now see a lot of older professionals are miserable in careers and they despise their work lives. Only because they went after money at one point or the other, which they thought was a lot back then, and now stuck in a frame that limits their options to break free.

Saving will make you wealthy

This is another behavior that is glorified. Saving funds is for two reasons only - emergencies and investing. Investing well is what will make you wealthy. If you are not making concentrated bets that will scale and compound yearly, you will never be wealthy.

The average individual earns $68,000 in the US and 30,000 pounds in the UK. If this individual saves all of his/her salary after taxes, he/she will need 29 years of saving to have $1 million. This scenario is only possible if this Individual lives in his parent’s basement and every now and then invades their fridge.

I find financial literacy is an essential skill that all the community must attain, and not only by opting to learn it. I find that it must be an enforced on people in all walks of life.


I find financial literacy is an essential skill that all the community must attain, and not only by opting to learn it. I find that it must be an enforced on people in all walks of life. The collective gain from such skill will have an immense effect on the masses and the entire economy will thrive…