I used to tell my best friend in high school, regarding dating, not to put all of her eggs in one basket. People lost their life savings because they put all of their eggs in one basket. The company went bankrupt and the stock fell to pennies on the dollar. If there is ever a lesson that states, “Never put all your eggs in one basket” it is this one. Since they were offered stock discounts and received encouraging news from the executives of the company regarding the financial health of the company many of the employees put most of their investments in the company stock. For example, people that invested in Enron were usually the employees who had the majority of their retirement portfolio in the stock. If there is a downturn in that sector then a person’s portfolio could be wiped out.
I wanted to say that when I think about the advice of not putting all my eggs in one basket it tends to remind me of financial investments.Ī really big mistake that a lot of people make with respect to their finances is that they put most of their holdings in one area and do not diversify their portfolio. WaterHopper - That is smart advice for someone in high school, but as you get a little older you really have to settle down and find the right basket.
This caused many banks to close their doors and allowed the larger banks to receive stimulus money in order to stablize the banking sector. The banks also put all of their eggs in the mortgage basket and now they are still dealing with the results of poor business decisions.īoth borrowers and lenders that put all of their eggs in one basket so to speak and lost most of their money in the real estate market. This is how a person with a $40,000 salary was able to qualify for a half a million dollar house. There were many no documentation loans that essentially allowed borrowers to simply state what their income was without having to prove it. What made matters worse is that banks at the time had very loose standards regarding mortgage lending and mortgage fraud ran rampant. Some were able to do that for a while but when the real estate market crashed many of these people found themselves with multiple foreclosures because they could not sell their homes. Most people bought these homes to flip them for a fast profit. I think that the advice of don’t put your eggs in one basket also rings true in the real estate market.ĭuring the peak of the real estate market people were buying multiple homes in order to take advantage of the high short term appreciation levels. Sunshine31 - I felt so bad for those people. You might find that by not putting all your eggs in one basket you might be able to find a better opportunity somewhere else that you have never thought of. It is always a good idea to apply for many jobs and not rely on a single job offer or company until you have had an opportunity to see what is out there. This is also great advice for someone starting a job search. I wanted to add that it is always important to never put all your eggs in one basket because if something happens to your only egg then you will be in trouble. Subway11 - I have to say that the idea that a bank could fail is a little scary. This is another reason why you do not put all your eggs in one basket. There are too many other properties on the market that are excellent values and I don’t have to tie myself up for such a long time waiting. This is why I will never look at a short sale again. If I would not have tied myself to that property for those three months, I could have seen many foreclosures that did not have this problem. However, after putting in an offer the whole process took three months and the bank rejected my offer. I was looking for a beachfront condo and saw a short sale that caught my eye. Sunny27 - You know the same could be said when buying a property.
I always use a different rule: put all your eggs in one basket and watch it really good. So, I think it's better to break other eggs in the basket, leaving safe the only egg that we need. Finally, we land up in something that we never thought to land at. The friends and relatives usually pour out lots of ideas, which usually confuses the one who tries to choose a perfect career. "Putting all your eggs in one basket" would also resemble what we are actually made to do when we are at the eleventh hour of choosing our career.
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